Q2 2026 Eurocommercial Properties NV Earnings Call

August 28, 2026

Speaker #1: Good morning, everyone, and welcome to the Eurocommercial Properties Althea Results Conference Call. My name is Ilaria Vitaloni, and I am the Investor Relations Officer at Eurocommercial.

Ilaria Vitaloni: Good morning, everyone, and welcome to Eurocommercial Properties' H1 results conference call. My name is Ilaria Vitaloni, and I am Investor Relations Officer at Eurocommercial. I am joined today by our CEO, Evert-Jan van Garderen, and our CFO, Roberto Fraticelli, who will take you through the key highlights of our H1 results and provide an update on the business. With that, I am very pleased to hand over to Evert-Jan to start the presentation. Evert-Jan, over to you.

Speaker #1: I'm joined today by our CEO, Evert Garderen, and our CFO, Roberto Fraticelli, who will take you through the key highlights of our Althea results and provide an update on the business.

Speaker #1: With that, I'm very pleased to hand over to Evert-Jean to start the presentation. Evert-Jean, over to you.

Speaker #2: Thank you, Ilaria. Good morning, everyone, and welcome to Eurocommercial Properties' half-year results for 2026. Thank you for joining us. On the slide, we posted our 35-year anniversary, because we were founded in 1991, and that's a useful moment to reflect on what has been created over time, but also to focus, of course, on what we hope and will create in terms of value.

Evert Jan van Garderen: Thank you, Ilaria. Good morning, everyone, and welcome to Eurocommercial Properties' H1 results for 2026, and thank you for joining us. On the slide, we posted our 35 years anniversary because we were founded in 1991, and that is a useful moment to reflect on what has created over time, but also to focus, of course, on what we hope and will create in terms of value. During the H1 of 2026, our centers continued to attract more visitors, our retailers delivered good sales, and occupancy remained exceptionally high. That was all of course, also a result of our active leasing and asset management initiatives. Today, Roberto and I will explain how these operational and financial developments fit together and why we believe they provide a sound platform for continued growth. I will begin with the operational review, and Roberto will then take you through the financial review.

Speaker #2: During the first half-year of 2026, our centers continued to attract more visitors; our retailers delivered good sales, and occupancy remained exceptionally high. That was all, of course, also a result of our active leasing and asset management initiatives.

Speaker #2: Today, Roberto and I will explain how these operational and financial developments fit together, and why we believe they provide a sound platform for continued growth.

Speaker #2: I will begin with the operational review, and Roberto will then take you through the financial review. Of course, after our presentations, we will open the line for questions.

Evert Jan van Garderen: After our presentations, we will open the line for questions. I will start with a brief reminder of who we are, where we operate, and the long-term consistency of our approach. Eurocommercial was founded and listed in Amsterdam in 1991. Actually we will celebrate that soon with ringing the gong or the bell, as we say in Amsterdam later in end of October, because it was 1 November when we were listed. From the outset, the company has pursued a selective long-term investment approach. With our first shopping center acquisition in France, Les Atlantes, followed by Curno in Italy in 1994, which by the way, we still own, a nice shopping center in Bergamo. We then also entered in Sweden, with Burlöv Center near Malmö, followed by Belgium in 2018 with Woluwe Shopping.

Speaker #2: I'll start with a brief reminder of who we are, why we operate, and the long-term consistency of our approach. Eurocommercial was founded and listed in Amsterdam in 1991.

Speaker #2: And actually, we will celebrate that soon by ringing the gong or the bell, as we say in Amsterdam, later at the end of October, because it was the 1st of November when we were listed.

Speaker #2: And from the outset, the company has pursued a selective long-term investment approach. With our first shopping center acquisition in France, Les Atlantes, followed by Curno in Italy in 1994, which, by the way, we still own—a nice shopping center in Bergamo. We then also entered Sweden with Burlöv Center near Malmö, followed by Belgium in 2018 with Woluwe Shopping.

Speaker #2: And in April this year, Avion Shopping in Umeå became our latest acquisition. Today, the portfolio comprises 25 shopping centers across Belgium, France, Italy, and Sweden, with a value of approximately €4.2 billion.

Evert Jan van Garderen: In April this year, Avion Shopping in Umeå became our latest acquisition. Today, the portfolio comprises 25 shopping centers across Belgium, France, Italy, and Sweden, with a value of approximately EUR 4.2 billion. Although the markets and consumer preferences have changed considerably over 35 years, the core of the model has not. Own high quality retail destinations, stay close to retailers and customers, invest where the return is attractive, and manage the assets actively for income growth. Our portfolio spans two complementary formats. At the one end, we have the convenience-led suburban assets anchored by grocery stores and essential services. These centers obviously benefit from frequent visits and serve the everyday needs of our local communities. On the other hand, we have the destination flagship assets, where fashion, premium, and international brands, leisure, entertainment create a broader day out experience.

Speaker #2: Although the markets and consumer preferences have changed considerably over 35 years, the core of the model has not: own high-quality retail destinations, stay close to retailers and customers, invest where the return is attractive, and manage the assets actively.

Speaker #2: For income growth, our portfolio spans two complementary formats. On the one hand, we have convenience-led suburban assets anchored by grocery stores and essential services. These centers obviously benefit from frequent visits and serve the everyday needs of our local communities.

Speaker #2: But on the other hand, we have the destination flagship assets, where fresh and premium and international brands, leisure, and entertainment create a broader day-out experience.

Speaker #2: And between those two ends of the spectrum, there are the categories you would expect, like health and beauty, personal care, food and beverage, services, and social experiences.

Evert Jan van Garderen: Between those two ends of the spectrum, there are the categories you would expect, like health and beauty, personal care, food and beverage services, and social experiences. These categories are important because they support recurring visits and make the centers relevant for more than a single purchase. Our strategy connects investment selection, operational execution, financial discipline, and value creation. First, the investment strategy. We focus on prime shopping centers in strong European markets with dominant catchments, solid economic fundamentals, and long-term growth potential. Selectivity is essential. We do not seek growth for the sake of growth. We look for assets where the quality is really important and where we can see an opportunity to improve the operations. Secondly, our operational strategy. We actively manage the centers through leasing data-driven insight and targeted asset management.

Speaker #2: These categories are important because they support recurring visits and make the centers relevant for more than a single purchase. Our strategy connects investment selection, operational execution, financial discipline, and value creation.

Speaker #2: First, the investment strategy. We focus on prime shopping centers in strong European markets with dominant catchments, solid economic fundamentals, and long-term growth potential. Selectivity is essential.

Speaker #2: We do not seek growth for the sake of growth. We look for assets where quality is truly important and where we can see an opportunity to improve the operations.

Speaker #2: Secondly, our operational strategy. We actively manage the centers through leasing, data-driven insight, and targeted asset management. This is where our local teams create value: improving the tenant mix, reconfiguring space, introducing new brands, and ensuring that each center remains relevant to its customers.

Evert Jan van Garderen: This is where our local teams create value, improving the tenant mix, reconfiguring space, introducing new brands, and ensuring that each center remains relevant to its customers. Third, our financial strategy, which is a solid and robust strategy, and Roberto Fraticelli will talk about it more in his presentation. Finally, that is probably what it is all about, it is value creation. The first three pillars must translate into outcomes for shareholders. Rental and earnings growth, attractive returns from CapEx, better portfolio quality, and disciplined capital recycling. Italy. We cannot escape from Italy because it is currently our star. Not only because it is a star, it also represents 44% of the portfolio and continues to deliver strong operational performance. Importantly, 75% of the portfolio is rated A by analysts from Green Street, reflecting the quality and competitive position of these assets.

Speaker #2: Third, our financial strategy—which is a solid and robust strategy—and Roberto will talk about it more in his presentation. And then finally, that's probably where it is all about.

Speaker #2: It's value creation. The first three pillars must translate into outcomes for shareholders: rental and earnings growth, attractive returns from capital expenditure, better portfolio quality, and disciplined capital recycling.

Speaker #2: Yeah, Italy. We can't escape from Italy because it's currently our star. And not only because it is a star, it also represents 44% of the portfolio and continues to deliver strong operational performance.

Speaker #2: Importantly, 75% of the portfolio is rated A by analysts from Green Street, reflecting the quality and competitive position of these assets. The figures on this slide show how our immersionizing programs have supported performance at the three Italian flagships: Fiordaliso, Carosello, and Il Giglio.

Evert Jan van Garderen: The figures on this slide show how our remerchandising programs have supported performance at the three Italian flagships, Fiordaliso, Carosello, and I Gigli, evidenced by the important KPIs uplift on renewals and relettings, rental growth above indexation, and retail sales. These results demonstrate that remerchandising is not a cosmetic exercise. It is a disciplined operating tool. By improving the offer, creating the right space, introducing retailers that customers want, we can strengthen trading, improve rental tension, and enhance the long-term quality of the assets. The remerchandising pipeline, which is shown here, is moving from construction and temporary disruption into income generation. We see here the examples. CremonaPo with a new Primark store, but also at Collestrada, a new Primark store. In I Gigli we will have Lefties and Lidl opening in October, bringing the present program in that shopping center also close to completion.

Speaker #2: Evidenced by the important KPI uplift on renewals and relettings, rental growth above indexation, and retail sales, these results demonstrate that the immersionizing is not a cosmetic exercise.

Speaker #2: It is a disciplined operating tool. By improving the offer, creating the right space, and introducing retailers that customers want, we can strengthen trading, improve rental tension, and enhance the long-term quality of the assets.

Speaker #2: The remerchandising pipeline, which is shown here, is moving from construction and temporary disruption into income generation. We see here the examples: Cremona Po, with a new Primark store; but also at Colostrada, a new Primark store; and in I Gigli, we will have Lefties and Lidl opening in October, bringing the present program in that shopping center also close to completion.

Speaker #2: In France, at Voltary, we're also remerchandising, and development will take some more years, but it also includes the opening of a Primark store.

Evert Jan van Garderen: In France at Val Thoiry, we are also remerchandising and development. That will take some more years, but it also includes the opening of a Primark store. During these projects, affected units can be temporarily non-income producing. That has a limitation in terms of rental growth in 2025 and 2026. As these stores open and the areas return to full income operation, we expect the income contribution to become increasingly visible with the full effect of the current major projects expected in 2027. If we look at completed projects like Woluwe Shopping and Carosello, we have put here on this slide some amounts, and they speak for themselves because after completion we can really measure the returns, which are nice double-digit figures. If we look at nearly completed initiatives, which are shown here, they also deliver the projected presented results.

Speaker #2: And during these projects, affected units can be temporarily non-income producing. That has a limitation in terms of rental growth in 2025 and 2026. But as these stores open and the areas return to full income operation, we expect the income contribution to become increasingly visible, with the full effect of the current major project expected in 2027.

Speaker #2: If we look at completed projects, like Relevé Shopping and Carosello, we have put here on this slide some amounts, and they speak for themselves.

Speaker #2: Because after completion, we can really measure the returns, which are nice double-digit figures. If we look at nearly completed initiatives, which are shown here, they also deliver the projected, presented results.

Speaker #2: You can see what we have invested in Igili, Colostrada, and Cremona Po, and what the expected rental uplifts are. Obviously, the amounts and therefore the returns, they vary.

Evert Jan van Garderen: You can see what we have invested in I Gigli, Collestrada, and CremonaPo and what the expected rental uplifts are. Obviously, the amounts and therefore returns, they vary. It is also important to stress that over the next years it will become even more clear what the returns will be. The spinoff of the remerchandising projects will also be noted in the medium and long term. The important point is not simply that each project is attractive in isolation. Together, they demonstrate a repeatable model where identifying opportunity in the merchandising mix, design a practical reconfiguration, secure the right retailers, manage the temporary disruption, and then capture the benefit through higher productivity and rental income. As these projects become fully operational, we expect stronger trading and income contribution during 2027, and we are also assessing further remerchandising opportunities across the portfolio.

Speaker #2: But it's also important to stress that, over the next years, it becomes even more clear what the returns will be. The spin-off of the remerchandising project will also be noted in the medium and long term.

Speaker #2: The important point is not simply that each project is attractive in isolation. Together, they demonstrate a repeatable model: we identify an opportunity in the merchandising mix, design a practical reconfiguration, secure the right retailers, manage the temporary disruption, and then capture the benefit through higher productivity and rental income.

Speaker #2: As these projects become fully operational, we expect stronger trading and income contribution during 2027. We're also assessing further remerchandising opportunities across the portfolio.

Speaker #2: But we will remain selective, and we'll communicate them once the relevant agreements are sufficiently advanced. Avion Shopping in Umeå is our latest acquisition, and a good example of the type of opportunity we seek.

Evert Jan van Garderen: We will remain selective, and we will communicate them once the relevant agreements are sufficiently advanced. Avion Shopping in Umeå is our latest acquisition and a good example of the type of opportunity we seek. We completed the acquisition in April for approximately EUR 111 million, adding a modern, dominant regional shopping center with around 80 shops and restaurants and a strong mix of national and international brands. As you can see, the turnover growth and the footfall growth over the first six months of 2026 are very encouraging, and the property is currently yielding 8%. We have agreed terms to acquire Mood, a leisure destination adjacent to our shopping center, Fiordaliso, for an amount of EUR 7.5 million. The investment offers an attractive yield of approximately 14%, providing immediate income generation. The strategic value goes beyond the initial yield.

Speaker #2: We completed the acquisition in April for approximately €111 million, adding a modern, dominant regional shopping center with around 80 shops and restaurants, and a strong mix of national and international brands.

Speaker #2: As you can see, the turnover growth and the footfall growth for the first six months of 2026 are very encouraging, and the properties are currently yielding 8%.

Speaker #2: We have agreed terms to acquire Mood, a leisure destination adjacent to our shopping center, Fioralisa, for an amount of €7.5 million. The investment offers an attractive yield of approximately 14%, providing immediate income generation.

Speaker #2: But the strategic value goes beyond the initial yield. Fioralisa, the adjacent retail park, and Mood can operate as a more integrated destination. The three components offer complementary reasons to visit.

Evert Jan van Garderen: Fiordaliso, the adjacent retail park, and Mood can operate as a more integrated destination. The three components offer complementary reasons to visit: shopping, services, food, entertainment, and leisure. This is a relatively modest capital commitment with both immediate income and redevelopment potential, but it is also consistent with the direction of customer demand. Leisure and food and beverage offer increases dwell time, support evening activity, and strengthen the relevance of our destination beyond traditional retail hours. We go to the operational results. Here we see the H1 results across the key operating indicators with rental growth, rental uplift 4.7%, retail sales at 4.6%, and still a very low vacancy figure of 1%. A nice OCR, stable at 9.2%. Of course, footfall, quite encouraging over the six months at 3.2%. Without footfall, the rest of the KPIs will never be achieved.

Speaker #2: Shopping, services, food, entertainment, and leisure. This is a relatively modest capital commitment with both immediate income and redevelopment potential, but it is also consistent with the direction of customer demand.

Speaker #2: Leisure and food and beverage offerings increase dwell time, support evening activity, and strengthen the relevance of our destination beyond traditional retail hours. Then, we go to the operational results.

Speaker #2: Here we see the half-year results across the key operating indicators, with rental growth and rental uplift at 4.7%, rent retail sales at 4.6%, and still a very low vacancy figure of 1%.

Speaker #2: A nice OCR, stable at 9.2%. And then, of course, footfall was quite encouraging over the six months at 3.2%. Without footfall, the rest of the KPIs will never be achieved.

Speaker #2: It's very nice to see that. If we actually look at the footfall momentum, it was broad-based across the portfolio, as we have visitor numbers overall increasing by 3.2%.

Evert Jan van Garderen: Very nice to see that. If we actually look at the footfall momentum, it was broad-based across the portfolio because we have visitor numbers overall increasing at 3.2%. We can see that the flagship centers performed particularly well. The rounded average figure of the flagships is approximately 4%. I have to say that I Gigli is excluded from this comparison because of all the works in the shopping center. By country, footfall increased by 3.2%, as I said before, and that is a healthy pattern. It is not dependent on one center or one market, and it is continued despite construction-related disruption in parts of our portfolio. When we look at retail sales growth, the 4.6% I already mentioned, and here you can see the split over the countries.

Speaker #2: But we can see that the flagship centers performed particularly well. The rounded average figure of the flagships is approximately 4%. But I have to say that Igili is excluded from this comparison.

Speaker #2: Because of all the works in the shopping center. By country, footfall increased by 3.2%, as I said before. And that's a healthy pattern. It's not dependent on one center or one market.

Speaker #2: And it has continued despite construction-related disruption in parts of our portfolio. When we look at the retail sales growth—the 4.6% I already mentioned—here you can see the split over the countries.

Speaker #2: Italy, again, very strong with 7.3%, but also Belgium had a nice uplift of 3.8%. And the other countries still also have a plus. In the sector mix, it was also encouraging.

Evert Jan van Garderen: Italy, again, very strong with 7.3%, but also Belgium had a nice uplift of 3.8%, and the other countries still also have a plus. In the sector mix, it was also encouraging. Outstanding performance by services, food and restaurants, and health and beauty. All the other sectors also really a plus. You could say that basically only sports was the only category to decline with -0.9%. The spread of the growth matters. It shows that performance is not being driven by a single category. You need all those categories to have a nice result overall. Again, I cannot, of course, repeat again that Italy's strong performance with 7.3% reflects the strength of the assets and the benefits of the merchandising were already delivered.

Speaker #2: Outstanding performance by services, food and restaurants, and health and beauty. But all the other sectors also really a plus. You could say that basically only sports was the only category to decline, with minus 0.9%.

Speaker #2: The spread of the growth matters. It shows that performance is not being driven by a single category. You need all those categories to have a nice result overall.

Speaker #2: Again, I cannot, of course, report—repeat again—that Italy is a strong performer with 7.3%. This reflects the strength of the assets and the benefits of the merchandising work already delivered.

Speaker #2: If we look at the rental growth—like-for-like rental growth overall over 12 months, that's how we measure it under our models—it was 2.5%. Approximately 190 basis points above indexation, because we all know that 2026 was certainly not the year of indexation.

Evert Jan van Garderen: If we look at the rental growth, like-for-like rental growth overall over 12 months, that is how we measure it under our models, was 2.5%, approximately 190 basis points above indexation, because we all know that 2026 was certainly not the year of indexation. It was very small, in some cases almost zero. Italy was the strongest contributor at 5.4%, supported by active leasing, relettings, and remerchandising. Belgium delivered 3.5%, which we think is reflecting really the good performance at Woluwe Shopping. The overall result demonstrate that even with low indexation in most markets, the portfolio can generate organic growth through leasing and active management. When we look at the EPRA vacancy, again, very stable and low at 1%, really unchanged from the year-end, and actually a bit lower than last year, June. Italy, of course, with an extremely low vacancy of only 0.2%, but also Belgium below 1%.

Speaker #2: It was very small in some cases, almost zero. Italy was the strongest contributor at 5.4%, supported by active leasing, relettings, and remerchandising. And Belgium delivered 3.5%, which we think is really reflecting the good performance at Woluwe Shopping.

Speaker #2: The overall result demonstrates that, even with low indexation in most markets, the portfolio can generate organic growth through leasing and active management. When we look at the EPRA vacancy again, it is very stable and low at 1%.

Speaker #2: Really unchanged from the year-end, and actually a bit lower than last year, June. Italy, of course, with an extremely low vacancy of only 0.2%, but also Belgium below 1%.

Speaker #2: France and Sweden improved. France to 1.4, and Sweden went from 3.4 at the end of the first quarter to 2.6 now, as new lettings were secured.

Evert Jan van Garderen: France and Sweden improved. France to 1.4%, and Sweden went from 3.4% at the end of the Q1 to 2.6% now, as new lettings were secured. The brand names on this slide represent a mix of established international retailers and relevant newer concepts. They include fashion, beauty, sport, jewelry, value-led formats. These are brands consumers want, and we offer them in our centers. The common theme is relevance to the local customer. We use group relationships to engage with leading brands, but the final mix is tailored center by center. The right tenant is the one that strengthens the destination, complements the existing offer, and can trade sustainability in that catchment. Over the 12 months to 30 June, we completed 308 lease transactions compared with 269 in the previous period and a lower figure for 23.

Speaker #2: The brand names on this slide represent a mix of established international retailers and relevant newer concepts. They include fashion, beauty, sport, jewelry, and value-led formats.

Speaker #2: These are brands consumers want, and we offer them in our centers. The common theme is relevance to the local customer. We use group relationships to engage with leading brands, but the final mix is tailored center by center.

Speaker #2: The right tenant is the

Speaker #1: The one that strengthens the destination , complements the existing offer and can trade sustainability in that catchment over the 12 months to 30th June , we completed 308 lease transactions , compared with 269 in the previous period , and a lower figure for 23 .

Speaker #1: And out of these 308 transactions, 207 were renewals with existing tenants, whereas 101 were lettings with retailers taking new units across all those renewals.

Evert Jan van Garderen: Out of these 308 transactions, 207 were renewals with existing tenants, whereas 101 were relettings with retailers taking new units. Across all those renewals, relettings, we see our average rental uplift of 4.7%. The additional detail you can also find in the press release. Particularly, of course, it is interesting that new lettings achieved 7.9% overall in our centers. To tell you a little bit more about the last 6 months, we completed 160 transactions at an average uplift of 3.5%, and most of that was actually concentrated in food and restaurants, health and beauty, and gifts and jewelry. There were strong country-level performance as well, as you can see on this slide with, in Italy, renewals producing 5.2%, so that was a strong figure for renewals. Of course, relettings with Swedish, which was in Sweden achieved double digit is again, a nice figure to look at.

Speaker #1: Three lettings . We see an average rental uplift of 4.7% and the additional detail you can also find in the press release particularly , of course , it's interesting that new lettings achieved 7.9% overall in in our centres .

Speaker #1: And to tell you a little bit more about the last six months, we completed 160 transactions at an average uplift of 3.5%, and most of that was actually concentrated in food and restaurants, health and beauty, and gifts and jewellery.

Speaker #1: They there were strong country level performance as well , as you can see on this slide with in Italy , renewals producing 5.2% .

Speaker #1: So that was a strong figure for renewals . And of course lettings with Swedish , which was in Sweden , achieved a double digit is again a nice figure to look at .

Speaker #1: If we then look at the lease expiry profile, it's, we think, well spread. A large share of rental income is secured beyond six years.

Evert Jan van Garderen: If we then look at the lease expiry profile, it is, we think, well spread. A large share of rental income is secured beyond 6 years, and as this chart shows, the expiries in each of the first 6 annual bands are manageable. Approximately 35% of rental income or more than EUR 81 million has a lease end date beyond 6 years. This profile provides useful income visibility and reduces concentration risk. It means we are not dependent on renegotiating an unusually large portion of the portfolio in a single year. We cannot escape from saying something about artificial intelligence, AI, and where does it create value for Eurocommercial? We have identified four practical areas where AI can create value for us. The first is tenant and visitor engagement. We are using AI to improve marketing, events, and leasing effectiveness, and to understand the drivers of footfall and sales more clearly.

Speaker #1: And as the chart shows, the expiries in each of the first six annual bands are manageable. Approximately 35% of rental income, or more than €81 million, has a lease end date.

Speaker #1: Beyond six years. And this profile provides useful income, visibility, and reduces concentration risk. It means we're not dependent on renegotiation or an unusually large portion of the portfolio in a single year.

Speaker #1: We cannot escape from saying something about artificial intelligence . AI and where does it create value for Eurocommercial ? We have identified four practical areas where AI can create value for us .

Speaker #1: The first is tenant and visitor engagement. We're using AI to improve marketing, events, and leasing effectiveness, and to understand the drivers of footfall and sales.

Speaker #1: More clearly, the second is intelligent data and reporting. We're building data platforms to automate reporting and enable conversational analytics. The aim is to give our teams faster access to consistent information and allow them to spend more time interpreting and acting on it.

Evert Jan van Garderen: The second is intelligent data and reporting. We are building data platforms to automate reporting and enable conversational analytics. The aim is to give our teams faster access to consistent information and allow them to spend more time interpreting and acting on it. The third is process automation. We are targeting repetitive internal workflows such as turnover reporting, invoice processing, and contract-related tasks. The fourth is workplace intelligence. Enterprise large language models and licenses are available across the organization, and we have today 96% of our total staff using it every day. That is, of course, nice to see. We are approaching AI pragmatically. The objective is not technology for its own sake. It is better decisions, more efficient processes, stronger engagement supported by appropriate governance and human oversight. During the H1, we completed our advanced several major decarbonization and resilience projects.

Speaker #1: The third is process automation , we're targeting repetitive internal workflows such as turnover reporting , invoice processing , and contract related tasks . And the fourth is workplace intelligence enterprise large language models and licenses are available across the organisation .

Speaker #1: And we have today 96% of our total staff using it every day . And that's of course , nice to see . We're we're approaching AI pragmatically , the objective is not technology for its own sake , its better decisions , more efficient processes , stronger engagement , supported by appropriate governance and human oversight .

Speaker #1: During the first half, we completed or advanced several major decarbonisation and resilience projects across the group. Eighty-five percent of our shopping centres now carry the EPC rating.

Evert Jan van Garderen: Across the group, 85% of our shopping centers now carry the EPC rating A, B, or C. The renewable electricity represents 97% of landlord controlled consumption and 64% of tenant controlled consumption. We have also integrated asset level climate risk assessment into our business plans. These measures reduce carbon intensity, improve the energy performance, and strengthen long-term resilience. They also protect the competitiveness volume of the assets as regulation, energy markets, and customer expectations evolve. Our priorities fall into four connected areas. First, value creation. We will drive rental growth through active leasing and positive rental reversion, completing the current merchandising projects, and do all the other things I talked about, strengthening tenant mixes, remain alert to accretive acquisitions, of course, because that could be an external growth opportunity. Second important, cost control.

Speaker #1: A , B or C , a renewable electricity represents 97% of landlord controlled consumption and 64% of tenant control consumption . And we have also integrated asset level climate risk assessment into our business plans .

Speaker #1: These measures reduce carbon intensity , improve the energy performance and strengthen long term resilience . They also protect the competitiveness of the assets as regulation , energy markets and customer expectations evolve .

Speaker #1: Our priorities fall into four connected areas. First, value creation. We will drive rental growth through active leasing and positive rental reversion.

Speaker #1: Completing the current remerchandising projects and doing all the other things I talked about, strengthening tenant mixes. Remain alert to accretive acquisitions, of course, because that could be an external growth opportunity.

Speaker #1: Second, important cost control. We actively manage our interest rate hedging, optimise property operation costs while maintaining asset quality, and preserve a lean and disciplined overhead.

Evert Jan van Garderen: We actively manage our interest rate hedging, optimize property operation costs while maintaining asset quality, and preserve a lean and disciplined overhead. Third is digitalization. I talked about AI and all the other tools we are using, and therefore, it can improve our overall digital engagement with tenants and customers. Last but not least, ESG. We will continue with the decarbonization roadmap and do all the other steps as we have discussed and presented in our detailed H1 report. The common thread of all of this is, of course, disciplined execution. With this, I would like to hand over to Roberto to take us through the financial performance and capital positions in detail.

Speaker #1: Third is digitalisation. I talked about AI and all the other tools we're using, and therefore it can improve our overall digital engagement with tenants and customers.

Speaker #1: And last but not least, ESG. We will continue with the decarbonisation roadmap and take all the other steps as we have discussed and presented in our detailed half-year report.

Speaker #1: The common thread of all of this is , of course , disciplined execution . And with this , I would like to hand over to Roberto to take us through the financial performance and capital position in detail .

Speaker #2: Wow . Thank you Everton . Welcome , everybody . I mean , you know , this is a fantastic opportunity to go through the financials .

Roberto Fraticelli: Wow. Thank you, Evert-Jan. Welcome, everybody. This is a fantastic opportunity to go through the financials. We first focus on what we do. Our focuses are on the strategic capital allocation, so the merchandising projects. There you have heard Evert-Jan saying all about the work that has been done, and that is also thanks to our fantastic leasing teams, the technical teams. There is plenty of work, which is being done. We look also accretive acquisitions. We have done Woluwe, SR, we have done Avion, we have done Mood. That is great. Second focus is earning growth. What we do is increase, of course, the income, but also focus on the cost discipline. One of the highest costs that we all have is, of course, the interest expenses. So our 3.2% average cost of debt, the 80% hedging, and the refinancing being done as much as possible.

Speaker #2: We first focus on what we do . So our focus is are on the strategic capital allocation . So the merchandising project . And that you heard everything saying all about the work that has been done .

Speaker #2: And that's also thanks to our fantastic leasing teams , the technical teams . There's plenty of of work which , which , which has been done .

Speaker #2: And we look also at credit position . So we've done we've done Avion , we've done mood . That's that's great Second focus is earnings growth .

Speaker #2: So what we do is increase . Of course the income . But also focus on the cost discipline . One of the highest costs that we all have is of interest expenses .

Speaker #2: So, our 3.2% average cost of debt, the 80% hedging, and the refinancing being done as much as possible. We then go to the resilient balance sheet.

Roberto Fraticelli: We then go to the resilient balance sheet. LTV at around 40%, net debt at around 8. Those are targets that we have. We like to be around those numbers. Then increasing returns that you see in the strategic CapEx, what they do, what kind of returns they can deliver. So we are very happy with that. If you look at the financial results, just to give you the usual highlights, you see that the direct investment result is +2.6% to EUR 68.7 million. The NPV, the net loan to value, went up a little bit. That was, of course, due to the acquisition of Avion. The portfolio valuation went up a bit to EUR 4.2 billion. As you see, the average cost of debt is stable, and we reiterated the guidance at 245 to 250. Let us have a look quickly at the direct investment results.

Speaker #2: So LTV at around 40% net debt at around eight . And those are targets that we have . We like to be around those numbers and then increasing returns that you see in the strategic CapEx , what they do , what kind of returns they can deliver .

Speaker #2: So we're very happy with that . If you look at the financial results , just to give you the usual highlights , you see that the direct investment result is plus 2.6% to 66 , €8.7 million .

Speaker #2: The MTV , the net loan to value went up a little bit . That was , of course , due to the acquisition of value of Avion .

Speaker #2: The portfolio valuation has gone up a bit to €4.2 billion. And as you see, the average cost of debt is stable.

Speaker #2: And we reiterated the guidance at €245 to €250. Let's have a look quickly at the direct investment results. What are the main components?

Roberto Fraticelli: What are the main components? As you see, there is a nice increase in rental income. There is an increase in property expenses that may be related to Avion. There is also an increase in bad debt. There is some more provision that we do for France. Then there is a positive 1.2 in the net service charges. That is also related to a one-off that we had in Belgium. The company expenses also improved. Then you see the 1.8 higher net interest expenses, and that is partly, of course, due to Avion. We acquired the company, we are financing it with loans, but also partly due to the increase in the EURIBOR and the STIBOR. You might remember that we aim at having an 80% hedge, so 20% of our loans is unhedged. Then you get a little bit of positive news on corporate income tax and others.

Speaker #2: As you see, there is a nice increase in rental income. There's an increase in property expenses that are mainly related to Avion.

Speaker #2: There's also an increase in bad debts. There are some more provisions that we took from France. Then, there is a positive €1.2 million in the net service charges.

Speaker #2: That's also one off that we had in Belgium . The company expense is also improved , and then you see the 1.8 . Higher net interest expenses .

Speaker #2: And that's partly, of course, due to Avion. We acquired the company, we're financing it with loans, but also partly due to the increase in the Euribor and the Stibor.

Speaker #2: You might remember we aim at having 80% hedge, so 20% of our loans are unhedged. And then you get a little bit of positive news on corporate income tax and others.

Speaker #2: If we look at the valuations, valuations increased a little bit, and that's nice because this is good growth. It depends on the NOI and on the increase in earnings per share.

Roberto Fraticelli: If you look at the valuations increased a little bit, and that is nice because this is a good growth because it depends on the NOI and on the increase in earning per share and in the estimated rental values of the assets. The net initial yield are stable. This is a good growth because it is a growth which is based on the increase on net operating income and ERVs. If you go to the EPRA NTA, we are trying to show you just the main impacts on the changes of the EPRA NTA for this year. EPRA NTA, we add the direct investment results, then, of course, we do the adjustments which are needed for the EPRA.

Speaker #2: And in the estimated rental values of the of the assets and and the net initial yield are stable . So this is a good growth because it's a growth which is the increase on net operating income and erb's .

Speaker #2: If you go to the end to we are show you just the main impacts on the on the changes of the NPA for , for this year .

Speaker #2: So I , we add the direct and indirect investment results . Then of course , we do the adjustments which are needed for the for the .

Speaker #2: And then you see that the biggest impact is the dividend distribution . And the . 183 , which we distributed . There is a bit a little bit of stock dividend up because of course , we issue that the premium compared to the share price .

Roberto Fraticelli: You see that the biggest impact is the dividend distribution and the 183 which we distributed. There is a little bit of stock dividend up because, of course, we issued at a premium compared to the share price. You see the other main impact is the -20, which is related to the fact that the exchange rate with the SEK, with the krona, and krona was lower compared to the EUR. If we then go and look at the source and use of funds, you see we acquired Avion Shopping Center for EUR 111 million. Then, of course, there is a part which is your dividend, which has been paid. There is a little bit which is dedicated to the CapEx, the accretive CapEx that we have mentioned. There is a bit of increase in cash. Where does that came from?

Speaker #2: And then you see the other main impact is that 20 negative, which is related to the fact that the exchange rate with the SEK, with the krona, was lower compared to the Euribor.

Speaker #2: If we then go and look at the source and use of funds, you see we acquired Avion Shopping Center for €111 million.

Speaker #2: Then , of course , there is a part which is your dividend , which has been paid , and there is a little bit which is dedicated to the CapEx .

Speaker #2: And the CapEx that we've mentioned – that is a bit of an increase in cash. Where does that come from? €40 million came from the operating cash flow, and the other €22 million came from an increase in borrowings.

Roberto Fraticelli: EUR 40 million came from the operating cash flow, and the other EUR 22 million came from increase in borrowing. You can see the parallel between the increase in borrowings and the acquisition of Avion Shopping Center. Now let us look at our priorities as well. What do we want to do? We still look at prudent leverage. The target of net loan to value is around 40%. Net debt to EBITDA at 8. Diversified funding, we are still very happy with our banks, and they provide us with fantastic funding and are very easy to contact and very reasonable when negotiating. We are very happy with that. We still keep an aim of 80% of hedging. That gives also a little bit of flexibility of acting into the interest rate market the moment that we see that the curve can be more favorable to us than in other times.

Speaker #2: So you can see the parallel between the increase in borrowings and the acquisition of Avion Shopping Center. Now, let's look at our priorities as well.

Speaker #2: What do you want to do? We still look at prudent leverage, so the target of net loan to value is around 40%, and net debt to EBITDA at 8, with diversified funding.

Speaker #2: We're still very happy with our banks and our providers, with fantastic funding and very easy to contact, and very reasonable when negotiating.

Speaker #2: So we're very happy with that . We still keep an aim of 80% of hedging . So that gives us a little bit of flexibility of acting into the interest rate market at the moment that we see that the curve can be more favorable up to us than , than in other times .

Speaker #2: And we also want to keep the long-term visibility. So the debt maturity profile, which you will see in another slide, is really kept more in the long term.

Roberto Fraticelli: We also want to keep the long-term visibility. The debt maturity profile, you will see in another slide, is really kept at more in the long term. If we go to a snapshot of what we have done in H1 2026, the main thing is that, of course, the cost of debt remained unchanged at 3.2%. We increased the leverage modestly thanks to the fact that we acquired Avion, and we give you, of course, the overview of the key financial metrics, which more or less in line with some improvements here and there compared to December 2025. Now, this slide, we show you what we have done in 2026. We concluded the financing that we had signed in 2025, and that is for around EUR 588.5 million. There you also see the new loan on Avion Shopping Center, which was done with SEB.

Speaker #2: If we go to a snapshot of what we've done in H1 2026, the main thing is that, of course, the cost of debt remained unchanged at 3.2%.

Speaker #2: We increased the leverage modestly , thanks to the fact that we acquired Avion , and we give you , of course , the overview of the key financial metrics , which more or less in line with some improvements here and there , compared to December 2025 .

Speaker #2: Now, on this slide, we show you what we've done in 2026. So we concluded, and the financing that we had signed in 2025.

Speaker #2: And that's for around €500.9 million and €88.5 million. There. You also see the new loan on Avion Shopping Centre, which was done with SEP.

Speaker #2: We're very thankful to our banks. And we're also a bit showing off with this slide because there is not a lot to do.

Roberto Fraticelli: We are very thankful to our banks. We are also a bit showing off with this slide because there is not a lot to do than in 2027 and 2028, which we will see in the other slide. If you look at the maturity profile of our loans, you see that 2027 and 2028, basically a little bit of amortization on the existing loans. The refinancing will come in 2029, 2030, and 2031. So we still have a lot of time in front of us to look at the renegotiations and the refinancing of our assets. A little note also from an accounting perspective to our 35 years. You see in 1991, we began with a portfolio of, let's call it 330 million Dutch guilders, which we translated roughly into the EUR 150 million. So we went from there into the actual portfolio size, which is EUR 4.2 billion.

Speaker #2: Then in 27 and 28 , which we will see in the other slide , if you look at the maturity profile of our loans , you see that 2027 and 2028 , basically a little bit of a more on the existing loans .

Speaker #2: The real refinancing will come in 20 29 , 30 and 31 . So we still have a lot of time in front of us to look at the renegotiations and the refinancing of , of our assets .

Speaker #2: Now , a little note also from an accounting perspective . So at 35 years You see , in 1991 , we began with a portfolio of , let's call it 330 million Dutch guilders , which we translated roughly into the €150 million .

Speaker #2: So we went from there into to the actual portfolio size , which is 4.2 billion . The portfolio there was diversified . We had some residentials , we had some offices , and now we clearly show our focus on the shopping center .

Roberto Fraticelli: The portfolio there was diversified. We had some residentials, we had some offices, and now we clearly show our focus on the shopping center. We had no leverage at that time, and now we have a leverage of, let's say, 40.9%, which is also helping in increasing the results that we then provide to you. What is really interesting is, of course, since inception, since the beginning of this EUR 150 million, we actually gave a total return of 6.42 per annum, which we hope you are satisfied with. That is really thanks to all the employees that we have, past, present, all the hard work that they did. So thank you to all of them for all of this. Let's look at try and finish.

Speaker #2: We had no leverage at that time , and now we have a leverage of , let's say , 40.9% , which is also helping in increasing the results that we then provide to you .

Speaker #2: What's really interesting is , of course , since inception , since the the beginning of this €150 million , we actually gave a total return of 6.42 per annum , which we hope you are satisfied with .

Speaker #2: And that's really thanks to all the employees that we have, past and present. You know, all the hard work that they did.

Speaker #2: So, thank you to all of them for all of this. Let's look at, try and finish Eurocommercial. If we look at this year...

Roberto Fraticelli: Eurocommercial, if we look at this year, so the first seven months of 2026, we actually also have delivered around 15.1% of total return, which is also nice. Here in the table, you can see the increase in the direct investment result up to 2.44, and the increase in the dividend up to 1.83. If you do as you could, the direct investment result that we produced in 2025, which is 2.44, and divide it by the share price that was there at the end of December, which was 26.05, then you get a nice investment of around 9.4%, which is not bad. We are too cheap. Then we go to the guidance. Direct investment result, we affirm 2.45 to 2.50 per share, with further growth expected in 2027.

Speaker #2: So the first seven months of 2026 , we actually also have a delivered around 15.1 . Of percent of total return which which is also nice here in the table you can see the increase in the direct investment result up to 244 .

Speaker #2: An increase in the dividend up to 1.83. And if you do as you could, the direct investment result that we produce in 2025, which is 2.44, and divide that by the share price that was there at the end of December, which was 26.05.

Speaker #2: Then you get a nice investment of around 9.4% , which is not bad . We are too cheap . Then we go to the guidance direct investment result reaffirmed to 45 to 50 per share , with further growth expected in 2027 .

Speaker #2: What we want to stress is that, of course, you've seen all these remerchandising programs that we have on these projects.

Roberto Fraticelli: What we want to stress out is that, of course, you have seen all these merchandizing programs that we have or these merchandizing projects. They are fantastic, but of course, they take a toll on 2026, and they will fully contribute in 2027 because all the merchandizing that we are doing, they are still running for part of them in H2 2026. Some of them will open for Christmas 2026, which is also the aim that we and the retailers have. We want to be there for Christmas, do the entire season, and all be happy and merry with that result. 2027 is the year where you actually see the full contribution of Avion, you see the full contribution of all these remerchandising projects. With that, we go back to the operators. We thank you very much, and we are ready for your Q&A.

Speaker #2: They are fantastic. But of course, they take a toll on 2026, and they will fully contribute in 2027 because all the remerchandising that was done and we're doing, they are still running.

Speaker #2: For part of them, in H2 2026. Some of them will open for Christmas 2026, which is also the aim that we and the retailers have.

Speaker #2: We want to be there for Christmas—to do the entire season and all be happy and merry with. With that result, 2027 is the year where you actually see the full contribution of Avian.

Speaker #2: You see the full contribution of all these remerchandising projects. And with that, we go back to the operators. We thank you very much, and we are ready for your Q&A.

Speaker #3: Ladies and gentlemen, we're now ready to take your questions. If you wish to ask a question, please press the pound key followed by five on your telephone keypad to register your question.

Operator: Ladies and gentlemen, we are now ready to take your questions. If you wish to ask a question, please press pound key 5 on your telephone keypad to register your question. If you wish to withdraw your question, please press pound key 6. The first question comes from Lynn Hautekeete from KBC. Please go ahead.

Speaker #3: If you wish to withdraw your question, please press the pound key. Six. The first question comes from Lyn. Over to Peter from KBC.

Speaker #3: Please go ahead

Speaker #4: Hi . Good morning everyone . And thank you for the presentation . I have some questions on your development pipeline . So in your report , you mentioned that you are in the planning phase of an extension project in in both Carosello and Gigli .

Lynn Hautekeete: Hi.

Roberto Fraticelli: Hi.

Lynn Hautekeete: Good morning, everyone, and thank you for the presentation. I have some questions on your development pipeline. In your report, you mentioned that you are in the planning phase of an extension project in both Carosello and E.Leclerc. Do you have any further details, maybe the investment size or the return metrics and the timeline of those extensions?

Speaker #4: Do you have any further details? Maybe the investment size or return metrics, and the timeline of those extensions?

Speaker #2: If we we are very hopeful and lean . As you know , in Italy , it's they're very quick with permit permit permits providing them and everything .

Roberto Fraticelli: We are very hopeful, Lynn, as you know. In Italy, they are very quick with permits, providing them and everything. So we have been doing this for some years. I would say the hope is that we get a proper approval for these plannings in the coming 2 years, maybe. What we would like to do is, of course, come up with the final project once we are sure of what kind of permits we get. So how many square meters, how many licenses, where about, so that we can actually then finalize all the needs. But for now, let us say we are asking, we have been asking, we continue asking. We have positive vibes, but with politics, you never know. So that is why we are going to be careful on that.

Speaker #2: So we've been doing this for some years . I'd say the hope is that we get a proper approval from this for this plannings in the coming two years , maybe what we would like to do is , of course , come up with the final project .

Speaker #2: Once we are sure of what kind of permits we get . So how many square meters , how many licenses , where about , so can actually then finalize all the all the mix .

Speaker #2: But for now , let's say we are asking . We've been asking , we continue asking . We have positive vibes , but with politics , you never know .

Speaker #2: So that's why we are a bit careful on that.

Speaker #4: Okay , but the two years noted and then secondly , on the the redevelopment you're doing on the Lawrence Merlin sites just there , I think you mentioned that it will take a bit longer than initially expected .

Lynn Hautekeete: Okay. But 2 years notice. Secondly, on the Val Thoiry, the redevelopment you are doing on the Leroy Merlin sites. Just there, I think you mentioned that it will take a bit longer than initially expected, and I was wondering if you could give some timeline there and maybe some color on the redevelopments.

Speaker #4: And I was wondering if you could give some timeline there and maybe some color on the redevelopments.

Speaker #1: Yeah. Let's say, it's not so much that it is taking longer than expected. It's just a very long remerchandising project, and it does indeed also involve 27 and 28.

Evert Jan van Garderen: Lynn, Val Thoiry, it is not so much that it is taking longer than expected. It is just a very long remerchandising project. It involves indeed also 2027 and 2028, as I said. That has all to do with, indeed, Leroy Merlin. Currently, outside the gallery, they have a standalone, let's say, unit box, which they rent. They are now building their own unit, their own store, on the other side of the road, where they bought the land. Those building works are currently happening. It is still on schedule, but it takes quite some time to really build it. Then they have to move out. Then we need to refurbish that entire unit to make it ready for the retailers we have signed up, including Primark.

Speaker #1: As I said , and that has all to do with . Indeed , Merlin . Currently they have outside the gallery they have a standalone , let's say , unit box , which they they rent , but they're now building own unit , their own store on the other side of the road where they where they bought the land and those building works are currently happening .

Speaker #1: It's , it's still on , on schedule , but you know , it takes quite some time to , to really build it .

Speaker #1: And then they have to move out. Then we need to refurbish that entire unit to make it ready for the retailers we have signed up, including Primark.

Speaker #1: So by the time you finish , it will be end of 28 , maybe early 29 , even when when these events are opening .

Evert Jan van Garderen: By the time you finish, it will be end of 2028, maybe early 2029 even, when the tenants are opening. Particularly one of them is important as well to move there is Decathlon. Then they will leave the gallery, giving us nice space back, which is good space in the middle of the center to lease to attractive tenants within Val Thoiry. Val Thoiry is a little bit slower. I would not say it is an escargot, but we will get there. This is a nice project, because Val Thoiry is, of course, one of our centers in France, which still perform very well, so close to the border with the location near Geneva. That is the plan over there.

Speaker #1: And particularly, one of them is important as well to move. There is Decathlon, and then they will leave the gallery.

Speaker #1: So giving us nice space back, which is good space in the middle of the center to lease to attractive tenants within Valteri.

Speaker #1: So Valtari is a is a little bit slower . I would not say it's an escargot , but you know , the we will get there and , and this is a nice project because Valtari is of course , one of our centers in France , which still do perform very well .

Speaker #1: So close to the border with the location in near Geneva . So that's , that's the plan over there .

Speaker #4: Okay . That makes perfect sense . And maybe a last one , if I may . It's on a . So indeed , your top line has an impact on the strategic vacancy coming from .

Lynn Hautekeete: Okay. That makes perfect sense. Then maybe a last one, if I may. It is on remerchandising. Indeed, your top line has an impact on the strategic vacancy coming from the remerchandising projects. I think the impact will be slowly phased out in H2. Could you maybe quantify how much you would expect to gain in total as of H2 when the remerchandising are ending in terms of top line?

Speaker #4: The merchandising projects . And I think the impact will be slowly phased out in the second half . But could you maybe quantify how much you would expect to to gain in total , as of the second half , when the merchandising is are are ending in terms of top line ?

Speaker #1: Yeah . Well , I think the second half is , is not yet in the period where we see the full return kicking in as , as we said , there are a few important openings scheduled for Q4 .

Evert Jan van Garderen: Well, I think H2 is not yet the period where we see the full return kicking in. As we said, there are a few important openings scheduled for Q4. Typically also Primark, but some others as well, ready for Christmas, as Roberto Fraticelli said. We are always on the same page with our retailers that these openings must happen before the really most important season of the year starts. I am afraid that we really see those benefits appearing in 2027, Lynn. That is why we also reaffirmed our guidance. No problem with that. The real benefits will follow in 2027. Roberto Fraticelli, further comments?

Speaker #1: The typically also Primark , but some some others as well . Ready for Christmas as Roberto said , we we are always on the same page with our retailers that these openings must happen before the .

Speaker #1: The . The real . The most important season of the year starts . So I'm afraid that , you know , we really see those benefits appearing in 27 .

Speaker #1: So that's why we also , you know , we we reaffirmed our guidance . No problem with that . But , you know , the , the , the real benefits will follow in .

Speaker #1: 27. Roberto: Yeah, a comment.

Speaker #2: Because some of them are opening at the end of October, some of them are opening in November. And that's really focused on Christmas.

Roberto Fraticelli: Yeah, sure. Because some of them are opening end of October, some of them are opening in November. That's really focused on the Christmas. So, we asked them to put their brand new store, something very nice and flashy. So we're giving them also the time to build it. But, yeah, the impact will not be a lot, Eileen.

Speaker #2: So, and we're giving them the—we asked them to put their brand new store, so something very nice and flashy. So we're giving them also the time to build it.

Speaker #2: But yeah , the , the impact will be , will not be a lot . Yeah .

Speaker #4: Okay . Thank you .

Lynn Hautekeete: Okay. Thank you.

Speaker #2: Yeah .

Roberto Fraticelli: Yeah.

Speaker #3: The following question comes from Steven Baumann from ABN Amro, Adobe. Please go ahead.

Operator: The following question comes from Steven Boumans from ABN AMRO Oddo BHF. Please go ahead.

Speaker #5: Hi . Good morning . Thank you for taking my questions . I have a couple . Let's put it first . So for the new merchandising projects that you see , your portfolio that you haven't started , what kind of size are we talking about ?

Steven Boumans: Hi. Good morning. Thank you for taking my questions. I have a couple. Let's start with the first. For the new remerchandising projects that you see in your portfolio ahead that you haven't started, what kind of size are we talking about? Is it EUR 10 million or EUR 50 million or even more in the next three years? Do you also expect solid double-digit returns similar to what you disclosed today for that?

Steven Boumans (ABN AMRO: Hi. Good morning. Thank you for taking my questions. I have a couple. Let's start with the first. For the new remerchandising projects that you see in your portfolio ahead that you haven't started, what kind of size are we talking about? Is it EUR 10 million or EUR 50 million or even more in the next three years? Do you also expect solid double-digit returns similar to what you disclosed today for that?

Speaker #5: It's like €10 million or €50 million, or even more, in the next three years. And do you also expect solid double-digit returns, similar to what you disclosed today, for that?

Speaker #1: Yeah . Thank you . Steven , for , for your questions . Let's say I have a message we wanted to give very clear is , listen , the merchandising projects , which we have started and are , are now in , in nearly completion or have been completed .

Evert Jan van Garderen: Yeah. Thank you, Steven, for your questions. I have a message we wanted to give very clear is, listen, the remerchandising projects, which we have started and are now in nearly completion or have been completed, that doesn't mean that we will stop or have no further possibilities. As a matter of fact, you will not be surprised to hear that we see more and further potential in Italy. I think I Gigli, Roberto, and you can maybe give some more detail, but also Carosello. These are really big shopping centers where we can do more. Of course, that's the potential we will certainly try to unlock. Maybe some-

Speaker #1: But that doesn't mean that that we will stop or have no further possibilities . As a matter of fact , you will not be surprised to hear that , you know , we see more and further potential in Italy .

Speaker #1: I think Roberto , and you can maybe give some more detail , but also Carosello these are really big shopping centers where we can do more .

Speaker #1: And and of course , that's the potential . We will certainly try to unlock maybe some some . .

Roberto Fraticelli: Steven, you're absolutely right. You've seen the amount of CapEx that we've foreseen for the current one, so I Gigli, Collestrada, CremonaPo. There are many more that we are, of course, planning. What we try and do is to select the moment that you might remember the trigger moment. So when we finally achieve an agreement with one of the major retailers to start the remerchandising program. What we do is, of course, we are in negotiations, so there's also confidentiality. But once we have agreed the terms, then we can come up also with the project that we would like to do, how much we think we're going to invest. But we do not want to do that in advance because, of course, we have nothing agreed yet, if that makes sense, Steve.

Speaker #2: You're absolutely right . I mean , you've seen the amount of CapEx that we've seen for the for the current one . So There are many more that we are , of course , planning what we try and do is to select the moment that you might remember the trigger moment .

Speaker #2: So, when we finally achieve an agreement with one of the major retailers to start the merchandising program, what we do is, of course, we are in negotiations.

Speaker #2: So there's also confidentiality . But once we have agreed the terms , then we can come up . Also with the project that we would like to do , how much we think we're going to invest and but we do not want to do that in advance because of course , we have nothing agreed yet , if that that makes sense .

Speaker #2: Steve .

Speaker #5: Okay. That makes sense. Thanks. And we'll wait for more numbers—hopefully on one of the next important days.

Steven Boumans: Okay. Does make sense. Thanks. Then we wait for more numbers, hopefully, one of the next reporting days.

Steven Boumans (ABN AMRO: Okay. Does make sense. Thanks. Then we wait for more numbers, hopefully, one of the next reporting days.

Speaker #2: Compared to the past

Evert Jan van Garderen: Compared to the past.

Speaker #5: Maybe a different question then, on M&A opportunities in the broader sense. You talked about a joint venture of value. Is that something to expect in the next 12 months?

Steven Boumans: Maybe a different question then. On M&A opportunities in the broader sense. You talked about joint venture of Woluwe. Is that something to expect in the next 12 months? Maybe also the other way around. Are you currently in acquisition processes? Maybe is it more like the Swedish acquisition or maybe more like Mood acquisition? Can we expect something from that, let's say, in the next 12 months? Any color is welcome there.

Steven Boumans (ABN AMRO: Maybe a different question then. On M&A opportunities in the broader sense. You talked about joint venture of Woluwe. Is that something to expect in the next 12 months? Maybe also the other way around. Are you currently in acquisition processes? Maybe is it more like the Swedish acquisition or maybe more like Mood acquisition? Can we expect something from that, let's say, in the next 12 months? Any color is welcome there.

Speaker #5: And maybe also the other way around? Do you see? Are you currently in acquisition processes, and maybe is it more like the Swedish acquisition, or maybe more like a different acquisition?

Speaker #5: Can we, can we expect something from that, let's say, in the next 12 months? Any color is welcome there.

Speaker #1: Thank you . Steven , and always a good questions to ask . Of course , let's say to start with your first one on joint ventures , we have always said we're open to to look into joint ventures .

Evert Jan van Garderen: Thank you, Steven. Always good questions to ask, of course. Let's say, to start with your first one on joint ventures. We have always said we are open to look into joint ventures. We could do more, particularly, probably on our flagships. So that is always on the table. But currently, I do not expect that we will see there immediately changes. The problem is always, you have seen it with these remerchandising projects, that it is nice that we can put so much effort in it, but it is also nice to, in the end, also have the fruit, the results from it 100%, rather than sharing it 50/50. So there is always a little bit this dilemma. No, I am not ruling it out.

Speaker #1: We have to we could do more particularly , probably on , on our flagships . So so that's always on the table . But but currently I do not expect that , you know , we'll see that immediately changes .

Speaker #1: You know , the the , the problem is always you've seen it with this Remerchandising projects that it's nice that we can , you know , put so much effort in it , but it's also nice to , to , in the end , also have the , the fruit , the results from it .

Speaker #1: 100% rather than , than in , in , in sharing it 5050 . So there's always a little bit this dilemma , but no , I'm not ruling it out .

Speaker #1: I think it also is linked a little bit to the overall appetite for retail property and , and probably more and more also for , you know , shopping centers , which is being evidenced by more transactions over the last , you know , a couple of months , a year than , than before that , you know , institutional money is back in , in shopping centers .

Evert Jan van Garderen: I think it also is linked a little bit to the overall appetite for retail property and probably more and more also for shopping centers, which is being evidenced by more transactions over the last couple of months, year than before, that institutional money is back in shopping centers. So that obviously is important because a long-term investor into one of our centers where we obviously take the lead and do all the management could certainly be helpful and unlock for us funds to reinvest. On your other question, we are always monitoring our markets, and indeed, Mood is a result of, okay, you can say it is very close by because it is next to our mall in Fiordaliso. No, we are always looking at where we can do accretive things. I think Avion is a clear example with an asset where it is yielding at a nice level.

Speaker #1: So that obviously is important because a long term investor in , into one of our centers where we obviously take the lead and do all the management could certainly be helpful and unlock for us funds to , to reinvest and on your other question , we're always monitoring our markets .

Speaker #1: And indeed , mood is a result of , okay , you can say it's very close by because it's , it's next to our , our mall in the fjord .

Speaker #1: But no , we , we're always looking at where we can do a creative things . I think is , is a clear example with an asset where , where , you know , it's yielding a , a , a nice level .

Speaker #1: We , we're very active with , with the leasing there , as you may recall , we had some higher vacancy in that shopping center than we're used to in our other centers .

Evert Jan van Garderen: We are very active with the leasing there. As you may recall, we had some higher vacancy in that shopping center than we are used to in our other centers, but that was actually the potential. We have done already a first nice letting to a toy retailer, Lekia, and there is more to come. Hopefully, we can announce it at some point. It always takes a bit of time to reshuffle here and there. No, we are absolutely looking into what is possible. Yeah.

Speaker #1: But that was actually the potential . And we done already a first nice letting to a toy retailer . Licea . And , and there's more to come .

Speaker #1: Hopefully we can announce it at some point . It always takes a bit of time to reshuffle here and there , but no , we're we're absolutely looking into what what is possible .

Speaker #1: Yeah

Speaker #5: Okay . Clear . And then my last one , you mentioned the positive investment markets . Institutional money is back . We've seen a lot of transactions .

Steven Boumans: Okay. Clear. My last one. You mentioned positive investment markets, institutional money is back. We have seen a lot of transactions. Does that entail H2 revaluations could be higher than H1?

Steven Boumans (ABN AMRO: Okay. Clear. My last one. You mentioned positive investment markets, institutional money is back. We have seen a lot of transactions. Does that entail H2 revaluations could be higher than H1?

Speaker #5: Does that entail H2 revaluations could be higher than H1?

Speaker #1: Oh, well, let's say the valuations—you know, what we saw really is that we got an uplift in value because we had a higher NOI.

Evert Jan van Garderen: Let's say the valuations, what we saw really is that we got uplifts in value because we had a higher NOI. So no yields shifts or changes. Obviously, depending on what we will see further, maybe this quarter, next quarter in the markets, there could be some change in yields. If yields don't change, then I think what we will see is just a reflection of further increase in rental income, which obviously suits us because we will have more rental income due to the remerchandising. I think it's encouraging to see typically also more in Southern Europe, all those transactions and how active these markets is. Obviously Spain, but now also Italy. So, that is certainly, I think, a positive signal. Roberto?

Speaker #1: So, no yield shifts or changes. It obviously depends on what we will see further, maybe in this quarter or next quarter in the markets, that there could be some change in yields.

Speaker #1: You know , if yields don't change , then I think what we will see is just a reflection of further increase in rental income , which obviously suits us because we we will have more rental income due to the Remerchandising .

Speaker #1: But yeah , I , I think it's encouraging to see typically also more in , in southern Europe , all those transactions and how active the .

Speaker #1: These markets is obviously Spain . But now also Italy . So that is certainly , I think , a positive signal . Yeah .

Speaker #1: Roberto. I mean, yeah.

Roberto Fraticelli: Yeah. True. We look at the ERVs positively because, of course, of the remerchandising. We also monitor the EURIBOR, because you never know where the interest curve is, and that, of course, has an impact on perceptions. But, we might see some improvement of yields in particular in some countries. But the valuers will then at the end decide whether they are happy with this evidence, yes or no.

Speaker #2: Not true. I mean, we look at the eaves positively because of course of the remerchandising. We also monitor the Euribor because you never know what the interest curve is.

Speaker #2: And that of course is an impact on , on , on perceptions . But you know , we might see some improvement of yields in , in some in some , particularly in some countries , but it's the valuers .

Speaker #2: And then at the end, decide whether they are happy with this evidence—yes or no.

Speaker #5: Okay. Clear. Thank you so much.

Steven Boumans: Okay. Clear. Thank you so much.

Steven Boumans (ABN AMRO: Okay. Clear. Thank you so much.

Speaker #2: Thank you .

Speaker #1: Thank you, Stephen. Thank you.

Roberto Fraticelli: Thank you.

Evert Jan van Garderen: Thank you, Steven.

Roberto Fraticelli: Thank you.

Speaker #3: The following question comes from Kai from Berenberg. Please go ahead.

Operator: The following question comes from Kai Klose of Berenberg. Please go ahead.

Speaker #6: Yes . Good morning . I've got three questions , if I may . The first one you mentioned a slight increase in bad debt and provisions in the first half .

Kai Klose: Yes. Good morning. I have got three questions, if I may. The first one, you mentioned a slight increase in bad debt and provisions in the H1. Maybe you could give more details for which region and maybe for a certain group of tenants that applied. Second question is on page 33 of the release, the ERV of the portfolio compared to December was slightly lower. Is this because you captured some of the rent reversion or is there any other reason for? The third question is on Avion in Sweden. Could you give some details if there is potential for any future remerchandising already now?

Speaker #6: Maybe you could give more details on which region, and maybe for certain groups of tenants that applied. Second question is on page 33 of the release: the ERV of the portfolio compared to December was slightly lower.

Speaker #6: Is this because you captured some of the rent reversion, or is there any other reason for it? And the third question is on the Avion in Sweden. Is there any potential?

Speaker #6: Could you give some details if there’s potential for any future remerchandising already now?

Speaker #1: Yeah . Well , thank you , Kai , for for your questions for the bad debts . I'll I'll hand over to Roberto to talk about that .

Evert Jan van Garderen: Well, thank you, Kai, for your questions. For the bad debts, I will hand over to Roberto to talk about that.

Speaker #2: Yeah . Let's say we highlighted some tenants in particular in France . Right . And we said , well , maybe let's take an extra provision for them just to be on the safe side because we've seen some tenants where their financial statements and where their balance sheet was deteriorating a bit .

Roberto Fraticelli: Yeah. Let us say we highlighted some tenants in particular in France. We said, "Well, maybe let us take an extra provision for them just to be on the safe side." Because we have seen some tenants where their financial statement and where their balance sheet was deteriorating a bit. So we decided to take some extra provision just in case. For concerns the page 33, the lower Let me see. What was your question?

Speaker #2: So, we decided to take some extra provision just in case for concerns. The page 33—the lower... Let me see. What was your question?

Speaker #1: That was the ERP, which I...

Evert Jan van Garderen: That was the ERV.

Roberto Fraticelli: ERV.

Speaker #2: Yeah, that's mainly related to France from memory.

Evert Jan van Garderen: That's maybe related to France from memory.

Speaker #1: Yeah . And I think obviously we follow the Emperor definition carefully . So we have to , to put the analyze . Net net rents in and in the case of of France , the the amount you see in the table is a bit lower than at the end of December , reflecting also some of the deals we .

Roberto Fraticelli: Yeah, I think obviously we follow the EPRA definitions carefully. So, we have to put the analyzed net rents in, and in the case of France, the amount you see in the table is a bit lower than at the end of December, reflecting also some of the deals

Evert Jan van Garderen: Deals

Speaker #1: We had to do . We've done in France in terms of getting , you know , nice , good brands in . And in some cases we we then not did achieve the passing rent , but that is that is the effect .

Roberto Fraticelli: we've done in France, in terms of getting nice good brands in. In some cases, we then did not achieve the passing rents. That is the effect. Other countries it's different, but in France, you can see that.

Speaker #1: I mean, other countries are different, but in France you can see that. And then, and then Kai, on Avion Remerchandising.

Evert Jan van Garderen: Then, Kai, on Avion remerchandising. Yeah, indeed. The remerchandising, if we can use it a little bit more as a, let's say, a container for all sorts of leasing activities, major leasing activities to improve the occupancy, to improve the tenant mix. Then the Avion is an example typically where the vacancy, which is there higher than in our other centers. That's exactly the opportunity. So we are quite excited about reducing that vacancy. We see a lot of potential. We are in a lot of discussions at the moment. Hopefully, we can be more vocal on this later in the year. That is then a big plus if we reduce the vacancy in Avion, particularly on the first floor of the gallery. Ground floor is fully occupied, but the first floor, that is where the potential is. So that's certainly one element.

Speaker #1: Yeah , indeed . I mean the , the , the remerchandising , if we can use it a little bit more as a , let's say a container for all sorts of leasing activities , a major leasing activities to improve the occupancy , to improve the tenant mix .

Speaker #1: Then the Avion example , typically where the , the , the vacancy which is they're higher than in our other centers . That's exactly the opportunity .

Speaker #1: So, we are quite excited about reducing that vacancy. We see a lot of potential, and we are in a lot of discussions at the moment.

Speaker #1: Hopefully we can be more vocal on this later in the year because that that is then a big plus . If we reduce the vacancy in in Avignon , a particularly on the on the first floor of the gallery , ground floor is , is fully occupied .

Speaker #1: But the first floor , that is where the potential is . So that that certainly one element , the other element for us is that we .

Evert Jan van Garderen: The other element for Avion is that we also have possibility to increase the food and beverage offer outside on the parking. There is currently now a McDonald's, but we can do more food offer there on a plot of land which is included in the deal. I think that are the two special features of Avion where we can create value.

Speaker #1: We also have possibility to increase the food and beverage offer outside on the parking . There's currently . Now a McDonald's , but we can do more food offer there on on a plot of land which is included in in the deal .

Speaker #1: So I think those are the two special features of Avenue where we can create value.

Speaker #6: Perfect, many thanks. And the very last one, if I may—the appointment of a new group leasing director—is a bit of a reflection that more international tenants are asking for different types of contracts.

Kai Klose: Perfect. Many thanks. The very last one, if I may. The appointment of a new group leasing director is a bit of reflection that more international tenants ask for couple different type of contracts or is it more for the evolution of the group going forward?

Speaker #6: So, is it more for the evolution of the group going forward?

Speaker #1: No . Let's say we're very happy to , you know , have been able to announce this appointment because , as you know , we're active in four countries and we see a lot of the retailers who , you know , are active in in our countries .

Roberto Fraticelli: Well, let's say we are very happy to have been able to announce this appointment because, as you know, we are active in four countries and we see a lot of the retailers who are active in our countries and we see some going from north to south. Maybe not too many yet going south to north, but hopefully, with Laurent on board, we can help them a bit. I think it is really important that we are acting as and coordinate the leasing, making sure that we really, of course, country by country, we are doing deals, but in some cases, it is also very good to look from a group level, international level, as the retailers do. I think we are very happy to have Laurent with us, and it will further help in our leasing and remerchandising activity. I think the number one key activity of Eurocommercial is leasing.

Evert Jan van Garderen: Well, let's say we are very happy to have been able to announce this appointment because, as you know, we are active in four countries and we see a lot of the retailers who are active in our countries and we see some going from north to south. Maybe not too many yet going south to north, but hopefully, with Laurent on board, we can help them a bit. I think it is really important that we are acting as and coordinate the leasing, making sure that we really, of course, country by country, we are doing deals, but in some cases, it is also very good to look from a group level, international level, as the retailers do. I think we are very happy to have Laurent with us, and it will further help in our leasing and remerchandising activity.

Speaker #1: And , and we see some going from north to south , maybe not many too many yet going south to north , but hopefully with Laurent on board , we can help them a bit .

Speaker #1: I know I , I think it's really important that , you know , we are acting as an coordinate . The leasing , making sure that , you know , we , we we really of course , country by country , we're doing deals .

Speaker #1: But in some cases, it's also very good to look from a group level, international level, as the retailers do. So I think we are very happy to have Laurent with us.

Speaker #1: And , you know , it will further help us in in our leasing and remerchandising activity . I think the number one key activity of Eurocommercial is leasing .

Evert Jan van Garderen: I think the number one key activity of Eurocommercial is leasing. We will maximize efforts to perform.

Speaker #1: So we will maximize efforts to perform.

Roberto Fraticelli: We will maximize efforts to perform.

Speaker #6: Very clear . Many thanks

Kai Klose: Okay, many thanks.

Speaker #1: Thank you. You're welcome, Kai.

Roberto Fraticelli: You're welcome, Kai.

Speaker #3: The following question comes from Peter Rennebohm from Van Lanschot. Please go ahead.

Operator: The following question comes from Pieter Runneboom from Van Lanschot Kempen. Please go ahead.

Speaker #7: Hi team. Thanks for taking my question. Could I ask a question on the additional rent that you published on the three remerchandising projects?

Pieter Runneboom: Hi, team. Thanks for taking my question. Got a question on the additional rent that you published on the three remerchandising projects.

Speaker #7: This is to take into account the temporary disruption. So, in other words, does the rental uplift there reflect the incremental higher rents compared to no remerchandising?

Roberto Fraticelli: Yep.

Pieter Runneboom: Does this take into account the temporary disruption? In other words, does the rental uplift there reflect the incremental higher rents compared to no remerchandising, or does it reflect the incremental higher rents compared to a vacant unit?

Speaker #7: Or does it rather reflect the incrementally higher rents compared to a vacant unit?

Speaker #2: Yeah . What we try to do and we try to describe it on the top is we're comparing , let's say , 2027 rents , which we know because we signed the contracts , which was before the we started with the entire operation .

Roberto Fraticelli: Yeah. What we try to do, and we try to describe it on the top, is we are comparing, let's say, 2027 rents, which we know because we signed the contracts.

Roberto Fraticelli: Yeah. What we try to do, and we try to describe it on the top, is we are comparing, let's say, 2027 rents, which we know because we signed the contracts. With both rents are income before we started with the entire operation. So that you give it to moments which are unaffected by the works. So what is the rent in 2027? And we take out inflation, just not to cheat. So that we can show you the increase then that is achieved also, which is going to be achieved. That is for the future with the remerchandising and the renewals and relets. Yeah.

Roberto Fraticelli: With both rents are income before we started with the entire operation. So that you give it to moments which are unaffected by the works. So what is the rent in 2027? And we take out inflation, just not to cheat. So that we can show you the increase then that is achieved also, which is going to be achieved. That is for the future with the remerchandising and the renewals and relets. Yeah.

Speaker #2: So that you get your two moments which are unaffected by the works. So, was there any in 2020? What is the rent in 2027?

Speaker #2: And we take out inflation, just not to cheat, so that we can show you the increase. Then that is achieved. Also, which is going to be achieved.

Speaker #2: That's for the future, with the merchandising and the renewals and lettings. Yeah.

Speaker #7: Okay. That's very clean and quite spectacular. And lastly, on the—

Pieter Runneboom: Okay. That is very clean and quite spectacular. Lastly, on the-

Roberto Fraticelli: We would agree with you, even. Yeah. You can do the math to see what it is in percentage, but we thought we would just give you the amounts. Yeah. For Enghien, to be completely and totally fair, of course, we replaced a hypermarket. So the step up that you do compared to other retailers is higher.

Speaker #1: Yeah, yeah. But you can do the math to see what it is in percentage, but we thought we'd just give you the amounts.

Speaker #2: Yeah. For Angelique, to be completely and totally fair, of course we replace the hypermarket. So this step up that you do compared to other retailers is higher.

Speaker #7: Yeah . Okay . Thanks I've got one on the OCR . So year on year these dropped like 90 Bips to 9.2% . And in the same period the retail sales were up 4.3% .

Pieter Runneboom: Yeah. Okay. Thanks. I got one on the OCRs. Year-on-year, these dropped 90 bps to 9.2%. In the same period, the retail sales were up 4.3%. That explains less than half of the drop, the higher retail sales. What are the other drivers then in the drop in OCR?

Speaker #7: So what's that explains less than half of the drop . The the higher retail sales . So what are the other drivers then in the drop in OCR

Speaker #1: Yeah .

Speaker #2: Yeah . Well you're correct . This this increase in sales , they're also more efficiency for concerns . The the service charges . So that also helps .

Roberto Fraticelli: Well, you are correct. So there is increasing sales. There are also more efficiency for concerns the service charges. So that also helps. And of course, that is countered by our greed to increase the rents. But I would say the two main factors are, of course, the increase in turnover, which is driven by the increase in footfall, which we are trying to achieve also with these projects, and also all the ESG that you have seen, the solar panels, the refurbishments, and everything that is all aimed also at trying and managing in a more active way the service charges so that we can provide lower the service charges in the future because we improve the production, for example, of electricity and that kind of stuff.

Speaker #2: And of course that is counter by our greed to increase the the rents . But I'd say the two main factors are of course the increase in turnovers , which is driven by the increase in footfall , which we are trying to achieve .

Speaker #2: Also with this project and also all the ESG that you've seen and the solar panels , the Refurbishments and everything . That's all aimed also at try and manage in a more active way .

Speaker #2: The service charges so that we can provide a lower— The service charges in the future because we improve the production, for example, of electricity and that kind of stuff.

Speaker #7: Okay. That's very helpful. Thank you.

Pieter Runneboom: Okay. That is very helpful. Thank you.

Speaker #2: Thank .

Speaker #1: Thank you, Peter.

Roberto Fraticelli: Thank you. Thank you, Pieter.

Speaker #3: The following question comes from Benjamin Legrand from Kepler Cheuvreux. Please go ahead.

Operator: The following question comes from Benjamin Legrand from Kepler Cheuvreux. Please go ahead.

Speaker #8: Yes. Good morning. Can you hear me?

Benjamin Legrand: Yes. Good morning. Can you hear me?

Speaker #2: I can hear you very well.

Roberto Fraticelli: We can hear you very well, Benjamin.

Speaker #1: Benjamin .

Benjamin Legrand: Perfect. Thanks for taking my questions. Just a couple for me. You just mentioned the need to increase the rent, also considering your OCR, which is pretty low, or let's say lower than it used to be. I am just basically wondering how much higher you can go in terms of pushing the rent, in terms of rental uplift. Can you actually go higher to what we are seeing before, or should we expect this reversion to stabilize now? Also related to the, let's say, like-for-like rental growth. In some of your peers, we see that the like-for-like is boosted compared to your performance, while if I look at the operational performance of your retailers, you are actually better, and I think a lot of it comes from initiative. We talk about screens, we talk about marketing fees, et cetera, which is not something you really mention a lot.

Speaker #8: Perfect . Thanks for taking my questions . Just just a couple for me . You just mentioned the greed to increase the rent .

Speaker #8: Also , considering your OCR , which is pretty low , let's lower than be . I'm just wondering how much higher you can go in terms of pushing the rent .

Speaker #8: And in terms of rental uplift , can you actually go higher to what we are seeing before , or should we expect this reversion to , to stabilize ?

Speaker #8: Now ? And also related to , to the , let's say like for like rental growth in some of your peers , we see that the like for like is boosted compared to your performance .

Speaker #8: While if I look at the operational performance of your retailers , you actually better . And I think a lot of it comes from initiatives , you know , we talk about screens , we talk about marketing fees , etcetera , etc.

Speaker #8: , which is not something you really mention a lot . So I'm just wondering if it's some potential for you guys also to , to push your like for like rental growth higher in the future .

Benjamin Legrand: I am just wondering if it is some potential for you guys also to push your like-for-like rental growth higher in the future. So that would be my two questions.

Speaker #8: So that would be my two questions.

Speaker #1: Yeah , yeah , no , thank you . Benjamin for , for the questions . If we look at like for like rental growth and then also look at , you know , uplifts on renewals and lettings , and then you say , you know , of course there is , there is some connection , but we should not forget that the renewals , re lettings is just a proxy of the whole portfolio around .

Evert Jan van Garderen: Yeah. No, thank you, Benjamin, for the questions. If we look at like-for-like rental growth and then also look at our uplifts on renewals and relettings, and then you say, of course, there is some connection, but we should not forget that the renewals relettings is just a proxy of the whole portfolio, around you could say almost 20% of our minimum guaranteed rent. That is basically what you can do, because these contracts either expire and you renew or you find new tenants, whereas the rental growth is the whole portfolio. The rental growth we measure is also including any, if there is a lease incentive, a step-up or maybe a short rent free, it is all in there. In the renewals relettings, obviously, you really measure what your future rent will be.

Speaker #1: You could say almost 20% of our minimum guaranteed rent , that that is basically what what you can do because these contracts either expire and you renew or you find new tenants , whereas the rental growth is the whole portfolio and the rental growth we measure is also including , you know , any if there is a lease incentive , a step up or maybe , maybe a shorter free , it's all in there in the renewals lettings , obviously you really measure what your future rents will be and the .

Speaker #1: We basically also , you know , I , I know that some of our peers , you use Ervs , but we still keep an eye on the passing rent .

Evert Jan van Garderen: We basically also, I know that some of our peers use ERVs, but we still keep an eye on the passing rent. So I think that is quite a difference. But good to mention, I think, for the explanation. If we look at income from screens, income from electoral cars as some of our peers call it, specialty leasing. Yes, we do that as well, but it is basically included in our rental income because we are not operators as such. But we try to lease space or surface or whatever it is. We do not show a special income line for that, which also has to do with our Dutch REIT status because in the end, we are a REIT, but we can only be a REIT if we invest in property and lease property, and that is what we are doing also in the specialty leasing.

Speaker #1: So I think that is quite a difference . But good to mention , I think for the explanation , if we look at , you know , income from screens , income from electrical cars as as some of our peers call it , specialty leasing .

Speaker #1: Yes , we do that as well . But it's basically included in our rental income because we , we are not operators as such , but , you know , we , we try to lease space or surface or whatever it is .

Speaker #1: And we don't show a special line income line for that , which also has to do with our Dutch REIT status , because in the end , we are a REIT , but we can only be read if we , you know , invest in property and lease property .

Speaker #1: And that's what we're doing also in the specialty leasing . So be assured that we do all those things , meaning that we what we , whatever we can lease , we do lease in space , but , you know , we're not operators or certainly turning ourselves into a marketing company or a parking company or an electricity company .

Evert Jan van Garderen: So, be assured that we do all those things, meaning that whatever we can lease, we do lease in space, but we are not operators or suddenly turning ourselves into a marketing company or a parking company or an electricity company.

Speaker #8: Yeah , yeah .

Benjamin Legrand: Yeah.

Speaker #2: So maybe also to add , if you look at the future , of course , there was also the , the merchandising projects , which had an impact on the like for like , and also the impact that you will see .

Roberto Fraticelli: Maybe also to add, if you look at the future, of course, there was also the merchandizing projects that would have an impact on the like-for-like. Also the impact that you will see, that is what we are building now. It is actually for the renewals and relettings of the future. So right now we are building new revamped shopping malls to attract more people, to increase turnovers. Then, of course, let us say around between 15% and 20% of the leases are actually under negotiation every year. So what you will see is that the turnover is increasing for the retailers. So by the next round of negotiations, then we will be able to increase the rental income by a higher percentage because, of course, the benefit from the results of this merchandizing. If that makes sense, Benjamin.

Speaker #2: That's what we're building now. It's actually for the renewals and things of the future. So right now, we are building new, revamped shopping malls to attract more people and increase turnovers.

Speaker #2: But then of course , let's say around between 15 and 20% of the leases are actually under renegotiation every year . So what you will see is that turnover is increasing for for the retailers .

Speaker #2: So by the next round of negotiations, we will be able to increase the rental income by a higher percentage because, of course, they benefit from the results of this merchandising.

Speaker #2: If that makes sense .

Speaker #8: Yeah , yeah , it makes perfect sense . But for the yeah , for the specialty leading screens , etc. , it's just because at some of your peers , it , it really sounds like it's the driver of the like for like performance .

Benjamin Legrand: Yeah. It makes perfect sense. But for the specialty leasing and screens, et cetera, it is just because at some of your pieces, it really sounds like it is the driver of the like-for-like performance. A portion of it at least. I am just wondering if it is going to be a real driver for you, too, or if it is just following the same pace as your, let us say, standard rental income.

Speaker #8: I mean , a portion of it , at least . And I'm just wondering , yeah , if it's , if it's going to be a real driver for you to , or if it's just following the same pace as your , let's say , standard rental income .

Speaker #2: Yeah , let's say we are busy with screens . We're busy with a lot of stuff . With parking as well , but that's all included in the , in the rental income because we see that as leasing of spaces within the shopping center .

Roberto Fraticelli: Yeah. Let us say we are busy with screens, we are busy with a lot of stuff with parking as well, but that is all included in the rental income because we see that as leasing of spaces within the shopping center. If you look at Tesla, of course, they install new car chargers. They pay a lot of money. If you look at screens, you can rent them out, and they also provide a lot of money. What we try and do is, for example, use part of this money for the service charges, part of this money is really rental income, and depending on also on who does the investment. Sometimes you ask the provider to put the screens on, and you accept the lower rental income, but then you also have a lower CapEx.

Speaker #2: So that's , you know , if you look at Tesla , of course , you know , they install new car charges , they pay a lot of money .

Speaker #2: If you look at screens , you know , you can rent them out . And they also provide a lot of money . Or we try and do is , for example , use part of this money for the service charges .

Speaker #2: Part of this money is really rental income. And depending also on who does the investment, sometimes you ask the provider to put the screens on and you accept a lower rental income, but then you also have a lower CapEx.

Speaker #2: And sometimes you agree to install the screens, and then you can ask for a higher rental income. So, it depends on a lot of things.

Roberto Fraticelli: Sometimes you agree to install the screens, then you can ask for a higher rental income. So it depends on a lot of things.

Speaker #8: Okay. Thank you. Thanks a lot.

Benjamin Legrand: Okay. Thank you. Thanks a lot.

Speaker #1: You're welcome

Roberto Fraticelli: You are welcome.

Speaker #3: Our final question comes from Tom Barry from Green Street. Please go ahead.

Operator: Our final question comes from Tom Berry from Green Street. Please go ahead.

Speaker #9: Morning , guys . Just a very quick question for me . I wonder if you could just provide a comment on the new development that may may come online in 2028 in Brussels .

Tom Berry: Morning, guys. Just, a very quick question from me. I wonder if you could just provide a comment on the new development that may come online in 2028 in Brussels, very close obviously to your flagship. Is it the Brooklyn development? Just how you are thinking about that from a competition standpoint. Thank you.

Speaker #9: Very close, obviously, to your flagship. Is it the Brooklyn development, and just how are you thinking about that from a competition standpoint?

Speaker #9: Thank you .

Speaker #1: Yeah . Thank you , Tom , for for your question . Indeed , a project which has been there for , for many , many years and which which has now been more activated because after a number of rounds , there's finally a permission to , to build a and let's say a retail there , but also I from memory , there can be a data center and other types of , of property .

Evert Jan van Garderen: Yeah. Thank you, Tom, for your question. Indeed, a project which has been there for many, many years, and which has now been more activated because, after a number of rounds, there is finally a permission to build, let us say, retail there, but also, from memory, there can be a data center and other types of property. It is a big plot on the ring, Brussels. Obviously, I can only refer to public information, but let us say what we understand is that the project is being promoted, that they are looking obviously for tenants and also look for a planning to build it. According to the latest news, at least the plans have been extended or let us say postponed for another year. If it happens, we have to see what in the end will be built there and how it is leased.

Speaker #1: It's , it's a big plot on the ring . Brussels obviously I can only refer to public information , but , but let's say what we understand that the project is being promoted , that , you know , they're looking to obviously for for tenants and , and also where look for a planning to build it according to the latest news , at least the the plans have been extended or let's say postponed for another year .

Speaker #1: And yeah , let's say if it happens , we have to see what in the end will be built there . And and how it is leased .

Speaker #1: I think it's also a fair comment that this is in Flanders and aimed at , you know , customers in Flanders , whereas The The catchment , which has is mostly in in the east and the south of of Brussels .

Evert Jan van Garderen: I think it is also a fair comment that this is in Flanders and aimed at customers in Flanders. Whereas the catchment which Woluwe has is mostly in the east and the south of Brussels. So there will be maybe some overlap, but our catchment is Francophone, French speaking people in Brussels and in Wallonie. So, whether there will be competition, difficult to assess, but for now, we do not see that really as an issue for Woluwe. We will see what the future brings, but that is all I can say about Brugge.

Speaker #1: So there will be maybe some overlap , but our our catchment is francophone , a French speaking people in in Brussels and , and in only .

Speaker #1: So whether there will be competition difficult to to assess . But for now we don't we don't see that really as an as an issue for Holloway .

Speaker #1: Us . We'll see what what the future brings . But that's all I can I can say about Brooklyn .

Speaker #9: Thank .

Speaker #10: You

Roberto Fraticelli: Thank you.

Speaker #3: It appears we have one more question from Amal Abou Horton from Betacam. Please go ahead.

Operator: It appears we have one more question from Amal Aboulkhouatem from Degroof Petercam. Please go ahead.

Speaker #2: Hi , Mel .

Evert Jan van Garderen: Hey, Amal.

Speaker #3: Hello .

Amal Aboulkhouatem: Hello, good morning. Thank you for taking my question. Just to come back on France and the performance, I am just struggling to reconcile the footfall increase with the retailer sales increase, which are like +4% footfall increase, only 1.4% retailer sales. Is there any specific explanation here?

Speaker #11: Good morning . Thank you for taking my question . Just to come back on France and the performance . I'm just struggling to get to reconcile the footfall increase with the retailer .

Speaker #11: Sales increased with like-for-like plus 4% footfall increase. Only 1.4% retailer sales. Is there any specific explanation here?

Speaker #1: We probably need to stop them to to to shop . But no , I mean it's indeed it's not always a a clear correlation or that that more fruitful translates into into more turnover .

Evert Jan van Garderen: We probably need to stop them to shop. No, Amal, indeed, it is not always a clear correlation or that more footfall translates into more turnover. I think so far, we are happy that at least the footfall is growing. That is a good sign. The turnovers hopefully will follow. Indeed, we spotted the same, I am not saying anomaly.

Speaker #1: I think so far , you know , we're happy that at least the footfall is , is growing . That's a good sign .

Speaker #1: But the turnovers hopefully will will follow . But but indeed we spotted the same let's say I'm not saying anomaly but there is there is this this gap .

Amal Aboulkhouatem: Yes

Evert Jan van Garderen: but there is this gap. Hopefully, those turnover numbers do improve as well at the same pace as the footfall is developing. Roberto, any?

Speaker #1: So hopefully those turnover numbers do improve as well . At the same pace as the the footfall is , is developing . Roberto any

Speaker #2: Are true . And we also look for example , if you take each . Of course there's a negative footfall and the negative on the turnovers .

Roberto Fraticelli: True. We also look, for example, if you take Enghien, of course, there is a negative footfall, and the negative on the turnovers. Because if you close the upper market, for example, that has a lot of footfall and also quite a significant turnover. For us, the income at the end, it is not really a huge income because of course, they pay lower than the normal tenant. For example, if you close the upper market in Enghien, then you will see a decrease in visitors numbers, which is higher than the decrease in turnover. Those are things that could also play. Because this has been, as last year, a bit of a year of change with all these merchandising projects.

Speaker #2: Because if you close the upper market, for example—I mean, that has a lot of footfall and also quite a significant turnover.

Speaker #2: But for us , let's say Let's say the the , the income at the end , you know , it's not really a , a huge income because of course they pay a lower than the normal tenant .

Speaker #2: So for example , if you go to the upper market in Italy , then you will see a decrease in , in visitors numbers , which is higher than the decrease in turnover .

Speaker #2: So those are things that could also play, because this has been, as last year, a bit of a year of change with all this, this remerchandising project.

Speaker #2: So we are , I think as curious as you are . And to see what will be in 2027 when we get rid of all this disruptions , to see what is the real impact on footfall and what is the link up on on turnovers , if that makes sense ?

Roberto Fraticelli: We are, I think, as curious as you are to see what will be in 2027 when we get rid of all these disruptions, and to see what is the real impact on footfall and what is the real impact on turnovers, if that makes sense, Amal.

Speaker #11: Yeah, it's not linked to, do you have, for example, which has a specific situation, on the way to the train station now.

Amal Aboulkhouatem: Yeah. It is not linked to Les Passages, for example, which has a specific situation on the way to the train station, no?

Speaker #1: Yeah , yeah , yeah . I mean , let's say Roberto was talking about about Italy and your , your particularly also looked at France where I mean , you , you mentioned you have actually there the figures are , are quite encouraging in terms of , of also the footfall .

Evert Jan van Garderen: Yeah. Roberto was talking about Italy and you particularly also looked at France where, you mentioned Passage du Havre. There, the figures are quite encouraging in terms of also the footfall. We know it is a passage. As I said before, we need to stop those people in Passage du Havre to make them shopping. We are doing that by also some changes in the tenant mix over there. Hopefully we are successful.

Speaker #1: But then we know it's a passage . So as I said before , we need to stop those people in passage du Havre to , to , to make them shopping .

Speaker #1: And we're doing that by also making some changes in the tenant mix over there. So hopefully we were successful also.

Roberto Fraticelli: Also the conversion of the upper market. I mean, this point, that is also maybe.

Speaker #2: The conversion of the Intersport—that's also maybe...

Speaker #11: Just to follow up on on France , would you as a disposal or asset rotation finance future growth ? As we have been successful to acquire in Sweden and Italy and France ?

Amal Aboulkhouatem: Just to follow up on France, would you consider asset disposal or asset rotation to finance future growth? Do you think that you have been successful to acquire in Sweden and in Italy and France is clearly weaker than the other markets? Is that something you are looking at, even if the market is not easy for sure these days?

Speaker #11: It is clearly weaker than the other markets. So, is that something you are looking at? If the market is not easy, for sure.

Speaker #11: These days .

Speaker #1: Yeah . Let's say we have assets rotation . Obviously is is on our our agenda . But that also means that you , you have to , to see where are the opportunities really , where are the markets ?

Evert Jan van Garderen: Yeah. Asset rotation obviously is on our agenda. That also means that you have to see where are the opportunities really, where are the markets, and as I said before, we see that markets like Italy is opening. France is quite soft, you could say. It is something which may have to do also with the macro politics, et cetera. Therefore, we are very glad that we are acting in four markets and not in one, so that we can still make use of our country ratings. As you have seen, by just one transaction, in Sweden. Now Sweden is the number 2 country in the portfolio, and France number 3. These things vary. I am sure France will recover, and it is a big country, it is a big market. At the moment, probably a bit more struggling than our other markets.

Speaker #1: And as I said before , I'm , you know , we see that a market like Italy is opening . France is is quite soft .

Speaker #1: You could say it's something which may have to do also with with the macro politics , etc. . So and therefore we're very glad that we are acting in four markets and not in one .

Speaker #1: So that we can then still make use of our country ratings. And as you have seen by just one transaction.

Speaker #1: Yeah , we let's say in Sweden now Sweden is , is the number two country in the portfolio in France . Number three .

Speaker #1: Yeah . I mean , these these things vary . I'm sure France will , will recover . And you know , it's , it's a , it's a big country .

Speaker #1: It's a big market . But at the moment . Yeah , probably a bit more struggling than other markets . So we'll , we'll we'll focus always on all our four markets as it rotation is always nice to do .

Evert Jan van Garderen: We will focus always on all our four markets. Asset rotation is always nice to do. Let us see where the opportunities are, but for the moment, I think in France, we do not see a lot of transactions. Maybe that improves, I hope.

Speaker #1: So let's see where where the opportunities are . But for the moment , I think in , in , in France we don't see a lot of transactions .

Speaker #1: Maybe that improves. I hope. Yeah.

Amal Aboulkhouatem: Okay. Then the last question on my side, just on the guidance. If you see the static results per share in H1 and multiply by 2, we are already above the guidance. Is there anything to expect in H2 or is it just out of caution that you did not raise the guidance?

Speaker #11: Okay . Perhaps then the last question on my side , just on the guidance , if you see the direct result for sure , for in H1 and multiply by two , we are already above the guidance , is there anything to expect in H2 or is it just out of caution that you didn't raise the guidance ?

Speaker #1: Yeah . Indeed . H2 this year you could say caution . Yeah . There are a few elements which which play a role for us .

Evert Jan van Garderen: Yeah, indeed, H2 this year, you could say caution. There are a few elements which play a role for us. Of course, timing of when rental income kicks in. We already talked about opening of stores mostly before Christmas, but that, of course, will then not contribute so much in this year. We monitor the Swedish krona, which is a volatile currency, was quite strong or relatively stronger in the first half, but now has weakened, is above 11 again for some time, which always has an impact on our earnings. It is all marginal, but these things all add up. The other effect Roberto Fraticelli talked about is an increase in the 3 months EURIBOR and the 3 months STIBOR, not massively, but compared to if you look at Q1, by the way, when we did quite some swaps, so we are very happy we did so.

Speaker #1: But of course , timing of when rental income kicks in , we already talked about the opening of stores , mostly before Christmas , but that of course will then not contribute so much in in this year We monitor the Swedish krona , which is a volatile currency , was quite strong or relatively stronger in the first half .

Speaker #1: But now it has weakened; it is above 11 again for some time, which always has an impact on our earnings. It's all marginal, but these things all add up.

Speaker #1: And the other effect Roberto talked about is an increase in them . In the three months Euribor and the three month Stibor , not massively , but you know , compared to if you look at Q1 , by the way , when we did quite some swaps .

Speaker #1: So we're very happy that we did . So . But we have a part . It's only 20% and even less To 20% of floating debt .

Evert Jan van Garderen: But we have a part, it is only 20%, even less than 20%, of floating debt. But obviously, we roll it over on 3 months EURIBOR and 3 months STIBOR, and therefore the expense will also be a bit higher. So yeah, all in all, we said, we reaffirm the guidance, no problem, but we also need to be realistic. And as you know us, we always try to deliver what we estimate in a proper way.

Speaker #1: But obviously we roll it over on three month euribor and three months . Tibor and therefore the expense will will also be a bit higher .

Speaker #1: So yeah , all in all , we we said , let's just we reaffirm the guidance . No problem . But we also need to be really realistic .

Speaker #1: And as you know , as we're , we're , always , you know , try to deliver what , what we estimate in a proper way

Speaker #3: I do know, indeed. Thank you very much, gentlemen, for these answers. Have a very nice day.

Amal Aboulkhouatem: I do know, indeed. Thank you very much, gentlemen, for this answer. I appreciate it very much.

Speaker #12: You're welcome

Evert Jan van Garderen: You are welcome.

Speaker #5: That was our final question. I would now like to hand the call back over to Alfred for any closing remarks.

Operator: That was our final question. I would now like to hand the call back over to Evert Jan for any closing remarks.

Speaker #1: Yeah , thank you very much , all of you who listened into this conference call . And also all those analysts who asked the questions , all very useful .

Evert Jan van Garderen: Yeah. Thank you very much all of you who listened into this conference call and also all those analysts who asked the questions, all very useful. We are very happy that we could today communicate our results and have this call. I think on balance, we can say very happy with the operational results and all the other facts we talked about. From us, Roberto and myself as a board, we would like to thank everybody for the interest in the company, and we wish you a pleasant day.

Speaker #1: So we're we're very happy that we could today communicate our results and have this call and yeah , I think on , on balance , we can say very happy with the operational results .

Speaker #1: And , and all , all the other facts we talked about . So from us , Roberto Marcel , as a board , we would like to thank everybody for for the interest in the company .

Speaker #1: And we wish you a pleasant day.

Operator: The host has ended this call. Goodbye.

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Q2 2026 Eurocommercial Properties NV Earnings Call

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