Half Year 2026 NEPI Rockcastle NV Earnings Call

August 19, 2026

Speaker #1: Good morning, and welcome to the presentation of NEPI Rockcastle results for the first half of 2026. I'm here with my dear colleagues, Eliza and Marius, and we will be the hosts of the day. Thank you for what was a very successful first half of the year.

Marek Noetzel: Good morning, and welcome to the presentation of NEPI Rockcastle results for the H1 of 2026. I am here with my dear colleagues, Eliza and Marius, and we will be the hosts of the day to take you through what was a very successful H1 of the year. I am here for the first time as CEO, so I am privileged to report as CEO for the first time. I think the results are to your satisfaction, and we will be here today to unpack where they come from. More importantly, we would like to tell you what is the future of NEPI Rockcastle. As you might have noticed, there were quite a few pivotal moves in the portfolio management of NEPI, so let us unpack it a bit for you.

Marek Noetzel: Good morning, and welcome to the presentation of NEPI Rockcastle Results for the H1 of 2026. I am here with my dear colleagues, Eliza and Marius, and we will be the hosts of the day to take you through what was a very successful H1 of the year. I am here for the first time as CEO, so I am privileged to report as CEO for the first time. I think the results are to your satisfaction, and we will be here today to unpack where they come from. More importantly, we would like to tell you what is the future of NEPI Rockcastle. As you might have noticed, there were quite a few pivotal moves in the portfolio management of NEPI, so let us unpack it a bit for you.

Speaker #1: I'm here for the first time as CEO, so I'm privileged to report as CEO for the first time. I think the results are to your satisfaction, and we will be here today to unpack where they come from.

Speaker #1: But more importantly, we would like to tell you what the future of NEPI Rockcastle is. As you might have noticed, there have been quite a few pivotal moves in the portfolio management of NEPI.

Speaker #1: So, let us unpack it a bit for you. When I read the name NEPI Rockcastle, which stands for New Europe Property Investments, we should go back almost 20 years ago.

Marek Noetzel: When I read the name NEPI Rockcastle, which stands for New Europe Property Investments, we should go back almost 20 years ago. This was the time when NEPI was founded, first in Romania, with the intention to create a retail platform in the region which was very much underdeveloped in terms of new shopping centers. That region was very rightfully identified as a region of high potential. Then we are 19 years later, managing over EUR 8 billion worth of assets and total assets of over EUR 9 billion, becoming the biggest and most relevant player in the market. Now when I read the same name in that context, New Europe, it still reads very well. New Europe means new territories for the very well-established and very successful platform in CEE.

Speaker #1: This was the time when NEPI was founded in Romania, with the intention to create a retail platform in the region, which was very much underdeveloped in terms of new shopping centers. That region was rightfully identified as a region of high potential.

Speaker #1: And then we are, 19 years later, managing over $8 billion worth of assets, and total assets of over $9 billion—becoming the biggest and most relevant player in the market.

Speaker #1: So now, when I read the same name in that context—New Europe—it still reads very well. I mean, New Europe means new territories for the very well-established and very successful platform in CEE.

Speaker #1: And I would like to pause a bit here to tell you a bit about why Spain, why now, and why not a few years ago. Given the size of NEPI's balance sheet, and given our ambitions to grow, Central Europe started to become a bit too small—a growth story for us.

Marek Noetzel: I would like to pause a bit here to tell you a bit why Spain, why now, and why not three years ago. Given the size of balance sheet of NEPI and given our ambitions to grow, CEE started to become a bit too little a growth story for us. It is like climbing a mountain, almost. Beginnings are always easy and you go fast, very quick, but the higher you get, the more difficult it is. The air becomes thinner, and each step is becoming a bit harder. The same in real estate world. For us to match the ambition of the group and to deliver the results that we are there to deliver, we need more properties, but the provision of those which we like is getting less and less available for us.

Speaker #1: It is like climbing a mountain, almost. Beginnings are always easy, and you go fast, very quickly. But the higher you get, the more difficult it is—the air becomes thinner—and each step becomes a bit harder.

Speaker #1: It's the same in the real estate world. For us, to match the ambition of the group and to deliver the results that we are there to deliver, we need more properties, but the provision of those which we like is getting less and less available for us.

Speaker #1: What I want to say by that is, there is a list of properties we would very much like to add to the portfolio, but, as in life, you need two to tango, right?

Marek Noetzel: What I want to say by that is there is a list of properties we very much like to add to portfolio, but as in life, you need two to tango, right. We are happy buyers, but unfortunately, those opportunities do not come as often as we would want to. We believe the growth potential is there, but not similar to what we have been historically proving. We asked ourselves questions, okay, what do we do next. Do we stay in CEE and go beyond retail, or do we stay with retail but go beyond CEE. Going beyond retail would mean for the group to consider offices, maybe warehousing or data centers. We said, what is so unique about retail.

Speaker #1: We are happy buyers, but unfortunately, those opportunities do not come as often as you would want them to, and we believe the growth potential is there, but not similar to what we have been historically proving.

Speaker #1: And then we asked ourselves questions: Okay, what do we do next? Do we stay in CE and go beyond retail, or do we stay with retail but go beyond CE?

Speaker #1: Going beyond retail would mean for the group to consider offices, maybe warehousing or data centers. But then we said, what is so unique about retail?

Speaker #1: Well, what we love so much and what makes retail different from any other asset classes is the fact that we build relationships with our tenants, and we can move them across the border because tenants like us—not just because we are nice, but also because they are making turnovers in our shopping centers.

Marek Noetzel: Well, what we love so much and what it makes retail different from any other asset classes is the fact that we build relation with our tenants, and we can move them across the border because tenants like us, because we are nice, but as well, they are making turnovers in our shopping centers. They are there for profit. Try removing Zara from Bonarka to neighboring shopping center. That is not going to happen. Try moving office tenants in downtown Warsaw with so much development coming in pipeline. We do control this very last mile of operation of our tenants, and that is the most important difference to any asset classes, and we believe we are good at that.

Speaker #1: They are there for profit. Try removing Zara from Bonarka to a neighboring shopping center—that's not going to happen. But try moving office tenants in downtown Warsaw, with so much development coming in the pipeline.

Speaker #1: We do control this very last mile of operation for our tenants, and that is the most important difference compared to any other asset classes, and we believe we are good at that.

Speaker #1: Therefore, we said, let's go out of our comfort zone and see what Europe has to offer. Let me give you a high-level overview of our thinking regarding Europe and why we ended up with Spain kind of matching our investment criteria.

Marek Noetzel: Therefore, we said, "Let us go out of our comfort zone, and let us see what Europe has to offer." Let me give you a high-level overview of our thinking of Europe and why we landed up with Spain kind of matching our investment criteria. Let us look at north of Europe. Let us look at Scandinavia, where there are fewer opportunities, the pricing is much more competitive, and scaling up is quite difficult given the size of the market and opportunities there, plus quite bureaucratic market. So we said, "Not really us." We looked at France, Germany combined, where the growth is very limited. I am talking about GDP, of which function is success of portfolio management.

Speaker #1: Let's look at the north of Europe. Let's look at Scandinavia, where there are fewer opportunities. The pricing is much more competitive, and scaling up is quite difficult given the size of the market and the opportunities there.

Speaker #1: Plus, quite bureaucratic markets. So we said, not really us. Then we looked at France, Germany combined, where the growth is very limited. I'm talking about GDP, of which the function is the success of portfolio management.

Speaker #1: Add to that a very bureaucratic market—maybe even over-regulated in some cases—where the relationship between landlord and tenants is very much regulated by law, which limits our ability to manage properties with the same level of active management as we used to.

Marek Noetzel: Add to that, the very bureaucratic market, maybe over-regulated, even in some cases where the relation between landlord and the tenants are very much regulated by law, which enables us to manage properties to the extent, active management the way we used to. We said, "Okay, let us not get into that problem because the returns offered for the risk we would have to take really does not justify the case." We looked a bit in UK, non-EU country to start with. Yes, yields are higher, over 7%, but at the same time, the interest rates are higher. There is still existing the whole rent reversion business. It is not very much OCRs driven like in Continental Europe. Therefore, for us going there to have this hurdle of adjusting our model to more British made really made no sense. We took flight south.

Speaker #1: And we said, okay, let's not get into that problem, because the returns offered for the risk we would have to take really do not justify the case.

Speaker #1: Then we looked a bit in the UK, a non-EU country to start with. Yes, yields are higher—over 7%—but at the same time, the interest rates are higher.

Speaker #1: There still exists the whole rent reversion business. It's not very much OCRs-driven like in continental Europe. Therefore, for us going there, to have this hurdle of adjusting our model to be more British-made really makes no sense.

Speaker #1: Then we took flight south. We zoomed in on Iberia, which is double the size of the economy of Poland, which already is $1 trillion.

Marek Noetzel: We zoomed in on Iberia, which is double the size of economy of Poland, which already is EUR 1 trillion. So that is a huge market which offers a lot of opportunities. But at the same time, the yields are where they are, and still, we believe we can expand at accretive yields in the market, and we can scale up the business to be between maybe EUR 1 to 2 billion in few years' time. So we said, "If all those investment criteria are there, why do not we zoom in Spain?" Maybe Italy will follow, maybe Greece, I do not know, but what I wanted to say, out of all those retail proposals, South Europe seems to be most competitive on a relative basis in Western Europe. Now if we translate that into numbers, you are used to us showing you how GDP in CEE is faster.

Speaker #1: So that's a huge market, which offers a lot of opportunities. But at the same time, the yields are where they are, and still we believe we can expand and at an accretive yield.

Speaker #1: In the market, we can scale up the business to be between maybe €1 to €2 billion in a few years' time. So we said, if all those investment criteria are there, why don't we zoom in on Spain?

Speaker #1: Maybe Italy will follow, maybe Greece—I don't know. But what I wanted to say is that out of all those retail proposals, Southern Europe seems to be the most competitive.

Speaker #1: On a relative basis in Western Europe. And now, if we translate that into numbers, you are used to us showing you how GDP in CE is faster.

Speaker #1: I mean, look at that. It's almost double each year—double the pace of the average for the Euro area. It's doubling in 2026, double the pace in 2027 annual growth in purchasing power.

Marek Noetzel: I mean, look at that. It is almost double each year, double the pace of average for Euro area. It is doubling in 2026, double the pace 2027, annual growth in purchasing power, all the very solid numbers. We are used to that in the past, that will be in the future. At the same time, when you zoom in Spain, this is a very solid case. The growth there is fueled by many factors, but just European funds that will be proposed to Spain are around EUR 90 billion. This will have an effect. We see that effect in CEE. Spain is very efficient in spending those funds, and we want to be part of what we hope is to be the growth story of the whole Iberia. It does not exclude NEPI investing in CEE. Of course, we are interested.

Speaker #1: All the very solid numbers we are used to from the past will be there in the future. But at the same time, when you zoom in on Spain, this is a very solid case.

Speaker #1: The growth there is fueled by many factors, but just the European funds that will be proposed to Spain are around €90 billion. This will have an effect.

Speaker #1: We see that effect in CE. Spain is very efficient in spending those funds, and we want to be part of what we hope is the growth story of the whole Iberia.

Speaker #1: It does not exclude NEPI investing in CE, of course. We are interested. We are big believers that there are more opportunities to come, as I discussed with somebody—when NEPI buys a quarter of a billion euro worth of assets, in your earnings it’s hardly visible.

Marek Noetzel: We are big believers that there are more opportunities to come, but as I discussed with somebody on NEPI buys quarter billion euro worth of assets, and in your earnings, it is hardly visible. We need to do more. We have bigger appetite, and most importantly, we have a big balance sheet to support that growth. Hence, Spain seems to be a very credible area for growth for NEPI. Let me look at that again. What we always say, we have four pillars of growth. I know there will be questions about strategy, I am sure. This has not changed, and that will not change. There are four well-equipped with funding pillars of the growth. First and foremost, we always very much are focused on delivering value out of existing portfolio. This is where Marius and Justyna every day are working to make the properties being more efficient.

Speaker #1: I mean, we need to do more. We have a bigger appetite and, most importantly, we have a big balance sheet to support that growth. Hence, Spain seems to be a very credible area for growth for NEPI.

Speaker #1: And let me look at that again. What we always say: we have four pillars of growth. I know there will be questions about strategy, I'm sure.

Speaker #1: And this hasn't changed, and that won't change. There are four well-equipped, with funding, pillars of the growth. First and foremost, we always very much are focused on delivering value out of the existing portfolio.

Speaker #1: This is where Marius and Justyna every day are working to make the properties more efficient. And they did a great job, with NOI growth of 3.8%, which was supported by tenants' like-for-like sales of 2.7%.

Marek Noetzel: They did a great job with NOI growth 3.8%, which was supported by tenants like-for-like sales of 2.7%. I think you need to look at those numbers in a relative term and take a bit historical view. It is another half year presentation where NOI increase outpaces inflation. This was the story of the past, but that will continue in the future, looking how the performance of our tenants was for the H1 of the year, of which Marius will tell you more. I am super proud that we did manage to, again, beat the benchmark of indexation. Strategic development, this is what is like putting the seed today to see the results in a few years. As much as 8% of new GLA is being under construction or permitting as we speak. This is the effort you do not see today.

Speaker #1: I think you need to look at those numbers in relative terms and take a bit of a historical view. It is another half-year presentation where NOI increase outpaces inflation.

Speaker #1: This was continuous—that was the story of the past, but that will continue in the future. Looking at how the performance of our tenants was for the first half of the year—of which Marius will tell you more—but I'm super proud that we did manage to again beat the benchmark of indexation.

Speaker #1: Strategic development—this is like planting the seed today to see the results in a few years. As much as 8% of new GLA is currently under construction or permitting as we speak.

Speaker #1: This is the effort you don't see today. It keeps us very busy in the back of house, but you will see that very soon, and I will speak a bit more about new development shortly.

Marek Noetzel: It keeps us very busy in the back of house, but you will see that very soon, and I will speak a bit more about new development soon. It accounts to around EUR 800 million worth of pipeline to be delivered until 2028. We are quite a busy investor, I dare to say. All of those investments add accretive yield to our earnings because I know the questions will be asked about the yields on development. So there we are. M&As, obviously, this is a very important engine for us. Unfortunately, it is very difficult to model M&A because those opportunities come and go, and you may see years like last four, where NEPI invested over EUR 1 billion, but I would not be surprised if for a few years we do not transact for whatever reason. There is nothing wrong with that.

Speaker #1: It accounts to around €800 million worth of pipeline to be delivered until 2028. We are quite a busy investor idea there, to say.

Speaker #1: All of those investments are at a creative yield to our earnings, because I know the questions will be asked about the yields on development.

Speaker #1: So, there we are. M&As—obviously this is a very important engine for us. Unfortunately, it is very difficult to model M&A, because those opportunities come and go, and you may see years like the last four where NEPI invested over €1 billion, but I wouldn’t be surprised if, for a few years, we don’t transact for whatever reason.

Speaker #1: And there's nothing wrong with that. Sometimes the best deals are those where you mislead somebody else in the transaction for a good reason, but when they happen, they do matter a lot. And I'm proud to report that Anka and her team did manage to sign their first acquisition in Spain.

Marek Noetzel: Sometimes the best deals are those that you misled somebody else the transaction for good reason. When they happen, they do matter a lot, and I am proud to report that Anca and her team did manage to sign a first acquisition in Spain. I will speak more about, we have separate session on MegaPark and on Bilbao case with the initial yield of 6.8%, but we have plan by which very soon this yield will get way over 7%, and 6.8% is already accretive to our earnings. I believe this project being the first step, is a good one, and the next will follow. Last but not least, new business streams, and that is renewable energy.

Speaker #1: I will speak more about this. We have a separate session on Megapark and on the Bilbao case. The initial yield is 6.8%, but we have a plan by which, very soon, this yield will get well over 7%. And 6.8% is already accretive to our earnings.

Speaker #1: So, I believe this project, being the first step, is a good one, and the next will follow. And, last but not least, new business streams—and that is renewable energy.

Speaker #1: In nominal terms, it may seem low to deliver 5.7 million euros for the first half of the year, but the growth Marius will tell you more is quite amazing, and that will continue to be the case as there is over 200 megawatts under the development while 100 is already commissioned, and I will get you some more details or of our energy strategy soon in the presentation as well.

Marek Noetzel: In nominal terms, it may seem low to deliver EUR 5.7 million for the H1 of the year, but the growth, Marius will tell you more, is quite amazing, and that will continue to be the case as there is over 200 megawatts under the development, while 100 is already commissioned. I will get you some more details of our energy strategy soon in the presentation as well. None of those engines would be able to run fast if it was not for Eliza, who is always prudently managing our balance sheet. It is very important to keep LTV low. All the problems of any property company start with too much gearing.

Speaker #1: None of those engines would be able to run fast if it wasn't for Eliza, who is always prudently managing our balance sheet, and it is very important to keep LTV low.

Speaker #1: I mean, all the problems of any property company start with too much gearing. This is one of the most important metrics we look at every half year, which is LTV, and I'm happy to say this is as low as 33%, because that gives us a strong foundation for further growth.

Marek Noetzel: This is one of the most important metrics we look every half year, which is LTV, and I am happy to say this is as low as 33% because that gives us a strong foundation for further growth. The fair valuation gain, Eliza will touch more, but I want to say that 126 uplift comes purely from NOI growth, which is a result of operations of everyday effort of every NEPI Rockcastle employee. The net initial yield stayed quite flat. Put it differently, should I get reported that we have fair valuation gain, which comes purely for cap rates decrease, but NOI is flat, I would not be that happy. No, because we do control NOIs, but we do not control the yields. This is the market. I think this is 126, put in that context, sounds much better to me.

Speaker #1: The fair valuation gain, Eliza will touch on more, but I want to say that the 126 uplift comes purely from NOI growth, which is the result of operations and the everyday effort of every NEPI Rockcastle employee. The net initial yield stayed quite flat.

Speaker #1: So, to put it differently, should I get reported that we have a fair valuation gain which comes purely from cap rates decreasing, but NOI is flat, I wouldn't be that happy. No, because we do control NOIs, but we don't control the yields.

Speaker #1: This is the market. So, I think this is 126. Put in that context, it sounds much better to me. And those results, as you can see, wouldn't be possible if our tenants were not trading well with us.

Marek Noetzel: Those results, as you can see, would not be possible if our tenants were not trading well with us. To start with, we are happy to report 3.5% DPS growth compared to the H1 of 2025 to 32.14 euro cents. NOI grew to EUR 318 million, which is almost 4% up, while turnovers are at record high level, almost EUR 3,000 per square meter. It was not that long time ago where we were about 2,300. It is really growing nicely, and we believe that will continue to be the case. The strong tenants performance translates, obviously, into collection rate. I know it is boring. We always show 99 point whatever, and we will keep you bored because this is the number we aim to get at each reporting period. EPRA vacancy, 98.2%. You might see it is peaked a bit. This is seasonal.

Speaker #1: To start with, we are happy to report 3.5% DPS growth compared to the first half of 2025, to 32.14 euro cents. NOI grew to €1,318 million, which is almost 4% up, while turnovers are at a record high level, almost €3,000 per square meter.

Speaker #1: It wasn't that long ago when we were at about 2,300. It is really growing nicely, and we believe that will continue to be the case.

Speaker #1: The strong tenants' performance translates, obviously, into collection rate. I know it's boring. We always show 99.whatever, and we will keep you bored because this is the number we aim to get at each reporting period.

Speaker #1: EPRA vacancy is 98.2%. You might see it's peaked a bit; this is seasonal. No pressure to Marius and Justyna, but I do see the pipeline of leasing that will take the EPRA occupancy ratio to well over 99%.

Marek Noetzel: No pressure to Marius and Justyna, but I do see the pipeline of leasing that will take EPRA occupancy ratio to way over 99%. All that combined with OCR at very stable level over historical periods, 13.2%, gives us ammunition to talk to our tenants and continuously increase Base Rent way above indexation. Marius will tell you more details about what we did manage to achieve in terms of rental reversion for the H1 of the year. With that being said, I would like to ask Marius to the stage. Important notice, this is his first appearance, and I am sure he will do great. But Marius, welcome to the stage. This is your first time. Enjoy it, man.

Speaker #1: All that, combined with OCR at a very stable level over historical periods—13.2%—gives us ammunition to talk to our tenants and continuously increase base rentals way above indexation. Marius will tell you more details about what we did manage to achieve in terms of rental reversion for the first half of the year.

Speaker #1: With that being said, I would like to ask Marius to the stage. An important notice: this is his first appearance, and I'm sure he will do great. Marius, welcome to the stage.

Speaker #1: This is your first time. Enjoy it, man.

Speaker #2: Thank you, everyone. Yeah, nice to see all of you from up here. So, most of you know me, but just for the sake of the presentation, I'm Marius.

Marius Barbu: Thank you, man. Yeah. Nice to see all of you from up here. Most of you know me, but, just for the sake of the presentation, I am Marius. I am the new COO of NEPI Rockcastle from 1 April. As you know, I have been behind these figures for a while. It is my pleasure to unpack and present to you the operational results for the first 6 months of 2026. If there is something for you to remember from my presentation, it is two things. We leverage the market, and we are trying to keep our agility to capture the consumer trends. This is our focus. Going further, Marek told you already the 3.8% NOI growth. That is a very strong increase.

Speaker #2: I'm the new CEO of NEPI Rockcastle as of the 1st of April. But as you know, I've been behind these figures for a while. So it's my pleasure to unpack and present to you the operating results for the first six months of 2026.

Speaker #2: And if there is something for you to, you know, remember from my presentation, it's two things: we leverage the market, and we are trying to keep our agility to capture the consumer trends.

Speaker #2: So this is our focus. So, going further, Marek already told you about the 3.8% NOI growth. That's a very strong increase—a very strong increase—and it's made up of a 3.3% increase in our asset base. That's being done in a very fluid macroeconomic and political environment, as you know.

Marius Barbu: It is a very strong increase, and it is made up of 3.3% increase of our asset base, and that is being done in a very fluid macroeconomic and political environment, as you know, in which our assets manage to outperform every market where they operate in sales and NOI growth. This gives us the hope and the credibility to grow and enter in new markets. How we did that? Simple. We have a strong asset base, flagship assets, dominant assets in their catchments in which we continuously invest and upgrade. It is not a very complicated secret sauce, but this is our secret sauce. Flagship assets, keep upgrading them. Now, if we look at the countries, our engine of growth for the first 6 months was Poland. Very stable economical environment, very good performance of our flagship assets. This creates a very good story. Then we have Romania.

Speaker #2: In which our assets manage to outperform every market where they operate, in sales and NOI growth. So this gives us the hope and the credibility to grow and enter into new markets.

Speaker #2: How did we do that? Simple. We have a strong asset base—flagship assets and nominal assets in their catchments—in which we continuously invest and upgrade.

Speaker #2: It's not a very complicated secret sauce, but this is our secret sauce: flagship assets—keep upgrading them. Now, if we look at the countries, our engine of growth for the first six months was Poland.

Speaker #2: Very stable economic environment, very good performance over our flagship assets. This creates a very good story. Then we have Romania. Romania's growth was a bit tempered by the economic environment in which we are there.

Marius Barbu: Romania's growth was a bit tempered by the economical environment in which we are there. After years of consistent and very strong growth, we have this year a bit of a cool down, I would say. But we are ready to capture the next growth cycle that we hope will be next year. Romania contributed to 1.7% to the NOI increase. While the other countries that you see here, especially Bulgaria and Croatia, were pushed by our continuous investments on our flagship assets. These assets there were continuously upgraded, and you see the results. In a nutshell, our large footprint in CEE, and not only since couple of months ago, helps us capture the momentum in any of our countries of operations and protects us from any single slowdowns that we have. This puts us in a very stable and solid position to go forward.

Speaker #2: After years of consistent and very strong growth, we have this year a bit of a cool-down, I would say. But we are ready to capture the next growth cycle, which we hope will be next year.

Speaker #2: So, Romania contributed 1.7% to the NOI increase, while the other countries that you see here — especially Bulgaria and Croatia — were pushed by our continuous investments in flagship assets.

Speaker #2: So, these assets were continuously upgraded, and you see the results. So, in a nutshell, our large footprint in CEE—and not only, since a couple of months ago—helps us capture the momentum in any of our countries of operations and protects us from any single slowdowns that we have.

Speaker #2: So, this puts us in a very, very stable and solid position to go forward. The second contributor to this NOI growth is the energy growth.

Marius Barbu: The second contributor to this NOI growth is the energy growth. Marek mentioned a bit. It's accelerated its growth. Now it's 37%, almost 38%. It's on the back of the extension of the rooftop PV plants. We continue the rollout of installing rooftop PV plants on our shopping centers. We will be done with this end of this year, middle of next year. And the start of operation of our first offsite PV plant in Romania, 54 megawatts, our installed capacity that started in the beginning of June. In Chișineu-Criș, very strange name, but this is somewhere in Romania. And we are looking forward to start our second one towards the end of the year. All this brought this big increase and helps our operations day to day with providing the energy.

Speaker #2: Marek mentioned a bit—it's accelerated his growth. Now it's 37%, almost 38%. It's on the back of the extension of the rooftop PV plants.

Speaker #2: So, we continue the rollout of installing rooftop PV plants on our shopping centers. We'll be done with this by the end of this year or the middle of next year.

Speaker #2: And the start of operation of our first offsite PV plant in Romania, with 54 megawatts of installed capacity, which started at the beginning of June.

Speaker #2: In Chișinău, Criș—very strange name—but this is somewhere in Romania. And we are looking forward to starting our second one towards the end of the year.

Speaker #2: So all this brought this big increase and helps our operations day to day, with the aid providing the energy. So, all in all, this—the asset base and the energy—puts us in the position to report 3.8% NOI growth.

Marius Barbu: All in all, the asset base and the energy put us in the position to report 3.8% of the NOI growth. Going forward, I want to unpack a bit what drives our growth and how it's the top-line growth, and then how our costs are evolving. The top-line growth is driven by, first and foremost, tenant sales. We had a strong H1, six months, 2.7% in average, but that means that our sales in each of geographies were above the market trends and the retail sales in those geographies. We outperformed every geography, every catchment that we operate in. These higher tenant sales, which are above the indexation, coupled with a very stable and solid footfall, made out a very good conversion and increased sales per visit. This higher basket of 3.3%. This helps us to extract more value from our visits.

Speaker #2: Going forward, I want to unpack a bit how what drives our growth. And now it's the top line growth. And then how our costs are going our evolving.

Speaker #2: The top line growth is driven by first and foremost tenant sales. We have a strong we had a strong H1, six months, 2.7% in average.

Speaker #2: But that means that our sales in each of the geographies were above the market trends and the retail sales in those geographies. So we outperformed in every geography, every catchment that we operate in.

Speaker #2: These higher tenant sales, which are above the indexation, coupled with a very stable and solid footfall, resulted in a very good conversion and increased sales per visit.

Speaker #2: This higher basket of 3.3% helps us to extract more value from our visits. This puts us in a position where we extract more value from our visitors.

Marius Barbu: This puts us in a position that we extract more value from our visitors. With this going forward, this allowed us more headroom to improve our Base Rent. And we communicate all the time, this base rental uplift that for H1 was 3%. It's above the indexation of 2%, and if you exclude even incentives, it's almost 4% above the indexation. Very strong. This headroom allows us to make a good reversion of the lease agreements. And this cycle, it's something that we always look at. Sales, conversion, uplifts. Just to unpack a bit then going forward, how we achieve this base rental uplift going forward. It's easier to say BRU. So how we achieve this BRU going forward. In H1, we had the opportunity to release and renew 7% of our GLA. I say it's an opportunity because this is where we make our agility, our adaptiveness in action.

Speaker #2: With this going forward, this allowed us more headroom to improve our base render. And we communicated that this base render last lift for H1 was 3%.

Speaker #2: It's above the indexation of 2%. And if you exclude even incentives, it's almost 4% above the indexation. Very strong—gives us this headroom, allows us to make a good reversion of the disagreements.

Speaker #2: And this cycle is something that we always look at—sales conversion uplifts. Just to unpack a bit, then, going forward, how we achieved this base rental uplift.

Speaker #2: It's easier to say BRU. So, how we achieved this BRU going forward: in H1, we had the opportunity to release and renew 7% of our GLA.

Speaker #2: I say it's an opportunity because this is where we make our agility, our adaptiveness, visible in action. This is how we allocate and decide which tenant we extend, which concept we support, and which tenant we change.

Marius Barbu: This is how we allocate and we decide which tenant we extend, which concept we support, and which tenant we change. And together with Justyna's team, we managed to sign 160,000 GLA of leases in H1. That's a big number. It's 7% of our GLA, but that's a big number. These are two flagship assets the size of Paradise City of Mega Mall, leased and renewed in only six months. Where we directed our efforts is to renew, as I said, our successful concepts. So we are looking at the data to see how they are performing and what are their plans, and 61% of these leases were directed at prolonging the existing successful concepts, and 39%, let's call it 40%, was directed at new tenants. So we brought new tenants in 40% of the GLA. Which helps us to keep up with the consumer trends. This is our strategy.

Speaker #2: And together with Iustina's team, we managed to sign 160,000 GLA of leases in H1. I mean, that's a big number. It's 7% of our GLA, but that's a big number.

Speaker #2: These are two flagship assets, the size of Paradise City or Megamall, released and renewed in only six months. Where we directed our efforts is to renew, as I said, our successful concept.

Speaker #2: So we are looking at the data to see how they are performing and what their plans are. And 61% of these leases were directed at prolonging the existing successful concepts.

Speaker #2: And 39%—let’s call it 40%—was directed at new tenants. So, we brought new tenants on in 40% of the GLA, which helps us to keep up with the consumer trends.

Speaker #2: This is where we this is our this is our strategy. This is how we want to keep up with the markets. And it's very important to keep this in mind.

Marius Barbu: This is how we want to keep up with the markets. It is very important to keep this in mind. These changes in tenants and renewals made us have an increase in turnovers. This 2.7% above the indexation has, and I want to show you what it is made of based on the retail segments. We have a strong increase in fashion, which represents 41% of our sales, of 1.6%, and then the key growing segments, health and beauty, I would mention, fashion complement, service. These are where consumers want to spend their money in our shopping centers. You see also three segments that are decreasing, but there is something to unpack here. These total segments, these total sales are made out of sales per square meter plus the GLA, the square meters that are allocated to these segments. We control basically the GLA, where we allocate our segments.

Speaker #2: So, these changes in tenants and renewals led to an increase in turnovers. This 2.7% above the indexation has— and I want to show you what it is made of based on the retail segments.

Speaker #2: We have a strong increase in fashion, which represents 41% of our sales, with an increase of 1.6%. Then, the key growing segments are health and beauty—I would also mention fashion accessories and services. These are the areas where consumers want to spend their money in our shopping centers.

Speaker #2: You see also three segments that are decreasing. But there is something to unpack here. This total—these total sales are made up of sales per square meter plus the GLA, the square meters that are allocated to the segments.

Speaker #2: We control, basically, the GLA—where we allocate our segments. So, when we do releasing and renewing, it's important to see which GLA is allocated to which segment.

Marius Barbu: When we do releasing and renewing, it is important to see which GLA allocate to which segment in such a way that we maintain our growth. Behind the decrease, for example, in electronics and DIY, it is only the GLA change from one period to another. We decided to reduce the GLA allocated to these two segments and allocate it to health and beauty and fashion complements because these are the growing categories. Although the sales per square meter of these two segments is not decreasing, it shows up at total sales like that. This is where we focus and try to extract more value from our tenants and protect our long-term results. It is very important to keep in mind that we are always looking and adapting our tenant mix to what they want. Of course, electronics and DIY will not disappear. We do not plan to do that.

Speaker #2: In such a way that we maintain our growth. So, behind the decrease, for example, in electronics and DIY, it’s only the GLA change from one period to another.

Speaker #2: We decided to reduce the GLA allocated to these two segments and allocate it to health and beauty and fashion complements because these are the growing categories.

Speaker #2: So, although the sales per square meter of these two segments is not decreasing, it shows up in total sales like that. This is where we focus and try to extract more value from our tenants.

Speaker #2: And protect our long-term results. So, it's very important to keep in mind that we are always looking at and adapting our tenant mix to what they want.

Speaker #2: Of course, electronics and DIY will not disappear. We don't plan to do that. What we are trying to change is the big boxes that sell price-driven products.

Marius Barbu: What we try to change is the big boxes that sell price-driven products. It is better for them maybe to work in retail parks or in other retail schemes than in our dominant assets. We prefer to move to the categories that are more consumer experience driven. Health and beauty, leisure, services. One thing to mention, for example, is entertainment. This entertainment, it is very important for us because it shows how people behave in our shopping centers, and it is very important because this is driven by the cinemas. The cinemas were, as you know, long history of being under pressure because of the Netflix and online streaming channels, but they reinvented themselves, and they show growth now. This is showing to be happening also for the next quarters and years.

Speaker #2: It's better for them, maybe, to work in retail parts or in other retail schemes than in our dominant assets. And we prefer to move to the categories that are more consumer-experience driven.

Speaker #2: Health and beauty, leisure, services—one thing to mention, for example, is entertainment. It is entertainment. It's very important for us because it shows how people behave in our shopping centers.

Speaker #2: And it's very important because this is driven by the cinemas. The cinemas have, as you know, a long history of being under pressure because of Netflix and online streaming channels.

Speaker #2: But they reinvented themselves, and they show growth now. And this is showing to be happening also for the next quarters and years. So, in a nutshell, this is how our tenants have performed.

Marius Barbu: In a nutshell, this is how our tenants have performed based on the segments. I will show you how we did it in action, and I will give you some examples just to picture what we have done with the segments. We opened in the first six months our fashion key anchors, like HalfPrice, Mango, and others, but these are the two ones here. Plus, we invested in new health and beauty chains, so we have Rituals and Kiehl's, just two very cool and trendy brands in this segment. We are expanding fashion tenants that are performing well in our geographies. For example, Medicine, it is a very successful fashion brand from Poland that we are expanding and extending throughout our portfolio. Going forward, we still have a strong pipeline of sign leases, and they will turn out into successful openings in the next quarters.

Speaker #2: Based on the segments, I will show you how we did it in action, and I'll give you some examples just to picture what we've done with the segments.

Speaker #2: We opened in the first six months our fashion key anchors, like Half Price, Mango, and others. But these are the two ones here. Plus, we invested in new health and beauty chains.

Speaker #2: So we have Rituals and Kiko Systems, two very cool and trendy brands in this segment. And we are expanding fashion tenants that are performing well in our one-hour geographies—for example, Medicine.

Speaker #2: It's a very successful fashion brand from Poland that we are expanding and extending throughout our portfolio. Then, going forward, we still have a strong pipeline of signed leases.

Speaker #2: And they will turn out into successful openings in the next quarters. And also, we focused on the main fashion anchors—half price, Primark—but also on bringing new tenants in the growing categories of health and beauty.

Marius Barbu: Also, we focused on the main fashion anchors, HalfPrice, Primark, but also to bring new tenants in the growing categories of health and beauty. I want to mention here Normal, a very cool new chain, first opening with us. It's almost uncommon there is a new tenant in CEE that is not first with us. Usually, all of them, they are opening with us, first market entry, and then they move into the other operators, Normal being one example. Also, we focus and we sign a very big lease for a gym, almost 4,000 square meters with World Class. I hope for those of you that will come in our investor tour next year, you'll have the pleasure to see it in the Promenada extension.

Speaker #2: And I want to mention here Normal, a very cool new chain. First opening with us. It's almost uncommon for there to be a new tenant in CE that is not first with us.

Speaker #2: So usually, all of them are opening with us. First, market entry, and then they move into the other operators—Normal being one example.

Speaker #2: Also, we focus and we signed a very big lease for a gym, almost 4,000 square meters, with an OR-class. And I hope, for those of you that will come, in our investor tour next year, you’ll be able to—you’ll have the pleasure to see it in the Promenada extension.

Speaker #2: They will have a swimming pool, all kinds of new therapies, a spa, and whatever things—I don't even know what most of them mean.

Marius Barbu: They will have swimming pool, all kinds of new therapies, spa, whatever, things that I don't even know what it means, most of them, but apparently, they really work. This continuous stream of new signings and openings brings us, as Mike was saying, to a very, very low EPRA vacancy. Consumer demand and agility in execution. This is how we maintain this very low vacancy. Of course, this is a bit higher than H2 2025, and it's very important to know why is that? Because it's a normal seasonal and organic change of this vacancy, as all the changes, or the majority of the changes in tenants, happen between Easter and beginning of autumn. This is the moment when we try to reshuffle most of our tenants, because it's more quiet and they want to get prepared for the high season in H2.

Speaker #2: But apparently, they really work. So, this continuous stream of new signings will bring us to openings—bring us, as Margo said, to a very, very low EPRA vacancy.

Speaker #2: Consumer demand and agility in execution—that is how we maintain this very low vacancy. Of course, it is a bit higher than H2 2025, and it's very important to understand why that is.

Speaker #2: Because it's a seasonal it's a normal seasonal and organic modific organic change of this vacancy. As all the changes all the changes or the majority of the changes in tenants happen between Easter and beginning of autumn.

Speaker #2: So, this is the moment when we try to reshuffle most of our tenants, because it's more quiet, and they want to get prepared for the high season in H2.

Speaker #2: So that's why there's an uptick there. But it's the same level as towards the end of the year. Our plan is to go back to around 1% vacancy, maybe even lower than that.

Marius Barbu: That's why it's an uptick there, but the same level as last year. In a way, you'll see that towards the end of the year, our plan is to go back around 1% vacancy, maybe even lower than that. Let's see. Very good operation indicator, high occupancy, driven by our partnership with top tenants. I show you some names, but our top tenants are these ones here. They are all leaders in their markets, in their segments. They all show growth there. With all of them, we are trying to work and to extend their successful concepts. Top 10 tenants make out about 26% of our GRI, and as I said, we are working with them to extend their concepts. To give some examples, with LPP, we are busy extending Sinsay concept, very successful. With Inditex, we are refocusing their GLA mostly to Zara flagship stores.

Speaker #2: Let's see. So, very good—very good operation indicator. High occupancy, driven by our partnership with top tenants. I'll show you some names, but our top tenants are these ones here.

Speaker #2: They are all leaders in their markets, in their segments. They all show growth there. And with all of them, we are trying to work and to extend their successful concepts.

Speaker #2: Top ten tenants make up about 26% of our GRI. And as I said, we are working with them to extend their concepts. To give some examples—

Speaker #2: We tell PP we are busy extending the Sinsay concept, which has been very successful with Inditex. We are refocusing their GLA mostly to Zara flagship stores. This is the concept that is really, really working.

Marius Barbu: This is the concept that is really, really working. Plus, now Zara Home, very, very good. With CCC, we are busy extending HalfPrice. You've seen it on the previous slides, and so on and so forth. These are the top tenants, very solid, very indicating that we don't have any problems, and we have a very solid base of tenants. Worth mentioning is this 1.8% that was at the end of June. This was still to be released. Very low percentage. In the meantime, it's even lower. That indicates the fact that we have high certainty of delivering the results this year in the next months. Okay. Going forward, everything that we discussed relies on these efficient operations. On the efficient operations.

Speaker #2: Plus now, Zara Home—very, very good. With CCC, we are busy extending Half Price. You've seen it on the previous slides, and so on and so forth.

Speaker #2: So these are the top tenants. Very solid, very much indicating that we don't have any problems, and we have a very solid base of customers, of tenants.

Speaker #2: We're mentioning this 1.8% that was at the end of June. This was still to be released—a very low percentage. In the meantime, it's even lower.

Speaker #2: That indicates the fact that we have high certainty of delivering the results this year and in the next ones. Okay. Going forward, everything that we discussed relies on these efficient operations.

Speaker #2: On the efficient operations, we managed to keep OCR—a very important indicator that shows how much of our tenant sales are given to the operational cost, the occupying cost in our shopping centers.

Marius Barbu: We managed to keep OCR, a very important indicator that shows how much of our tenant sales are given to the operational cost, the occupying cost in our shopping centers. We managed to keep it at a very stable level of 13.2%, which is really well below, let's say, our self-imposed 15% that we think is still healthy and gives us the potential of future reversals or revisions higher of the Base Rents. This good costs management was driven mainly by the hedging of our suppliers. We tried as much as possible to fix our costs for a longer period of time or scale, because this gives us leverage in the negotiations with our suppliers and in gradual implementation of new technologies, automations, digitalization. This helps us to reduce the labor-intensive costs.

Speaker #2: And we managed to keep it at a very stable level of 13.2%, which is really well below, let's say, our self-imposed 15% that we think is still healthy.

Speaker #2: And it gives us the potential for future reversal or revisions, higher of the base rents. This good cost management was driven mainly by the hedging of our suppliers. We tried, as much as possible, to fix our costs for a longer period of time.

Speaker #2: Our scale gives us leverage in negotiations with our suppliers, as well as in the gradual implementation of new technologies, automations, and digitalization. This helps us reduce labor-intensive costs.

Speaker #2: Keeping a low cost base, plus increasing tenant sales per square meter, helped us to recover 96% of our costs and kept this very high collection rate of 99.2% for H1.

Marius Barbu: Keeping a low-cost base plus increasing the tenant sales per square meter, helped us to recover 96% of our costs and kept this very high collection rate of 99.2% for H1. Everything else, as Mike was saying, it is good, but we need to take the money. This is why we are very focused on collection. This concludes my first CEO presentation. I hope I unpacked and gave you more details about the H1 results of our company. I want to say that I am not alone on this stage. I represent almost 400 people that are working daily in our asset management, leasing, center management, assets throughout the portfolio. I want to, as I said at the beginning, just keep in mind two things. We leverage the potential of the market by increasing the BRIs and the reversals. We focus on the consumer.

Speaker #2: Everything else, as Marek was saying, is good. But we need to take the money. So, this is why we are very focused on collection.

Speaker #2: This concludes my first CEO presentation. I hope I unpacked and gave you more details about the H1 results of our company.

Speaker #2: I want to say that I'm not alone on this stage. I represent almost 400 people who are working daily in our asset management, leasing, center management, and assets throughout the portfolio.

Speaker #2: And I want to, as I said at the beginning, just keep in mind two things. We leverage the potential of the market by increasing the BRUs and the reversals.

Speaker #2: We have we focus on the on the consumer. We try to be you know consumer driven in all the decisions that we do. You know keeping a very low vacancy, bringing new tenants that work.

Marius Barbu: We try to be consumer-driven in all the decisions that we do, keeping a very low vacancy, bringing new tenants that work, and all based on these operations that deliver the cash and keep our assets healthy and working. Thank you, and without further ado, Eliza.

Speaker #2: And all based on these operations that deliver the cash and keep our asset healthy and working. Thank you. And without further ado, Eliza.

Speaker #1: Thank you, Marek. Marius, I'm also emotional. Thank you. So, good morning, everyone. I would also like to start by congratulating once again Marek and Marius for their first investors' presentation in their roles as CEO and COO.

Eliza Predoiu: Thank you, Marek. Marius. I am also emotion. Thank you. Good morning, everyone. I would start also by congratulating once again, Marek and Marius for their first investors presentation in their roles of CEO and COO. Although this makes me be the oldest in my role in this executive team. I used to be the new kid on the block. So be it. I am embracing my oldness here. Those of you that are familiar with the finance presentation, you know that I have one moment of reflection before going to the numbers. I will tell you what meant the first part of the year for us beyond the numbers, for us as company, and for us as team. As also my colleagues were saying, the first part of the year was somehow defined by three words: change, exploration, and ability.

Speaker #1: Although this makes me the oldest in my role on this executive team, I used to be the new kid on the block. But yeah, so be it.

Speaker #1: I'm embracing my oldness here. Those of you who are familiar with the finance presentation know that I have one moment of reflection before going to the numbers.

Speaker #1: And I will tell you what the first part of the year meant. For us, beyond the numbers, for us as a company and for us as a team.

Speaker #1: As my colleagues were also saying, the first part of the year was defined by three words: change, exploration, and ability. Change, because we just transitioned to a new leadership chapter.

Eliza Predoiu: Change because we just transitioned to a new leadership chapter. Exploration because we explored new geographies and we took NEPI Rockcastle beyond the traditional footprint. On the finance side, we made some new partnerships with financial institutions, continuing to further diversify our access to capital. Agility, because the environment in which we are operating is ever-changing and is not becoming simpler. The consumers are changing, the markets are changing, the geopolitical challenges are changing. In this context, we prove to be agile to navigate it and strong to take advantage of it. On this note, my finance presentation was somehow built around four questions. There are two hows and two whats. I will try to unpack how did we build the growth in this first part of the year? What do we return to you as shareholders? How do we fund the business?

Speaker #1: Exploration, because we explored new geographies and took NEPI Rockcastle beyond the traditional footprint. On the finance side, we made some new partnerships with financial institutions, continuing to further diversify our access to capital.

Speaker #1: Agility, because the environment in which we are operating is ever-changing and is not becoming simpler. The consumers are changing, the markets are changing.

Speaker #1: The geopolitical challenges are changing. And in this context, we proved to be agile to navigate it and strong to take advantage of it. And on this note, my finance presentation was somehow built around four questions.

Speaker #1: There are two hows and two whats, so I will try to unpack how we built the growth in this first part of the year.

Speaker #1: What do we return to you as shareholders? How do we fund the business? And what is the growing value of the portfolio? And I allowed myself to have a short introduction here because our while we focus in general on the top figures, which is what we distribute to the investors and what are the distributable earnings, we have an entire ecosystem and the top line does no stand up if the other ones won't stand up.

Eliza Predoiu: What is the growing value of the portfolio? I allow myself to have a short introduction here because while we focus in general on the top figures, which is what we distribute to the investors and what are the distributable earnings, we have an entire ecosystem, and the top line does not stand up if the other ones won't stand up. So bottom line in the foundational layer is a strong balance sheet. We have a very good and prudent loan-to-value at 33%. We have EUR 1.2 billion in liquidity. We are BBB+ rated by both of the rating agencies, Fitch and S&P. S&P took them a bit longer, but finally, they recognized the value in our company. 80% of the debt has the interest rate hedged. So this is the foundational step. Based on that, we have the assets that are working.

Speaker #1: So, bottom line, the foundational layer is a strong balance sheet. We have a very good and prudent loan-to-value of 33%. We have €1.2 billion in liquidity.

Speaker #1: We are triple B plus rated by both of the rating agencies, Fitch and S&P. S&P took them a bit longer, but finally they recognized the value in our company.

Speaker #1: And 80% of the debt has the interest rate hedged. So, this is the foundational step. Based on that, we have the assets that are working.

Speaker #1: There are 60 assets, with vacancy always below 2%. We have a very good collection rate, as Marius was saying, delivering 3.3% NOI growth like-for-like.

Eliza Predoiu: There are 60 assets with a vacancy which has always been below 2%, with very good collection rate, as Marius was saying, delivering 3.3% in NOI growth like for like, and spread across eight geographies. Now we added the ninth one. Then we have the earnings, which are growing, and then we made the distribution. But I will unpack now the distributable earnings per share. So this key number for this year is 32.14, which is a growth of 3.5% relative to the previous year. This number has a few contributors. The first of them and the largest of them, as it should be, is the portfolio out of which we are extracting more value. This comes from indexation, from relating, from management of the vacancy, from the cost recoveries.

Speaker #1: ...and spread across eight geographies. Now we've added the ninth one. Then we have the earnings, which are growing, and we've made the distribution.

Speaker #1: I will now unpack the distributable earnings per share. The key number for this year is 32.14, which represents growth of 3.5% relative to the previous year.

Speaker #1: And this number has a few contributors. The first of them, and the largest of them—as it should be—is the portfolio, out of which we are extracting more value.

Speaker #1: This comes from indexation, from letting, from the vacancy, from management of the vacancy, from the cost recoveries. On top of that, our energy business scaled up.

Eliza Predoiu: On top of that, our energy business scaled up, and I'm very happy to see that now we have EUR 0.22. So it's not only a rounding number, it brings up and it tops up the distributable earnings per share. Then we have also two offsetting elements. One of them is the finance cost, because we renewed maturities and we brought more funds in the business. Yes, in the current context, the money are more expensive. On top of that, we have the administrative and compliance side of the business because we run this business properly. We have a BBB+ rating. We are listed on two stock exchanges. We have a strong governance. For that, we need to incur some costs. I will also remind you that every time when we have some one-off events, we are going to manage them properly.

Speaker #1: And I'm very happy to see that now we have €0.22 cent. So it's not only a rounding number—it brings up and it tops up the distributable earnings per share.

Speaker #1: Then we also have two offsetting elements. One of them is the finance cost, because we renewed maturities and brought more funds into the business.

Speaker #1: And yes, in the current context, money is more expensive. On top of that, we have the administrative and compliance side of the business because we run this business properly.

Speaker #1: We have a triple B plus rating. We are listed on two stock exchanges. We have strong governance, and for that, we need to incur some costs.

Speaker #1: And I will also remind you that every time we have some one-off events, we are going to manage them properly. So, last year, we won a tax litigation, which led us to reversing a historical provision, and we distributed that to you.

Eliza Predoiu: Last year, we won a tax litigation, which led us to reversing a historical provision, and we distributed that to you. This is all in all the way in which we are doing our business. I know that you are preoccupied about taxes, and I am as well. It is normal to be like that. From 2025, we became subject to the Pillar Two Directive, which says that we will need to pay at least 15% out of our profits in each jurisdiction in which we operate. There are jurisdictions which tax rates above this 15%, but there are some others which are below the 15%. When you look at us at NEPI Rockcastle, you are always benchmarking us with peers that are already becoming a REIT.

Speaker #1: So, this is all, in all, the way in which we are doing our business. I know that you are preoccupied about taxes, and I am as well.

Speaker #1: It's normal to be like that. From 2025, we became subject to the Pillar Two directives, which say that we will need to pay at least 15% out of our profits in each jurisdiction in which we operate.

Speaker #1: And there are jurisdictions with tax rates above this 15%, but there are some others which are below the 15%. And when you look at us at NEPI Rockcastle, you are always benchmarking us with peers that are already becoming a REIT.

Speaker #1: And then we realized that while we behave as a REIT, we don't have the same rights and obligations in terms of taxes as a REIT has.

Eliza Predoiu: Then we realize that while we behave as a REIT, we do not have the same rights and obligations in terms of taxes as a REIT has. Being a REIT means to be excluded from Pillar Two Directive. This is one of the reasons for which from 1 January 2027, we are going to apply the REIT regime for our operations. This is going to help us preserve a current tax rate relative to the distributable earnings before taxation in the range of 8% to 10%. This is the actual rate that we are going to show also for this year. Now we are at 7%, but most probably in the second part of the year, it is going to be rather close to 8%. My favorite slide, actually. What do we return to you as shareholders?

Speaker #1: Because being a REIT means being excluded from the Pillar Two Directive. And this is one of the reasons why, from January 1st, 2027, we are going to apply the REIT regime to our operations.

Speaker #1: And this is going to help us preserve a current tax rate, relative to the distributable earnings before taxation, in the range of 8% to 10%, which is the actual rate that we are going to show also for this year.

Speaker #1: Now we are at 7%, but most probably in the second part of the year, it is going to be rather close to 8%. This is my favorite slide, actually.

Speaker #1: What do we return to you as shareholders? The answer is very simple: 90% every year, twice a year. So this time, open the wallet—28.93 eurocents are going to flow into your accounts at the beginning of October.

Eliza Predoiu: The answer is very simple: 90% every year, twice a year. This time, open the wallet, EUR 28.93 cents are going to flow in your accounts at the beginning of October. This 90% payout has been there since the foundation of the company. It has been there during the pandemic, it has been there during the interest cycles and whatnot. It has been there while still continuing to invest in our property, develop our projects, enlarge our energy platform, and having a good loan-to-value ratio. As CFO, I take a particular pride in that. I think it is very important. We are going to settle this dividend in cash as a repayment of capital, which is the default option, not subject to withholding tax, or based on your election, as a dividend out of profits, bearing a 15% withholding tax. How do we fund the business?

Speaker #1: And this 90% payout has been there since the foundation of the company. It has been there during the pandemic, it has been there during the interest rate cycles, and whatnot.

Speaker #1: And it has been there while still continuing to invest in our property, develop our projects, enlarge our energy platform, and maintain a good loan-to-value ratio.

Speaker #1: I, as CFO, take particular pride in that. I think it's very important. And we are going to settle this dividend in cash, as a repayment of capital, which is the default option.

Speaker #1: Not subject to withholding tax, or, based on your election, as a dividend out of profits, bearing a 15% withholding tax. How do we fund the business?

Speaker #1: We always have a plan, and the funding follows that plan. The first six months of the year have been quite intensive because we managed to bring in business close to €550 million.

Eliza Predoiu: We always have a plan, and the funding follows that plan. These first six months of the year have been quite intensive because we managed to bring in the business close to EUR 550 million. While the number is important, I think what is even more important is that we diversify our sources and our pools of capital. This EUR 550 million came from three transactions. One of them, EUR 225 million, it is an unsecured term loan with three financial institutions, ING, Intesa, and SMBC, and we did that at the beginning of the year. Then we topped up a secured loan in Romania, EUR 74 million, Erste and Raiffeisen, regional partners that are believing in our business. Then EUR 250 million unsecured green loan with EBRD, an international financial institution, and this is our first unsecured loan with them.

Speaker #1: And while the number is important, I think what is even more important is that we diversify our sources and our pools of capital. This $550 million came from three transactions.

Speaker #1: One of them, €225 million, is an unsecured term loan with three financial institutions: ING, Intesa, and SMBC. And we did that at the beginning of the year.

Speaker #1: Then we topped up a secured loan in Romania—€74 million—with Ernst and Raiffeisen, regional partners that are believing in our business. Then, €250 million with EBRD, an international finance institution.

Speaker #1: And this is our first unsecured loan with them. Thank you to the finance team for working on this loan throughout the summer holidays. But it's very nice to report on this number.

Eliza Predoiu: Thank you to the finance team for working on this loan throughout the summer holidays, but it is very nice to report on this number. On top of that, we have 250 million down the line, maturing in October, for which obviously we have a plan. We either go for issuing a bond in September or October in the next months, or we are going to use out of our RCF capacity, and then we are going to replenish it. I will remind you, we have EUR 1.2 billion liquidity, out of which EUR 740 million are in revolving credit facilities. I would also like to have a point on the cost of debt, which is still below 4%, is at 3.8%. Speaking also about this maturity in October, to have a strong balance sheet, it is also a matter of having choices.

Speaker #1: On top of that, we have €250 million down the line, maturing in October, for which obviously we have a plan. We will either go for issuing a bond in September or October, in the next months, or we are going to use part of our RCF capacity, and then we are going to replenish it.

Speaker #1: I will remind you, we have €1.2 billion in liquidity, out of which €740 million are in revolving credit facilities. I would also like to touch on the cost of debt.

Speaker #1: Which is still below 4%; it is at 3.8%. And, speaking also about this maturity in October, to have a strong balance sheet, it's also a matter of having choices.

Speaker #1: So, we are not a force issuer in any way. This is one of the reasons why we are so prudent when it comes to gearing and liquidity.

Eliza Predoiu: We are not a forced issuer in any way, and this is one of the reasons for which we are so prudent when it comes about gearing and liquidity. Last but not least, our portfolio, as it was mentioned earlier, reached EUR 8.4 billion. We gained in this H1, EUR 126 million. Looking at how the market behaved in terms of valuation yield, this is flat. December to June, 698. If I am looking backwards to the valuation yield in the last three years, it is in the range of 698 to 7%. The market does not necessarily contribute to the valuation uplift. What contributes is our operations. We own the right assets, we are taking care of them, we operate them, and then we extract the income. This is the controllable part under the hands of management when it comes about valuation.

Speaker #1: Last but not least, our portfolio, as was mentioned earlier, reached €8.4 billion. We gained, in this first half of the year, €126 million.

Speaker #1: Looking at how the market behaved in terms of valuation yield, this is flat. December to June, 6.98%. If I'm looking backwards to the valuation yield in the last three years, it's in the range of 6.98% to 7%.

Speaker #1: So the market does not necessarily contribute to the valuation uplift. What contributes is our operations. We own the right assets and we are taking care of them.

Speaker #1: We operate them, and then we extract the income. This is the controllable part under the hands of management when it comes to valuation.

Speaker #1: And this is something that we are going to continue to do. But keep in mind that we have a pool of gross assets which is over €9 billion.

Eliza Predoiu: This is something that we are going to continue to do. But keep in mind that we have a pool of gross assets, which is over EUR 9 billion. I hope I will be here to report also when we will reach EUR 10 billion. With this in mind, if I am to have tricky messages for you as shareholders and stakeholders, then first we deliver. We have growing operations, growing earnings, and out of that, 90% goes to your pockets. Second, we are ambitious. We are growing our operations, we are exploring new territories, and we have the right access to capital and the right balance sheet. I strongly believe that in finance, we are taking care of this balance sheet to protect us when it is necessary and to enable us when the opportunity arises. Last but not least, we have a long-term view.

Speaker #1: I hope I will be here to report also when we reach 10 billion. And with this in mind, if I am to have tricky messages for you as shareholders and stakeholders, then first, we deliver.

Speaker #1: So, we have growing operations, growing earnings, and out of that, 90% goes to your pockets. Second, we are ambitious. We are growing our operations.

Speaker #1: We are exploring new territories, and we have the right access to capital and the right balance sheet. I strongly believe that in finance, we are taking care of this balance sheet to protect us when it's necessary, and to enable us when the opportunity arises.

Speaker #1: And last but not least, we have a long-term view. We have a team that is focused on delivering value. We have the right quality in the portfolio.

Eliza Predoiu: We have a team that is focused on delivering value, we have the right quality of the portfolio, and we have a prudent financial strategy. With this in mind, I would like to thank you. I will take questions at the end, and I will invite Marek to the floor.

Speaker #1: We have a prudent financial strategy, and with this in mind, I would like to thank you. I will take questions at the end.

Speaker #1: And I will invite Marek to the floor.

Speaker #2: Thank you, Eliza. Congratulations on those numbers—continuously impressive. The way you present each time, you are better; you are just amazing. I really enjoyed it.

Marek Noetzel: Thank you, Eliza. Congratulations on those numbers, and continuously impressive. The way you present, each time you are better, you are just amazing. I really enjoy it. Super good. Thank you. Now let's look a bit to the future, my favorite part, and I will tell you why. What we have reported so far was historical. The results of H1 2026 are results of our efforts many quarters before. That's how it goes. If anybody asks me what keeps me awake at night is, what do we do in 2028, 2029. Let me unpack a bit what we are doing today that will help us to grow a few years from now.

Speaker #2: Super, super good. Thank you. So now, let's look a bit to the future—my favorite part—and I will tell you why. What we have reported so far was historical.

Speaker #2: I mean, the results of H1 2026 are the results of our efforts many quarters before. So that's how it goes. So if anybody asks me what keeps me awake at night, it's: What do we do in '28, '29?

Speaker #2: So let me unpack a bit what we are doing today. That will help us to grow a few years from now, because by the end of '26, beginning of '27, we are more or less sure what we will get.

Marek Noetzel: Because end of 2026, beginning of 2027, we are more or less sure what we will get, but our thinking goes beyond that, and that's how NEPI was always managed, and we will continue to do so. Let's have a quick look on our development pipeline. Over EUR 800 million under permitting and on construction site. I think we are the busiest investor and development definitely in CEE, if not in the whole of Europe. That's fine. Of that, over EUR 650 million goes to our backbone, our core business, which is retail, and that translates into two greenfield developments. Name one company that would do in CEE greenfield developments. That's NEPI. There are four extensions in four countries. Overall, almost 190,000 GLA that we are busy working every day.

Speaker #2: But our thinking goes beyond that, and that's how NEPI has always been managed. We will continue to do so. So, let's quickly have a look at our development pipeline.

Speaker #2: Over €800 million under permitting and on construction sites. I think we are the busiest investor and developer, definitely in CEE, if not in the whole of Europe.

Speaker #2: But that's fine. Of that, over 650 million goes to our backbone, our core business, which is retail. And that translates into two greenfield developments.

Speaker #2: Name one company that would do, in CEE, greenfield developments—that's NEPI. But there are four extensions in four countries, overall almost 190,000 square meters of GLA that we are busy working on every day.

Speaker #2: On top of that, our new stream of income, which is photovoltaics or the whole energy production facility. And we are busy spending €127 million on photovoltaics.

Marek Noetzel: On top of that, our new stream of income, which is photovoltaics or the whole energy production facility, and we are busy spending EUR 127 million on photovoltaics. That means EUR 70 million to what Marius said, the photovoltaics greenfields in Romania, that will be equipped with battery energy storage systems, the value of which is close to EUR 50 million. You may ask why. Well, energy storage system is key to make the financial efficiency of our ecosystem even better, and that's the future of energy overall architecture for where we operate, but probably for Europe as well, and we want to be part of it. Last but not least, EUR 10 million goes into 22 projects, or put differently, out of Romania on top of rooftops photovoltaics. You may say why it takes so long. We should deliver by the end of the year.

Speaker #2: That means €70 million, to what Marius said, for the photovoltaics greenfields in Romania. That will be equipped with battery energy storage systems, the value of which is close to €50 million.

Speaker #2: You might ask why. Well, energy storage systems are key to making the efficiency, the financial efficiency of our ecosystem, even better. And that's the future of energy.

Speaker #2: Overall architecture for where we operate, but probably for Europe as well. And we want to be part of it. And last but not least, €10 million goes into 22 projects or, put differently, out of Romania, on top of rooftops photovoltaics.

Speaker #2: You may say, why does it take so long? We should deliver by the end of the year. But unlike in the leasing market, the energy market is very different in various countries.

Marek Noetzel: Unlike in leasing market, energy market is very different in various countries. It is very quick and efficient to get commissions in Romania. It takes a bit longer in Poland. But we are patient. We get there, we deliver. We should be able to report by the end of the year, all of those facilities are operating. Last but not least, residential projects. The question has been asked many times, is that a new strategy for NEPI? No. It is nothing else than making the highest and best use of excess of land that we already possess. It would be a pity not to monetize those. Now, would they happen or not? It's a bit function of our REIT structure because there are some limitations while you are REIT, residential for sale are not that obvious.

Speaker #2: It is very quick and efficient to get commissions in Romania. It takes a bit longer in Poland. But, you know, we are patient. We get there.

Speaker #2: We'll deliver. We should be able to report by the end of the year that all of those facilities are operating. Last but not least, residential projects.

Speaker #2: The questions have been asked many times. Is that a new strategy for NEPI? No. It is nothing other than making the highest and best use of access to land that we already possess.

Speaker #2: It would be a pity not to monetize those. Now, whether they happen or not is a bit a function of our REIT structure, because there are some limitations while you are a REIT.

Speaker #2: Residential for sale is not that obvious. But should we not build and sell those? It is immaterial in our balance sheet and in our earnings.

Marek Noetzel: Should we not build and sell those, it is immaterial in our balance sheet and in our earnings. You would remember Vulcan, how successful the development was, but the proceeds did not go into our distribution because they are not recurring. Please don't take our resi projects as a new strategy. It's just monetizing on and making the best use of what we already possess. Let's zoom in on those developments. When you look at Promenada today, and some of you have been visiting that property, we are about to complete the project that has been there for so many years. It will reshape not only the landscape of Bucharest, but I dare to say this will be the most exciting mixed-use development in whole of Romania, if not that part of Europe.

Speaker #2: You will remember Vulcan, how successful the development was. But the proceeds did not go into our distribution because they are not recurring. So please don't take our resi projects as a new strategy.

Speaker #2: It's just monetizing on and making the best use of what we already possess. Let's zoom in on those developments. When you look at Promenada today and some of you have been visiting that property, well, we are about to complete the project that has been there for so many years.

Speaker #2: It will reshape not only the landscape of Bucharest, but I dare to say this will be the most exciting mixed-use development in the whole of Romania, if not that part of Europe.

Speaker #2: We are super excited to open the retail part of it in the second quarter of next year. We are already 95% leased, and if we could add more GLA, we would lease it.

Marek Noetzel: We are super excited to open the retail part of it in Q2 of next year. We are already 95% leased, and if we could add more GLA, we would lease it. There is so much demand for the project. Office element is leasing up quickly. It will be delivered a bit later, so there is no immediate rush to pre-let, but the amount and the heads of terms we sign puts us in comfort zone on delivering of what we promised. In parallel, we are negotiating, final, I hope now, wording for the hotel that will occupy a few floors. That is the exciting news for 2027.

Speaker #2: There is so much demand, and for the project, the office element is leasing up quickly. It will be delivered a bit later, so there is no immediate rush to pre-let.

Speaker #2: But the amount and the heads of terms we sign put us in a comfort zone on delivering what we promised. And, in parallel, we are negotiating final—hopefully now—wording for the hotel that will occupy a few floors.

Speaker #2: So that is the exciting news for 2027. Galati and Carolinca—we have received building permits for both. And given that the pre-leasing is so successful—just think about it: 88% in Galati and 67% in Carolinca before even hitting the ground.

Marek Noetzel: Galați and Karolinka, we have received building permits for both. Given that the pre-leasing is so successful, just think about 88% in Galați and 67% in Karolinka before even hitting the ground, already committed by tenants, and it is confirming our initial feasibility study, coupled with tendering the projects to confirm that the costing part of it is met as for what we budgeted, puts us in a very comfortable position that those developments in no way should be considered unspeculative. They are almost fully let before we even start the construction. Congratulations to the teams for delivering. There is more to come, obviously, that we are busy designing. Let's then move and talk a bit about Spain. I spoke quite a lot about overall relative competitive advantages of Spain compared to the rest of Europe.

Speaker #2: Already committed by tenants, and it is confirming our initial feasibility study. Coupled with tendering the projects to confirm that the costing part of it is met, as per what we budgeted, puts us in a very comfortable position that those developments, in no way, should be considered as speculative.

Speaker #2: They are almost fully let before we even start the construction. So, congratulations to the teams for delivering. And there is more to come, obviously, that we are busy designing.

Speaker #2: Let's now move and talk a bit about Spain. I spoke quite a lot about the overall relative competitive advantages of Spain compared to the rest of Europe.

Speaker #2: So let's assume that is unpacked. But let's zoom in a bit on what Spain actually means in relation to CE, where we operate. Well, first of all, it actually has half of the population that we are serving already.

Marek Noetzel: Let's assume that is unpacked, but let's zoom a bit what actually Spain means in relation to CEE, where we operate. Well, first of all, it actually has half of the population that we are serving already. That is quite amazing. If you consider function of that would be number of potential opportunities for NEPI to acquire or grow, then you'll see that there is huge potential. At the same time, look at the purchasing power, it's 50% higher than average for CEE, while the density of modern retail properties is quite similar. That's quite amazing how much value we can extract applying our know-how and efforts in such an amazing market. When you look at GDP growth, I think this is very important for us to not only enter the market for, let's say, high yields, but it has to be good investment proposal.

Speaker #2: That is quite amazing. If you consider that the function of that would be the number of potential opportunities for NEPI to acquire or grow, then you see that there is huge potential.

Speaker #2: But at the same time, look at the purchasing power. It's 50% higher than average for CEE, while the density of modern retail properties is quite similar.

Speaker #2: That's quite amazing—how much value we can extract by applying our know-how and efforts in such an incredible market. And then, when you look at GDP growth, I think this is very important for us. Not only should we enter the market for, let's say, high yields, but it has to be a good investment proposal.

Speaker #2: And that investment proposal is good if the fundamentals of the economy we are entering are there. And I believe Spain has proven to be a very big success story.

Marek Noetzel: That investment proposal is good if the fundamentals of economy we are entering are there. I believe Spain has proven to be a very big success story, and it will continue in the future. The questions I am sure will be asked, "Marek, why not a few years ago? The yields were higher." Yes, they are way higher, but NEPI has spent the last four years buying over EUR 1.2 billion worth of assets. I can tell you, a bit zooming in of those, not only we bought them, but we managed them up. The three of them, I can say, Eliza, on the valuation? I am super happy to see the latest valuation. The three of those since we bought them, which is Forum Gdańsk, Magnolia, Silesia, the uplift valuation of those two is EUR 200 million. Forum Gdańsk only is half of it.

Speaker #2: And it will continue in the future. Now, the question, I'm sure, will be asked: Marek, why not a few years ago? The yields were higher.

Speaker #2: Yes, they're way higher. But NEPI has spent the last four years buying over €1.2 billion worth of assets, and I can tell you, zooming in on those—not only did we buy them, but we managed them up.

Speaker #2: The three of them, I can say, Alisa, on the valuation, I'm super happy to see the latest valuation. The three of those since we bought them, which is Forum Gdańsk, Magnolia, Silesia, the uplift is valuation of those two, is 200 million euros.

Speaker #2: Forum Gdańsk only is half of it. What I wanted to say is that, yes, Spain was there on our radar, but I don't think we were wasting time in C.

Marek Noetzel: What I wanted to say by that, yes, Spain was there on our radar, but I do not think we were wasting time in CEE. That is what I want to say, okay? I still believe there are opportunities, and the market is in the cycle where we can still make a difference for our shareholder. Add on top of that, high rating of Spain. I would be super happy to challenge further our credit agencies. Now they have given us the highest rating. Super cool. Congrats to the team. I am more than happy to meet them, and we are meeting them soon to report that the more and more income stream would be coming from higher credit-rated countries. That is nice meetings to have. I think that there are some non-direct financial benefits of entering the market that already is so highly regarded in the investment world.

Speaker #2: That's what I want to say. Okay. And I still believe there are opportunities, and the market is at a point in the cycle where we can still make a difference for our shareholders.

Speaker #2: Add on top of that, the high rating of Spain. I mean, I would be super happy to challenge further our credit agencies. Now they have given us the highest rating—super cool.

Speaker #2: Congrats to the team. But I am more than happy to meet them, and we are meeting them soon to report that more and more income streams will be coming from higher credit-rated countries.

Speaker #2: That's a nice meeting to have. I think there are some non-direct financial benefits to entering a market that is already so highly regarded in the investment world.

Speaker #2: Add to that the fact—and I can tell you a bit more, maybe, about the kitchen now, as we put our foot in Spain talking to funding partners.

Marek Noetzel: Add to that the facts, I can tell you a bit more maybe of the kitchen now, as we put our foot in Spain, talking to funding partners, that the bank funding is already what we hear and what we talk in non-binding discussions, but it is much cheaper than what we can get in CEE for obvious reasons. What I want to say by that, one should expect that the more exposure to countries like Spain, the lower the weighted average of cost of capital, and so the story should begin. I am a true big believer that would be the case for NEPI.

Speaker #2: The funding, bank funding, is already what we hear and what we talk about in non-binding discussions, but it is much cheaper than what we can deliver or get in CEE for obvious reasons.

Speaker #2: What I want to say by that is, one should expect that the more exposure to counter-explain, the lower the weighted average cost of capital, and so the story should begin. I am a true believer that this would be the case for NEPI.

Speaker #2: But if you add to that the synergies between the regions, I mean, it's amazing. And we did this analysis with Marius and the team—how many tenants are in Western Europe and Spain, and how many of them are in CE.

Marek Noetzel: If you add to that the synergies between the regions, it is amazing. We did this analysis with Marius and the team, how many tenants are in Western Europe and Spain and how many of them are in CEE, but how many actually in CEE have intention to move to Spain. Think about Modivo Group, the big Polish group with the HalfPrice, and they are heavily investing in Spain, and they want more, and they already speak to Justyna. They want to meet because they know if we do one property, probably more will follow. I think there is a lot of amazing deals we can do just moving tenants between the region C is considered the most sought by tenants region. We are now opening the road for those tenants to move between the regions.

Speaker #2: But how many actually in CEE have intention to move to Spain? Think about Modivo Group, the big Polish group with their HalfPrice. And they are heavily investing in Spain.

Speaker #2: And they want more. And they already spoke to Justyna; they want to meet because they know if we do one properly, probably more will follow.

Speaker #2: And I think there are a lot of amazing deals we can do just moving tenants between the region. C is considered the most—look, the most sought after by tenants—region.

Speaker #2: So, we are now opening the road for those tenants to move between the regions. And, by the way, we already have great relations with so many Spain-born fashion brands.

Marek Noetzel: We already have great relations with so many in Spain-born fashion brands, some of the most exciting and most successful in the world to say about Inditex or Mango. I am super excited, I think, Justyna and the team, you will have time of your life. Enjoy it. That is our Spanish kind of value add story going further. Let us zoom in at MegaPark Barakaldo. I do not know if this pointer works. Not really. Not sure you can see the red dot, so I can give you some more zoom in. The whole project, this is the whole project, that is all together 120,000 square meters of GLA. Of that, NEPI will control, subject to closing. Anca, I know you are working hard on that every day. 80,000 of it, which is Oops, sorry. Wrong button. Too quickly for Q&A.

Speaker #2: Some of the most exciting and most successful in the world, to say about Inditex or Mango. So I'm super excited. I think Justyna and the team, you will have the time of your life.

Speaker #2: Enjoy it. And that is our Spanish kind of value-add story going further. Let's zoom in at Megapark Barakaldo. I think—I don't know if this pointer works.

Speaker #2: Not really. Yeah. Not sure if you can see the red dot. So I can give you some more zoom in. So the whole project—this is the whole project—that's altogether 120,000 square meters of GLA.

Speaker #2: Now, of that, NEPI will control, subject to closing Anka—I know you're working hard on that every day—€80,000 of it, which is—oops, sorry.

Speaker #2: Wrong button. Too quickly for Q&A. This is the outlet and supermarket. This is cinema. This is neighboring IKEA. This is the sports store that is the subject of the transaction.

Marek Noetzel: This is the outlet and supermarket. This is cinema. This is neighboring IKEA. This is sport store, that subject of transaction. This is the retail park, at the end, you can see that Wamerland. This is, by all means, the biggest retail destination in north of Spain. It has all the tenants that we call category killers. Look at MediaMarkt, one of the most successful in Spain. Decathlon, same story. TK Maxx is opening in October. Cinema is refitting the store almost as we speak to open what Marius was referring to. They reinvent themselves totally. It will be totally new cinema with the reclinings, et cetera. Everything us as customers in cinemas, we love to experience. I still believe there is much more we can do. We have already looked at releasing.

Speaker #2: This is the retail parking. At the end, you can see that Wammerland. This is by all means the biggest retail destination in the north of Spain.

Speaker #2: It has all the tenants that we call category killers. Look at MediaMarkt—one of the most successful in Spain. Decathlon, same story. TK Maxx is opening in October.

Speaker #2: Cinema is repeating the store almost as we speak to open what Marius was referring to. They reinvent themselves totally. It will be a totally new cinema with the reclinings, etc.

Speaker #2: Everything our customers in cinemas will love to experience. And I still believe there is much more we can do. We've already looked at releases, we've already considered OCRs.

Marek Noetzel: We already consider OCRs, we already have experienced since signing the releasing cycle, showing that there is potential for further organic growth faster than average. We are super excited. Somebody will say, for sure, this is not typical NEPI Rockcastle product. Yes, but you would be surprised how many actually retail parks we do manage, we are super happy with them. I think that one should reverse that question, saying why not more retail parks? Very good questions. I think the retail parks in CEE are very complementary to our dominant shopping center, there will be a point in time where we should look at that very seriously, that will open another avenue for us to grow. This is how we look at it. It is not that it is something new for us. No, that opens our minds. We go out of our comfort zone.

Speaker #2: And we have already experienced, since signing, that the releasing cycle shows there is potential for further organic growth faster than average. So we are super excited.

Speaker #2: Somebody will say for sure this is not a typical NEPI Rockcastle product. Yes, but you would be surprised how many actual retail parts we do manage.

Speaker #2: And we are super happy with them. And I think that one should reverse that question, saying, why not more retail parks? Very good questions.

Speaker #2: I think the retail parks in CEE are very complementary to our dominant shopping center. And there will be a point in time where we should look at that very seriously.

Speaker #2: And that will open another avenue for us to grow. This is how we look at it. It’s not as if it’s something new for us.

Speaker #2: No, that opens our minds. We go out of our comfort zone. This is how NEPI was born, and this is how NEPI will continue to operate.

Marek Noetzel: This is how NEPI was born, this is how NEPI will continue to operate. We do not find that operationally difficult to unpack these questions, which I am sure there would be. Just look at the numbers, almost 13 million people annually, that has been increasing since, let us say, in post-COVID era, is much higher than in 2019, which is pre-COVID era. This product, the dominance, has proven to be very resilient. Look at as well, spending. Those 13 million people spent as much as EUR 180 million turnover. People come there and they shop a lot. This is pure shopping destination and we love it. 81,000 speak for itself. That is a dominance. This is what you want. If you want to get into those products, be big or go home. That is how it works. We are happy to be there.

Speaker #2: So, we don't find that operationally difficult to unpack these questions, which I'm sure they would be. But just look at the numbers—almost 13 million people annually.

Speaker #2: And that has been increasing since, let's say, in the post-COVID era. And it's much higher than in 2019, which is the pre-COVID era. So, for this product, the dominance has proven to be very resilient.

Speaker #2: But look at spending as well. Those 30 million people spent as much as €180,000 million in turnover. People come there and they shop a lot.

Speaker #2: I mean, this is a pure shopping destination. And we love it. 81,000 speaks for itself. That's dominance. This is what you want. If you want to get into those products, be big or go home.

Speaker #2: That's how it works. And we are happy to be there. 1.1 million people in the catchment. But just look at this whole district. Amazingly, very densely populated.

Marek Noetzel: 1.1 million people in the catchment, but just look at this whole district. Amazingly, very densely populated. The geography of Bilbao is such that it is actually in a valley. On one hand side, you have ocean, on the other, it is quite hilly. It is very difficult, if possible at all, to develop anything, any other retail scheme that will be competitive to that one. That kind of ring-fences the future of our property. This is a Spanish story, and next step will continue. I am sure there will be question about pipeline, and yes, we already have our view of what we like and where we could go. We do know there will be projects coming to the market in September.

Speaker #2: The geography of Bilbao is such that it's actually in a valley. On one hand, you have the ocean; on the other, it's quite hilly.

Speaker #2: It is very difficult, if possible at all, to develop anything—any other retail scheme—that will be competitive to that one. So, that kind of ring-fences the future of our property.

Speaker #2: So, this is the Spanish story. And the next step will continue. I'm sure there will be questions about the pipeline. And yes, we already have our view of what we like and where we could go.

Speaker #2: We do know there will be projects coming to the market in September. The market was a bit slow due to the other transaction that we are all aware of.

Marek Noetzel: Market was a bit slow due to the other transaction that we are all aware of, a portfolio transaction of EUR 1.5 billion, and we do know other players were waiting for the transaction to materialize before they would go to the market for obvious reasons. That was very huge ticket, so why competing with that? We do know more will come, and I hope Anca will book a lot of planes to Madrid and Barcelona and whatnot to search for more. This is MegaPark Barakaldo and Basque story. I am sure there will be questions. We are very happy to take them because now the line will open for questions, and those of you who are online are more than welcome to send your questions. The team is there to pick them up.

Speaker #2: Portfolio transaction of €1.5 billion. And we do know other players were waiting for the transaction to materialize before they would go to the market, for obvious reasons.

Speaker #2: That was a very huge ticket. So why compete with that? We do know more will come. And I hope Anka will book a lot of planes to Madrid and Barcelona and whatnot to search for more.

Speaker #2: So this is Megapark, Barcalado, and Basque story. I'm sure there will be questions. We are very happy to take them, because now the line will open for questions.

Speaker #2: And those of you who are online are more than welcome to send your questions. The team is there to pick them up. And looking to the future, I want to say it again.

Marek Noetzel: Looking to the future, I want to say it again, and I know I said it before, but the new executive team does not mean new strategy. All three of us, we have been there over 2 years ago, where four-pillar strategy was designed under Rudi's leadership. We were there, we co-designed, and we stick to that. Again, it is organic growth. It is developments, M&As, and new income streams. That won't change. What might change is the tactics of getting each of those running fast as we must adjust to the reality outside, to the financial markets, to the politics, et cetera. But we are enemies of better if good is delivering, because good is delivering.

Speaker #2: And I know I said it before, but the new executive team does not mean a new strategy. All three of us, we have been there for over two years.

Speaker #2: We're a four-pillar strategy. It was designed under Rudy's leadership. We were there. We co-designed, and we stick to that. So, again, it is organic growth.

Speaker #2: It is developments, M&As, and new income streams. That won't change. What might change is the tactics of getting each of those running fast, as we must adjust to the reality outside—to the financial markets, to the politics, etc.

Speaker #2: But we are enemies of 'better' if 'good' is delivering, because 'good' is delivering—just looking at the revised guidance for the year from 3%.

Marek Noetzel: Just looking at the revised guidance for the year from 3%, we are now happy to inform that we will deliver between 3.5% to 4%, which was fueled by operational excellence and M&A activity. Before we get to Q&As, I would like to leave you with few main takeaways. First of all, NEPI's operation, again, shows to be excellent. We NOI growing faster than indexation, and with the pipeline of leasing and developments we have, I am happy with that. Number 2, the financial prudence and S&P finally recognizing NEPI is highly graded. Super great result. We are happy to hear that. REIT, this is very important.

Speaker #2: We are now happy to inform you that we will deliver between 3.5% and 4%, which was fueled by operational excellence and M&A activity. Now, before we get to the Q&A, I would like to leave you with a few main takeaways.

Speaker #2: First of all, NEPI's operation again shows to be excellent, with NOI growing faster than indexation. And with the pipeline of leasing and developments, I'm happy with that.

Speaker #2: Number two, the financial problems. And S&P finally recognizing NEPI as highly graded—super great result. We are happy to hear that. Really, this is very important.

Speaker #2: You don't maybe see it yet, but just to put it into perspective, a 6.5% incoming yield from Spain, given that we have restructured already there in Spain and will have it from the 1st of January, makes it from a DEPS perspective much more accretive than investing at 6.8% in Poland due to taxation.

Marek Noetzel: You don't maybe see it yet, but just to put into perspective, 6.5% incoming yield from Spain, given that we have REIT structure already there in Spain and will have it from 1 January, make it from the EPS perspective, much more accretive than investing at 6.8% in Poland due to taxation. So in real terms, the impact of 6.8% in Spain is much higher than in the regions where there is no REIT. So I think that is important to remember because we will benefit from REIT structure going into the future. Those were three. I missed the fourth one. I will remind myself, I'm sure. Anyways, with that, I wanted to thank you so much for coming and paying attention. I'm sure there will be questions. I'm sure 90% of them will be Spain-related. We are happy to take all of them.

Speaker #2: So in real terms, the impact of 6.8 in Spain is much higher than in the regions where there is no REIT. So I think that is important to remember because we will benefit from restructuring going into the future.

Speaker #2: So those were three. I missed the fourth one. I will remind myself, I'm sure. Anyway, with that, I wanted to thank you so much for coming and paying attention.

Speaker #2: I'm sure there will be questions. I'm sure 90% of them will be Spain-related. We are happy to take all of them.

Speaker #2: Thank you so much.

Marek Noetzel: Thank you so much.

Marius Barbu: That's nice.

Speaker #1: That's nice. It wasn't like that last year. I don't think so. Nice improvement, by the way.

Eliza Predoiu: It's very hot.

Marius Barbu: It wasn't like that last year, I don't think so. Nice improvement by DS. More comfy. Okay. Do we have questions? Yeah, we do.

Speaker #2: More comfy.

Speaker #1: Okay. Do we have questions? Yeah, do we.

Speaker #3: Just a few questions from me. Just to double-check, right? Your update to your guidance—does that include the acquisition from Spain, as well as the changes in finance costs for the second half of the year?

[Analyst 1]: A few questions from me. Just to double-check, your update to your guidance, does that include the acquisition from Spain as well as the changes in finance cost for H2 of the year?

Speaker #4: Absolutely.

Eliza Predoiu: Absolutely.

Marius Barbu: Yes, exactly.

Speaker #1: Yes, exactly.

Speaker #3: Okay. Then can you just touch on the consumer spend changes that you are expecting maybe from the war? It seems as though maybe there's a bit more robustness than maybe some of us had expected.

[Analyst 1]: Okay. Can you just touch on the consumer spend changes that you guys are expecting, maybe from the war? It seems as though maybe there's a bit more robustness than maybe some of us have expected.

Speaker #1: You want to speak of?

Marius Barbu: You want to speak up? You said about the consumer trend spending?

Speaker #4: Well, if I can, you asked about the consumer trend in spending. What we see is that the picture is mixed in our geographies, but in principle, consumer healthiness and willingness to buy is still solid.

[Analyst 1]: Yeah.

Marius Barbu: What we see is that the picture is mixed in our geographies, but in principle, the consumer healthiness and willingness to buy still is solid. In Romania specifically, all by the increased taxation and the increased VAT rate put some pressure on the consumers. What we can see is that the rate of savings is going up. So we feel that people are having the money and just they keep it a bit up until this turbulent moment will end, which is, I think, in sight. So they will come back to the market. This is how we feel. The rest of the markets are quite strong. The consumer spending is really going up. Two things that we passed through, and quite successfully, was that euro conversion in Bulgaria that came in 1 January. We are really curious to see how it affect the consumers.

Speaker #4: In Romania specifically, all the increased taxation and the increased VAT rate put some pressure on consumers. What we can see is that the rate of savings is still going up.

Speaker #4: So we feel that people are having the money and just they keep it a bit in up until this turbulent moment will end, which is, I think, in sight.

Speaker #4: So we think they will come back to the market. This is how we feel. The rest of the markets are quite strong. Consumer spending is really going up.

Speaker #4: And two things that we passed through, and quite successfully, were the euro conversion in Bulgaria that came in on the 1st of January. We are really curious to see how it affects the consumers, and it turned out to be very productive.

Marius Barbu: It turned out to be very productive. Consumers still are in the market, and you saw the turnovers, they are growing, and the NOI as well. Also Croatia, a very good example of another growing market. So overall, including Poland, we see actually, the consumers are really continuing the spending with now no real pressures except the one that I mentioned in Romania.

Speaker #4: I mean, consumers are still in the market, and you saw the turnovers—they are growing. And the NOI as well. Also, Croatia is a very good example of another growing market.

Speaker #4: So overall, including Poland, we feel that we actually see consumers continuing to spend more. Right now, no real pressures except the one that I mentioned in Romania.

Speaker #3: And are the governments providing any support to the consumers right now? And is that likely to maybe change at some point?

[Analyst 1]: Are the governments providing any support to the consumers right now? Is that likely to maybe change at some point?

Speaker #4: There are schemes of support throughout the region, and they are based on European funds and local funds. So there is a lot of money flowing up from the European Union to our geographies, both for infrastructure development and also for some other developments in terms of military, for example, and other key projects—energy, for example.

Marius Barbu: There are schemes of support throughout the region, and they are based on European funds and local funds. There is a lot of money flowing up from European Union to our geographies, both for infrastructure development and also for some other developments in terms of military, for example, and other key projects, energy, for example. This transforms into the, or translates into the consumer being able to having more available funds to spend. Part of it, there are local support schemes. In every of the regions, there are social schemes in place. We do not see it as a necessary critical element for consumers to keep spending. The fundamentals are still there, so nothing changed. It is just a, I would say, a rebased but in case of Romania. The other countries are performing very, very well.

Speaker #4: And this transforms into, or translates into, the consumer being able to have more available funds to spend. So we actually—and there are a part of it—there are local support schemes in every one of the regions.

Speaker #4: There are social schemes in place, but we don't see it as a necessary, critical element for consumers to keep spending. The fundamentals are still there.

Speaker #4: So, nothing changed. It's just, I would say, a rebase, putting the case of Romania. The other countries are performing very, very well.

Speaker #3: Okay, thank you. And then, Eliza, just to confirm, is there any risk on your conversion to a Dutch REIT for next year, or is this completely set in stone?

[Analyst 1]: Okay. Thank you. Eliza, just to confirm, is there any risk on your conversion to a Dutch REIT for next year, or is this completely set in stone?

Eliza Predoiu: There is still one pending point to be discussed, as Marek was pointing, about the residential developments. Other than that, we have been ready to apply the REIT regime since our incorporation in Netherlands. It was just the fact that we wanted to be crystal clear that our business model is taken into account, and that there are not any kind of loopholes that we may, let us say, unwillingly neglect, and then to be in the breach of the REIT regime. So no, we are not in any kind of clauses under the breach of REIT regime, and our discussion with the Dutch tax authorities is scheduled to end in the last quarter of 2026 on this residential point, which is, as we said, not material for us, but it is an additional competitive advantage and competence that we would like to keep in the company.

Speaker #5: There is still one pending point to be discussed. As Marek pointed out regarding the residential developments—other than that, we have been ready to apply the REIT regimes since our incorporation in the Netherlands.

Speaker #5: It was just the fact that we wanted to be crystal clear that our business model is taken into account, and that there are not any kind of loopholes that we may, let's say, unwillingly neglect and then be in breach of the REIT regime.

Speaker #5: So no, we are not in any kind of clauses under the breach of the REIT regime. And our discussion with the Dutch tax authorities is scheduled to end in the last quarter of 2026.

Speaker #5: On this residential point—which, as we said, is not material for us—it is an additional competitive advantage and competence that we would like to keep in the company.

Speaker #3: Okay, so you're talking about being able to develop to sell, as opposed to...

[Analyst 1]: Okay. So you are talking about being able to develop to sell, as opposed to-

Speaker #5: Yes. The provision in that REIT regime is that we should have, let's say, recurrent properties kept on our balance sheet for at least three years.

Eliza Predoiu: Yes. The provision in that REIT regime is that we should have, let's say, recurrent properties kept on our balance sheet for at least three years. We may, let's say, adjust the strategy for residential rather than develop to sell. It is for us to be taken into account, but EUR 47 million over, let's say, two to three years, it is not something material.

Speaker #5: So, we may, let's say, adjust the strategy for residential, rather than develop to sell. It's for us to take into account. But €47 million over, let's say, two to three years is not something material.

Speaker #3: Okay.

Speaker #1: Getting REIT status is more important for us than ready developments, for those immateriality reasons. It's good to have, but if we need to hold or build to lease, or partner with somebody, we will do so.

Marius Barbu: Getting a REIT status is more important for us than resi developments for those immateriality reasons. It is good to have, but if we need to hold or build to lease or partner with somebody, we will do so. REIT comes first, and as function of that, our strategy for resi will be adapted. That is how we look at it.

Speaker #1: So, REIT comes first, and as a function of that, our strategy for Ready will be adapted. And that's how we look at it.

Speaker #3: Okay. Thank you.

[Analyst 1]: Okay. Thank you.

Speaker #6: My question is about Spain. Are you looking at greenfield developments as well, or mostly just existing assets? And then, just linked to that, how competitive is the acquisition market there?

[Analyst 2]: My question is about Spain. Are you looking at greenfield developments as well, or mostly just existing assets? Then just linked to that, how competitive is the acquisition market there? We know we have Vukile and Castellana that is also very aggressively in that market, Lighthouse, et cetera. Maybe you can just expand a bit.

Speaker #6: We know we've got Bukele and Castellana. That's also very aggressively in that market, Lighthouse, etc. Maybe you can just expand a bit on that.

Speaker #1: Sure. I was waiting for that question. Well, let me start maybe with the greenfields. I mean, we have developed in Novi Sad a greenfield development.

Marek Noetzel: Sure. Well, let me start maybe with the greenfields. We have developed in Novi Sad, greenfield development. We don't mind doing greenfield developments beyond our comfort zone, because normally they bring extra return, which the premium, which is worth it, and I think we have all the capabilities to do so. So we wouldn't exclude that. Would those opportunities come? Too early to say. Would the potential returns justify the risk? We need to measure. That's very financial decision to be made, so to say. Now, on competitiveness, I need to share with you a bit of my personal experience. So I joined, at that time, Rockcastle in Poland in 2016. And I was approached by, at that time, executive team, totally anonymous to the market. Nobody knew Rockcastle.

Speaker #1: We don't mind doing greenfield developments beyond our comfort zone, because normally they bring extra return, which is the premium that is worth it. And I think we have all the capabilities to do so.

Speaker #1: So we wouldn't exclude that. Would those opportunities come—too early to say? Would the potential returns justify the risk? We need to measure that.

Speaker #1: That's a very financial decision to be made, so to say. Now, on competitiveness, I need to share with you a bit of my personal experience.

Speaker #1: So I joined, at that time, Rock Castle in Poland, in 2016. And I was approached by the executive team, who were at that time totally anonymous to the market.

Speaker #1: I mean, nobody knew Rockcastle. And then it was the time when the competitiveness of the market was so high that all the German funds were buying every retail asset that was available.

Marek Noetzel: Then it was the time where the competitiveness of the market was so high that all the German firms were buying every retail that there was available. I was like, "Should I join them? How can they compete with German firms whose cost of capital is so low?" But I said, "Well, no risk, no gain." Look where we are in Poland today. What I wanted to say by that, I'm not saying the same story will happen in Spain, but what I wanted to say, we are long-term there. Of course, there is competition, but even in Poland, there is competition. Look at all the Czech firms which are buying properties at very competitive pricing. I'm not saying that we will be able to grow very fast, but we are there for long term. That's number 1.

Speaker #1: And I was like, should I join them? How can they compete with German funds whose cost of capital is so low? But I said, well, no risk, no gain.

Speaker #1: And look where we are in Poland today. What I wanted to say by that—I'm not saying the same story will happen in Spain—but what I wanted to say is that we are there for the long term.

Speaker #1: And of course, there is competition, but even in Poland, there is competition. I mean, look at all the Czech fans who are buying properties at very competitive pricing.

Speaker #1: So, I'm not saying that we will be able to grow very fast, but we are there for the long term—that's number one. Number two, I believe that, given the strength of our balance sheet, there are some competitive advantages that we can offer.

Marek Noetzel: Number 2, I believe that given the strength of our balance sheet, there are some competitive advantages that we can offer. We are cash buyers at those level of volumes. We don't make our offers subject to debt financing, et cetera. I think that sellers who have certain exit strategy and are looking for a partner with whom they can, for example, build the longer exit strategy, we can maybe partner with them and offer what others will not be able to. So it's already competitive where we operate, and there is reason why Spain is competitive. But as I said, we are very humble. It's a long-term game. We look for value, and I'm sure it will pay off. We like to take a little risk in longer term. That is our strategy.

Speaker #1: I mean, we are cash buyers. At those levels of volume, we don't make our offers subject to debt financing, etc. I think that sellers who have a certain exit strategy and are looking for a partner with whom they can, for example, build a longer exit strategy—we can maybe partner with them and offer what others will not be able to.

Speaker #1: Not be able to. So, it's already competitive where we operate, and there is a reason why Spain is competitive. But as I said, we are very humble.

Speaker #1: It's a long-term game. We look for value, and I'm sure it will pay off. We like to take a little risk in the longer term.

Speaker #1: That is our strategy.

Speaker #6: Thank you, guys. Congratulations on the result. Question for me is, as you look at Romania, given the concerns that are happening from a macro perspective, is there a market that or are opportunities opening up there for more acquisitions, or is that a market that you're kind of gradually shrink out of as you expand into Spain and elsewhere?

[Analyst 3]: Thank you, guys. Congratulations on the result. Question for me is, as you look at Romania, given the concerns that are happening from a macro perspective, is it a market that, or are opportunities opening up there for more acquisitions, or is that a market that you'll gradually shrink out of as you expand into Spain and elsewhere?

Speaker #1: No, I mean, if there were opportunities in Bucharest that fit our investment criteria—and we know exactly what we want—not only Bucharest, but also outside; but no, the current macro situation hasn't triggered any transaction.

Marek Noetzel: No, if there were opportunities in Bucharest that fit our investment criteria, and we know exactly what we want, not only Bucharest, outside. But the current macro situation hasn't triggered any transaction in the area of what's our interest. By the way, when COVID hit and we had all that liquidity, we said, "Now, we're going to buy." Nothing happened. COVID, that was a difficult story. Now, what we see now in Romania is slowdown in economy. Okay, these things happen. You cannot grow too fast for too long. But I really honestly do not expect that there will be a distress sale of the product that we like.

Speaker #1: In the area of what’s our interest. And by the way, when COVID hit—and we had a drop, like we did—we said, now, now we’re going to buy.

Speaker #1: Nothing happened. And COVID, that was a difficult story. Now, what we see now in Romania is a slowdown in the economy. Okay, these things happen. You cannot grow too fast for too long.

Speaker #1: But I really, honestly, do not expect that there will be a distress sale of the product that we like.

Speaker #2: And one thing we don't want to move out of—you said to shrink, I think you mentioned this word.

Marius Barbu: And one thing, we don't want to move out of You said to shrink, I think? You mentioned this word.

[Analyst 3]: Well, not necessarily by selling, but by not buying and buying in Spain, you're effectively shrinking in Romania and Poland as well.

Speaker #6: Well, not necessarily by selling, but by not buying—and buying in Spain. You're effectively shrinking in Romania and Poland as well.

Speaker #1: No, I mean, you might have noticed—although the question was not asked—that we have the Lithuania property held for sale. So I think you need to consider that it may be a point in time where rotating out of some of the assets that do not deliver enough growth, or do not enable us to scale up the business to the extent we want, might be one of the sources of funding.

Marek Noetzel: No. You might have noticed, although question was not asked, that we have Lithuania property held for sale. So I think that you need to consider that it may be a point in time where rotating out of some of the assets that do not deliver enough growth or do not enable us to scale up the business to the extent we want, might be one of the sources of funding. But all we possess in Bucharest is top quality, and this is not considered for selling.

Speaker #1: But all we possess in Bucharest is top quality, and this is not considered for selling.

Speaker #6: Okay. A follow-up from me: in addition to Spain, are there any other markets, as you're moving west, that are of interest to you guys?

[Analyst 3]: Okay. Follow-up from me is, in addition to Spain, any other markets, call it, as you are moving west, are of interest to you guys?

Speaker #1: Well, if you put in my numbers—and I would love to help Lisa to be here when we cross €10 billion—but realistically, I think that just by the size of Iberia, because we look very seriously at Portugal as well and Italy, I wouldn't be surprised if in five years' time we manage, let's say, €2 billion in Iberia, maybe a couple of hundred million or half a billion, or one billion in Italy.

Marek Noetzel: Well, if you put into my numbers, I would love to help Eliza to be here where we cross EUR 10 billion, but realistically, I think that just by the size of Iberia, because we look very seriously at Portugal as well, and Italy, I would not be surprised if in 5 years' time, we manage, let's say, EUR 2 billion in Iberia, maybe couple of hundred millions or half billion or to one in Italy. It will be very much function of quality of product and the returns we can deliver. Again, do not quote me in 5 years if we do not get there, because this is the plan. We need to aim high and let us see where the journey will take us. Please do not exclude from that expansion in Poland. There are opportunities coming in Poland, in C, by all means.

Speaker #1: It would very much be a function of the quality of the product and the returns we can deliver. But again, don't quote me in five years if we are not there, because this is the plan.

Speaker #1: We need to aim high, and let's see where the journey will take us. But please do not exclude expansion in Poland from that. There are opportunities coming.

Speaker #1: In Poland, in the sea, by all means, I'm talking about Poland because there is one that will come in September. I can't tell you yet what that is.

Marek Noetzel: I am talking Poland because there is one that will come in September. I cannot tell you yet what that is. Just our balance sheet makes us a bit too big now for what will come in short term, so we need to look elsewhere. That is our strategy. Looks like we do not have questions from audience. Anca, maybe you want to-

Speaker #1: But just our balance sheet makes us a bit too big now for what will come in the short term. So we need to look elsewhere.

Speaker #1: That's our strategy. Looks like we don't have questions from the audience. Anka, maybe you want to...

Speaker #3: Hello, everybody. A few questions are coming in online. Some of them have already been answered, so I will go to the new ones. A question for Eliza.

Anca Nacu: Hello, everybody. A few questions coming online. Some of them have already been answered, so I will go to the new ones. A question for Eliza. NEPI has a EUR 250 million bond due in July 2027. Can you speak about the plans for this maturing debt?

Speaker #3: NEPI has a €250 million bond due in July '27. Can you speak about the plans for this maturing debt?

Speaker #7: Yes, of course. So, if we are going to issue a bond in the upcoming month—September or October—we are going to refinance these maturities, this October and July 2027, in one go.

Eliza Predoiu: Yes, of course. If we are going to issue a bond issue in the upcoming month, September or October, we are going to refinance these maturities, this October and July 2027, in one go. If we are going to go for plan B, assuming that the market context is going to be a challenging one, then we are going to have a bond issue or a bilateral loan to refinance that in the upcoming six months. Looking at our liquidity of EUR 1.2 billion to refinance EUR 500 million and buying a bit of more time, it's not something that we wouldn't take into consideration. But looking as the market is today, we would like to go and issue a bond.

Speaker #7: If we are going to go for plan B, assuming that the market context is going to be a challenging one, then we are going to have a bond issue or a bilateral route to refinance that in the upcoming six months.

Speaker #7: So, looking at our liquidity of €1.2 billion, to refinance €500 million, and buying a bit more time, it's not something that we wouldn't take into consideration.

Speaker #7: But looking at the market as it is today, we would like to go and issue a bond.

Speaker #3: Still a question for Eliza on funding. The bond mix has declined. Is there a deliberate shift in funding strategy, and should we expect bank debt to play a larger role going forward?

Anca Nacu: Still a question for Eliza on funding. The bond mix has declined. Is there a deliberate shift in funding strategy, and should we expect bank debt to play a larger role going forward?

Eliza Predoiu: We have never considered to, let's say, go and be a pure bond issuer. We have a bias towards unsecured funding, and this is why over 80% of our debt is unsecured. But we want to preserve a percentage of secured funding as well, so that we'll have good partnerships in the region and international, but bilateral partnership, so that to lead the way in the project that we want to have. The main shrinkage of the bonds may occur when we replace a bond with an IFC loan back in 2023. If the market is going to be there at the maturity, we may go back to the bond market.

Speaker #7: We have never considered, let's say, going and being a pure bond issuer. We have a bias towards unsecured funding, and this is why over 80% of our debt is unsecured.

Speaker #7: But we want to preserve a percentage of secured funding as well, so that we can have good partnerships in the region and internationally, both through bilateral partnerships, so that we can lead the way on the projects that we want to have.

Speaker #7: So the main shrinkage of the bonds may occur when we replace a bond with an IFC loan, back in 2023. If the market is going to be there, and the maturity, we may go back to the bond market.

Speaker #7: But we want to have the flexibility between the partners that we choose, as long as the pricing is competitive, and we go with the strength of the group for an unsecured loan rather than going for mortgages.

Eliza Predoiu: But we want to have the flexibility in between the partners that we chose, as long as the pricing is going to be competitive, and we go with the strength of the group for an unsecured loan rather than going for mortgages. So it's a deliberate action and it's adaptive to the context.

Speaker #7: So, it's a deliberate action, and it's adapted to the context.

Speaker #3: And relating to that, how do you see the funding in relation to the new move into Western Europe? Will this affect in any way the funding strategy going forward?

Anca Nacu: Relating to that, how do you see the funding in relation to the new move in towards Western Europe? Will this affect in any way the funding strategy going forward?

Speaker #7: The funding strategy—the strategy—won't be affected in any way, whether we are going to put a mortgage loan on our Spanish properties or more Western properties.

Eliza Predoiu: The funding strategy won't be affected in any way. Whether we are going to put a mortgage loan in our Spanish properties or more Western properties, this doesn't destabilize the overall 80% of our debt to be unsecured. The funding strategy will stay there as it used to be.

Speaker #7: This doesn't destabilize the overall 80% of our debt that is unsecured, so the funding strategy will remain as it used to be.

Speaker #3: A question on the asset held for sale and Lithuania. The rationale around reclassification and considering the disposal—and are there any other assets that are considered in the future for disposal?

Anca Nacu: A question on the asset held for sale in Lithuania, the rationale around the reclassification and considering the disposal. Are there any other assets that are considered in the future for disposal?

Speaker #1: I think it sounds like a question for Marek as well. Okay, so let's maybe zoom out a bit and consider Prebaltica as one market, because this is how it should be considered.

Marek Noetzel: I think it sounds like a question for Marek.

Anca Nacu: For Marek.

Marek Noetzel: Okay. Maybe let's zoom out a bit and consider The Baltics as one market, because this is how it should be considered. When we entered Lithuania, we had big ambitions to grow further north, but there was little room for us to grow, and that hasn't changed since we bought Ozas. Now we need to ask ourselves questions. Can we scale up business in The Baltics or not, and do we want it? My conclusion is I would rather spend time and effort of the team in the market that offers much more opportunities, like Iberia, and then use proceeds from Ozas and reallocate them to other markets when we can scale up. Scaling up matters to us a lot. That is one answer. The other is The Baltics retail market is a bit different to what we are used to.

Speaker #1: When we entered Lithuania, we had big ambitions to grow further north. But there was little room for us to grow, and that hasn't changed since we bought.

Speaker #1: Ozas. And now we need to ask ourselves questions. Can we scale up business in Prebaltics or not? And do we want it? My conclusion is I would rather spend time and effort of the team in the market that offers much more opportunities, like Iberia, and then use proceeds from Ozas and reallocate them to other markets where we can scale up.

Speaker #1: Scaling up matters to us a lot, so that is one answer. The other is, the Prebaltics retail market is a bit different to what we are used to, to just give you an example.

Marek Noetzel: To just give you an example, and that's not a criticism, don't get me wrong, it's an observation, but a lot of tenants that operate there, the international big names that we are used to, are being operated by franchise partners. It's a bit different story, and not that we don't like it, but you have more risk associated to the brand performance and the party that manages that. That won't change anytime soon, as those brands claim the size of the market and size of the business does not justify putting effort into setting up their own operation. If you think about that, then you say, "Okay, maybe we will be better off somewhere else." That is the thinking behind. If there are any other assets held for sale or considered, not now in the way that we look at Ozas.

Speaker #1: And that's not a criticism—don't get me wrong—it's an observation. But a lot of tenants that operate there, the international big names that we are used to, are being operated by franchise partners.

Speaker #1: It's a bit of a different story. And it's not that we don't like it, but you have more risk associated with the brand performance and the party that manages it.

Speaker #1: And that won't change anytime soon, as those brands claim that the size of the market and the size of the business do not justify putting effort into setting up their own operations.

Speaker #1: So if you think about that, then you say, okay, maybe we would be better off somewhere else. So that is the thinking behind it. And if there are any other assets held for sale or considered—not now in a way that we look at OZAS—any other asset rotation would have to be coupled with us reallocating the proceeds.

Marek Noetzel: Any other asset rotation would have to be coupled with us reallocating the proceeds. In this very example of Ozas, that times very well with Spain. If we would ever consider any other disposal seriously, we would need to have targets to buy other assets of quite high probability of execution. We don't want to take NOI out of our P&L and then not being able to replace that. We need to be very careful and let's see what future brings.

Speaker #1: So in this very example of OZAs, that times very well with Spain. So if we would ever consider any other disposal seriously, we would need to have targets to buy other assets of quite high probability of execution.

Speaker #1: We don't want to take NOI out of our P&L and then not be able to replace that. So we need to be very careful, and let's see what the future brings.

Marius Barbu: If I may add one thing on this, if you may, Mike.

Speaker #2: If I may, I'd like to add one thing on this. If it's alright, Mark.

Speaker #1: Of course.

Marek Noetzel: Of course, please.

Speaker #2: So, Ozas for us, it's a success story. Just to make things clear, we are not selling Ozas because it doesn't work. We managed to improve the NOI of this asset, I think, since we bought it.

Marius Barbu: Ozas for us, it is a success story. Just to make things clear, we are not selling Ozas because it does not work. We managed to improve the NOI of this asset, I think since we bought it, correct me if I am wrong, but I think it is between 60% to 70%. We increased it. The asset per se, it is very healthy, but the context, as what Mike was mentioning, the scaling up is the reason for us to consider the rotation of the asset, not the asset itself. It is really the forward-looking strategy that is behind this movement rather than the asset itself. Just to put any concerns with the asset quality, to quench any other questions related how this asset is performing. It is really a good asset. The team there is really a good team.

Marek Noetzel: Ozas for us, it is a success story. Just to make things clear, we are not selling Ozas because it does not work. We managed to improve the NOI of this asset, I think since we bought it, correct me if I am wrong, but I think it is between 60% to 70%. We increased it. The asset per se, it is very healthy, but the context, as what Mike was mentioning, the scaling up is the reason for us to consider the rotation of the asset, not the asset itself. It is really the forward-looking strategy that is behind this movement rather than the asset itself. Just to put any concerns with the asset quality, to quench any other questions related how this asset is performing. It is really a good asset. The team there is really a good team.

Speaker #2: Correct me if I'm wrong, but I think it's between 60% to 70%. So we increased it. The asset per se, it's very healthy. But as the context, as what Marek was mentioning, is the thing that we the scaling up is the reason for us to consider the rotation of the asset, not the asset itself.

Speaker #2: So it's really the forward-looking strategy that's behind this movement rather than the asset itself, just to put any concerns with the asset quality at rest, to quench any other questions related to how this asset is performing.

Speaker #2: It's really a good asset, and the team there is really a good team.

Speaker #3: And one final question for Eliza: What are the benefits or financial changes expected in '27 as a result of the new REIT status?

Anca Nacu: One final question for Eliza. What are the benefits or financial changes expecting in 2027 as a result of the new REIT status?

Speaker #7: The main benefit is that we want to be required to be subject to the Pillar Two directive, which, as I mentioned earlier, is requesting us to pay 15% in every country where we operate as tax.

Eliza Predoiu: The main benefit is that we will not be required to be subject to the Pillar Two Directive, which as I mentioned earlier, is requesting us to pay 15% in every country where we operate as tax. We are going to continue to tax our operational profits in our jurisdictions, but without, let's say, standing up to this hurdle of 15%. There are countries in which the tax rate is above this 15%, Romania, Poland, but there are some others where this rate is below 15%, for example, Bulgaria. So we will benefit from the taxation rate in the countries where we are operating, and therefore, we are going to preserve the status quo that we have now, leading to a group tax rate in between 8% to 10% for the next, let's say, 12 to 24 months. These are the main benefits.

Speaker #7: We are going to continue to tax our operational profits in our jurisdictions, but without, let's say, standing up to this hurdle of 15%. And there are countries in which the tax rate is above this 15%.

Speaker #7: Romania, Poland. But there are some others where this rate is below 15%, for example, Bulgaria. So we will benefit from the taxation rate in the countries where we are operating and, therefore, we are going to preserve the status quo that we have now, leading to a group tax rate between 8% and 10% for the next, let's say, 12 to 24 months.

Speaker #7: These are the main benefits. Plus, you are going to compare us like-for-like with other peers.

Eliza Predoiu: Plus, you are going to compare us like for like with other peers.

Speaker #3: Thank you. I'm afraid this is the time that we have allocated. We will continue to answer questions in the meetings, and we are expecting your further questions by email.

Anca Nacu: Thank you. I am afraid this is the time that we have allocated. We will continue to answer questions in the meetings, and we are expecting your further questions by email.

Speaker #2: Thank you.

Marek Noetzel: Thank you. Thank you so much.

Speaker #1: Thank you so much.

Eliza Predoiu: Thank you.

Speaker #7: Thank you.

Marius Barbu: Thank you for coming.