Q2 2026 Aedifica NV Earnings Call

September 1, 2026

Speaker #1: Ladies and gentlemen, welcome to the AEDIFICA half-year 2026 results conference call. For the first part of the conference call, participants will be in listen-only mode. During the Q&A session, participants will be able to ask questions by dialing #5 on their telephone keypad or through the chat box for written questions below the player.

Operator: Ladies and gentlemen, welcome to the AEDIFICA H1 2026 results conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants will be able to ask questions by dialing #5 on their telephone keypad or through the chat box for written questions below the player. Now, I will hand the conference over to the speakers. Please go ahead.

Speaker #1: Now I will hand the conference over to the speakers. Please go ahead.

Speaker #2: Thank you. Good morning, and welcome to this very first half-year webcast for the combined and new Aedifica Group. As usual, we will walk you through a couple of highlights: financials, which will be presented by the CFO; I will dive into the portfolio and hopefully tackle some of the key messages; and then we'll switch to the outlook and end with a Q&A.

Stefaan Gielens: Thank you. Good morning and welcome to this very first H1 webcast for the combined and new AEDIFICA Group. As usual, we will walk you through a couple of highlights, financials that will be presented by the CFO. I will dive into the portfolio and hopefully tackle some of the key messages, and then we will switch to the outlook and end with a Q&A. This being said, before Ingrid will start presenting results for the first half year, perhaps looking at some of the highlights of the first six months of the year, no surprise, of course, a lot of attention went to completing the offer on the Cofinimmo shares and having the merger done by 1 July. These are things that maybe zoom in into the integration and the synergies, which probably will be the main attention points at this point in time.

Speaker #2: Now, that being said, before Ingrid could start presenting the results for the first half-year, perhaps looking at some of the highlights of the first six months of the year—and no surprise, of course—a lot of attention went to completing the offer on the confinement shares and having the merger done by the 1st of July.

Speaker #2: These are things that, you know, may be zoomed in on—the integration and the synergies—which probably will be the main attention points at this point in time.

Speaker #2: I think the message is very clear. We are well on track in terms of integration, so XCOM and the board of directors are in place. Country leads have been appointed now for all of the nine countries.

Stefaan Gielens: I think there, the message is very clear. We are well on track in terms of integration. ExCo and board of directors are in place. Country leads have been appointed now for all nine countries. Our target operating model has been updated and is being rolled out throughout the group. We will be in September, start working on the organizational chart, meaning that the N minus one layer will be appointed and teams will be designed in the next coming weeks and months. We have selected all IT systems that we are using and will be using within this new combined group, so we are absolutely on track. The positive thing here also is that it starts to translate into synergies. Based on what we see and know today, we can confirm that we will reach at least EUR 60 million of run rate synergies in 2027.

Speaker #2: Our target operating model has been updated and is being rolled out throughout the group. We will, in September, start working on the organizational chart, meaning that the admin and minus-one layer will be appointed and teams will be designed in the coming weeks and months.

Speaker #2: We have selected all IT systems that we are using and will be using within this new combined group, so we are absolutely on track.

Speaker #2: And the positive thing here also is that it starts to translate into synergies. Based on what we see and know today, we can confirm that we will reach at least €16 million of runway synergies in 2027, but already also expecting that in the course of this year roughly €5 million, or even a bit above €5 million, of runway synergies will already start kicking in in 2026.

Stefaan Gielens: But already also expecting that in the course of this year, roughly EUR 5 million or even a bit above EUR 5 million of run rate synergies will already start kicking in 2026. Other than that, we have not only been working on the AEDIFICA-Cofinimmo integration. I think that the teams stayed in the market and were also active in terms of new investments. Taking into account the summer months during which a couple of these deals have landed, we are now at almost EUR 200 million of new investments, combination of standing assets and projects that we are adding to the development pipeline, and we have seen 13 projects out of the development pipeline being delivered in the first six months. This gives you an idea of what we have been doing. Switching now to the financials.

Speaker #2: Other than that, we've not only been working on the AEDIFICA confinement integration; I think that the themes stayed in the market and were also active in terms of new investments.

Speaker #2: Taking into account the summer months during which a couple of these deals have landed, we're now at almost €200 million of new investments—a combination of standing assets and projects that we're adding to the development pipeline—and we've seen 13 projects out of the development pipeline being delivered in the first six months.

Speaker #2: So, this gives you an idea of what we have been doing. Switching now to the financial side.

Speaker #3: Hello, good morning. So, when we have a look at the income statement, you can see that for the first six months, Aedifica reports an upper earnings per share of €2.71 per share, which is an increase of 5% compared to the first six months of 2025.

Ingrid Daerden: Hello. Good morning. When we have a look on the income statement, you can see that for the first 6 months, Aedifica can report an EPRA earnings per share of EUR 2.71 per share, which is an increase of 5% compared to the first 6 months of 2025. This is demonstrating that the combination of Aedifica and Cofinimmo was EPS accretive from day one. When we look a little bit more into detail in the income statement, you can see that rental income was up at 62%, resulting in an EBIT margin of 86.6%. This EBIT margin is slightly influenced by the fact that some pre-tax items on the Cofinimmo side dated from the pre-change of control and were not included in the income statement. If we calculate a more normalized EBIT margin, we would come to an EBIT margin of 85.5%.

Speaker #3: So this is demonstrating that the combination of AEDIFICA and confinement, plus EPS equities from day one. When we look a little bit more into detail in the income statement, you can see that rental income was up by 62%, resulting in an EBIT margin of 86.6%.

Speaker #3: This EBIT margin is slightly influenced by the fact that some pre-tax items on the confinement side dated from before the change of control and were not included in the income statement.

Speaker #3: If we calculate a more normalized EBIT margin, we would arrive at an EBIT margin of 85.5%. The average cost of debt is still very attractive at 1.9%.

Ingrid Daerden: Average cost of debt is still very attractive at 1.9%. Later onwards, when I talk a little bit about the financial debt, I will also give some outlook how we see this evolving in the coming 2 to 3 years. Going from the EPRA earnings towards the net results, the main items that are included in that calculation are the changes in fair value of the investment properties. Globally, we can say that the valuation of the portfolio is slightly positive, mainly driven by the impact of the UK, the Netherlands, and Spain, based on strong operator performance, but also the indexation.

Speaker #3: Later on, when I talk a little bit about the financial debt, I will also give some outlook on how we see this evolving in the coming two to three years.

Speaker #3: Then, going from the upper earnings towards the net results, the main items that are included in that calculation are the changes in fair value of the investment properties. Globally, we can say that the valuation of the portfolio is slightly positive.

Speaker #3: Mainly driven by the impact of the UK, the Netherlands, and Spain, based on strong operator performance but also the indexation. Then we have the contribution of the bargain purchase price gain, the bargain purchase gain, the so-called BAT bill, which was already included in the income statement at the end of Q1, and which is actually the difference between the equity value of confinement including the PPA adjustments minus the market price of the new issued shares.

Ingrid Daerden: We have the contribution of the bargain purchase gain, the so-called badwill, which was already included in the income statement at the end of Q1, and which is actually the difference between the equity value of Cofinimmo, including the PPA adjustments, minus the market price of the newly issued shares. But in itself, no difference in comparison with the Q1 consolidation. We move over to the integration costs, which are excluded from the EPRA earnings as they are non-recurring and they represent, after the first 6 months, approximately EUR 5 million. Looking a little bit more into the rental income, on a like-for-like basis, there is an increase for the portfolio as a whole of 1.7%. This can be split in 1.9% coming out of the indexation, +0.2% coming out of rent reversion, and -0.4% of the FX impact.

Speaker #3: But in itself, no difference in comparison with the Q1 consolidations. Then we move over to the integration costs, which are excluded from the upper earnings as they are non-recurring, and they represent, after the first six months, approximately €5 million.

Speaker #3: Now, looking a little bit more into the rental income. So, on a like-for-like basis, there is an increase for the portfolio as a whole of 1.7%.

Speaker #3: This can be split into 1.9% coming from indexation, plus 0.2% from rent reversion, and minus 0.4% for the ethics impact.

Speaker #3: When we purely look at the healthcare portfolio, the like-for-like spend is also at plus 1.9%. But we do see differences between the countries, and we will go a little bit through the different countries in which AEDIFICA is invested.

Ingrid Daerden: When we purely look at the healthcare portfolio, the like-for-like stands also at +1.9%. But we do see differences between the countries, and we will go a little bit through the different countries in which Aedifica is invested. First of all, when we have a look on Belgium, you can see that the like-for-like is slightly below what you would expect based on the indexation, and it is slightly influenced by some rent screen negotiations that took place in the Belgium portfolio. We move over to Germany. In Germany, you will see that inflation always kick in with a delay because indexation of the rent contracts only happens when a certain threshold is reached, and it is also capped. So depending on the contract between 60% and 80%.

Speaker #3: So, first of all, when we look at Belgium, you can see that the like-for-like is slightly below what you would expect based on the indexation, and it is slightly influenced by some rent renegotiations that took place in the Belgian portfolio.

Speaker #3: Then we move over to Germany. So, in Germany, you will see that inflation always kicks in with a delay because indexation of the rent contracts only happens when a certain threshold is reached, and it is also capped.

Speaker #3: So, depending on the contract, between 60% and 80%. We do expect that, going forward, like-for-like in Germany will continue to increase, but, like I said, it will never be the full impact of the inflation and will come with some delay.

Ingrid Daerden: We do expect that going forward, like-for-like in Germany will continue to increase, but like it said, it will never be the full impact of the inflation and comes with some delay. We move over to the Netherlands. Netherlands, a very high like-for-like 5.1%. This is influenced, also already mentioned at the end of Q1, there were two assets in the Netherlands where we changed a little bit the business plan, the business model. We went from a B2B model towards a B2C model. This means that we are leasing directly to the residents, and that also means that the rental income goes up. There is also some additional property management costs that are included as well. But what you see here in the top line is the increase of the top line.

Speaker #3: Then we move over to the Netherlands. So, Netherlands are very high like-for-like, 5.1%. This is influenced also, as already mentioned at the end of Q1.

Speaker #3: There were two assets in the Netherlands where we changed the business plan a little bit, the business model. So we went from a B2B model towards a B2C model.

Speaker #3: This means that we are leasing directly to the residents, and that also means that the rental income goes up. There are also some additional property management costs that are included as well.

Speaker #3: But what you see here in the top line is the increase of the top line. When we would exclude those two assets, then the like-for-like of the Netherlands would be slightly below 3%, so more in line with what you would expect based on the inflation.

Ingrid Daerden: When we would exclude those two assets, then the like-for-like of the Netherlands would be slightly below 3%, so more in line with what you would expect based on the inflation. Then we have the UK. UK, a like-for-like of 5%. This is a market where traditionally you will see a floor at 2% and a cap at 4%. Still, we can show a like-for-like above the level of the cap, and that is based on the profit trends and the hardwiring of some of the profit trends that we can realize in the UK following the strong operator performance. Then we move on to Finland. Finland, a low like-for-like 0.4%, related to the fact that almost all lease agreements in Finland are indexed at the beginning of the year, and January had a very low inflation incident.

Speaker #3: Then we have the UK. So UK like-for-like of 5%. This is a market where, traditionally, you will see a floor at 2% and a cap at 4%.

Speaker #3: Still, we can show a like-for-like above the level of the cap, and that is based on the profit rents and the hardwiring of some of the profit rents that we can realize in the UK, following the strong operator performance.

Speaker #3: Then we move over to Finland. Finland alone, like-for-like, 0.4%—related to the fact that almost all these agreements in Finland are indexed at the beginning of the year, and January had a very low inflation in Finland.

Speaker #3: Then we have Ireland and Spain, where we follow the inflation of the country. France is also showing a somewhat lower figure, related—as well as Finland—to the fact that in France at the beginning of the year there was slightly negative indexation, so gradually we do expect that in the course of the year France will start to improve somewhat.

Ingrid Daerden: Then we have Ireland and Spain, where we follow the inflation of the country. France is also showing a somewhat lower figure, related as well as Finland to the fact that in France, at the beginning of the year, there were slightly negative indexations. Gradually we do expect that in the course of the year, France will start to improve somewhat. Then you will see that we report a slightly negative like-for-like on Italy. As a reminder, there are only eight assets in Italy, and there was a lease extension combined with some limited rent reduction that were applied retroactively since the beginning of the year on one asset in Italy. Then we have the offices, negative like-for-like of 1.3%, related to some departures and renegotiations. And then finally, the distribution network, the pubs, that follow the inflation in the lease agreements.

Speaker #3: Then you will see that we report a slightly negative like-for-like on Italy. As a reminder, there are only eight assets in Italy, and there was a lease extension combined with some limited rent reduction that was applied retroactively since the beginning of the year on one asset in Italy.

Speaker #3: Then we have the offices: negative like-for-like of 1.3%, related to some departures and renegotiations. And then finally, the distribution network, so the PEPs, that follow the inflation in the lease agreements.

Speaker #3: Moving over towards our debt-to-asset ratio. At the end of June, AEDIFICA reports a debt-to-asset ratio of 42.7%. This is influenced by the fact that in Q2, there was a payment of the dividend.

Ingrid Daerden: Moving over towards our debt-to-asset ratio. At the end of June, Aedifica reports a debt-to-asset ratio of 42.7%. This is influenced by the fact that in Q2, there was a payment of the dividend. The debt-to-asset ratio is a little bit at the higher end of where we expect it to be. Having said that, we have a financial policy of keeping the debt-to-asset ratio around the 43%, where we consider 45% as the absolute maximum. Then we will talk a little bit about the financial debt. In total, Aedifica has an outstanding financial debt of EUR 5.3 billion. During the first six months, we have been very active on the refinancing. In total, refinancing has been completed for more than EUR 900 million. This is including a new syndicated credit facility, sustainability-linked of more than EUR 600 million.

Speaker #3: So, the debt-to-asset ratio is a little bit at the higher end of where we expected it to be. Having said that, we have a financial policy of keeping the debt-to-asset ratio around 43%, and we consider 45% as the absolute maximum.

Speaker #3: Then we will talk a little bit about the financial gap. So, in total, AEDIFICA has an outstanding financial debt of €5.3 billion. During the first six months, we have been very active on the refinancing.

Speaker #3: In total, refinancing has been completed for more than €900 million. This includes a new syndicated, sustainability-linked credit facility of more than €600 million.

Speaker #3: We have also been negotiating, renegotiating some bilateral credit facilities. And we did work on the short-term treasury notes. So, anticipating the merger with Capinimo on the 1st of July, the CP program of Aedifica has increased in size from €600 million to €1.5 billion, taking into account that the program of Capinimo will stop after the legal merger that happened on the 1st of July.

Ingrid Daerden: We have also been negotiating, renegotiating some bilateral credit facilities, and we did work on the short-term treasury notes. Anticipating the merger with Cofinimmo on 1 July, the CP program of Aedifica has increased in size from EUR 600 million to EUR 1.5 billion, taking into account that the program of Cofinimmo will stop after the legal merger that happens on 1 July. It is our internal policy to have the CP that is outstanding below 20% of the total outstanding debt, and the CP paper is fully covered by committed credit facilities. When we look at the graph, you can see that the combined entity can benefit from diversified sources of funding. Bank financing is representing 44% of our sources of funding, of debt funding and debt capital markets. Including the short-term treasury notes stands at 56%.

Speaker #3: It is our internal policy to have the CP that is outstanding below 20% of the total outstanding debt, and the CP paper is fully covered by committed credit facilities.

Speaker #3: When we look at the graph, you can see that the combined entity can benefit from diversified sources of funding. Bank financing represents 44% of our sources of funding, of debt funding, and debt capital market—so including the short-term treasury notes—stands at 56%.

Speaker #3: When we look at our financial debt KPIs, the main points to highlight are, first of all, the credit rating. Immediately after the change of control, the credit rating was increased to BBB+.

Ingrid Daerden: When we look at our financial debt KPIs, the main points to highlight, first of all, the credit rating. Immediately after the change of control, the credit rating has been increased towards BBB+. During the annual review that took place in July, S&P has reconfirmed this credit rating as a BBB+ with a stable outlook. When we look at the Interest Coverage Ratio, a very strong Interest Coverage Ratio, 7.6 times. Net debt-to-EBITDA slightly went up following the combination with Cofinimmo, so currently at 8.3 times.

Speaker #3: And during the annual review that took place in July, S&P has reconfirmed this credit rating as BBB+ with a stable outlook. Now, when we look at the interest cover ratio, a very strong interest cover ratio—7.6 times.

Speaker #3: Net debt to EBITDA slightly went up following the combination with Capinimo, so currently at 8.3 times. It is important that I mention here that this net debt to EBITDA is not adjusted for the fact that in the debt there is...

Ingrid Daerden: It is important that I mention here that this net debt-to-EBITDA is not adjusted for the fact that in the debt there is already debt included for projects that are still under development, under construction, but for which CapEx has been spent and funded with debt, while the EBITDA is not adjusted for the fact that in the future, this will lead to additional rental income. 61% of all of our financial debt is linked to sustainability KPIs or linked to the sustainability financing framework. The debt is on an unsecured basis, and the average cost of debt, as mentioned, stands at 1.9%. When we look at the debt maturity profile, you can see on this slide that we have currently a debt maturity profile of 3.3 years. There is not a lot of refinancing that still needs to be handled in 2026.

Speaker #1: This is already included for projects that are still under development or construction, but for which CapEx has been spent and funded with debt. While the EBITDA is not adjusted for the fact that in the future this will lead to additional rental income, 61% of all of our financial debt is linked to sustainability KPIs or linked to the sustainability financing framework.

Speaker #1: The debt is on an unsecured basis , and the average cost of debt , as mentioned , stands at 1.9% . When we look at the debt maturity profile , you can see on this slide that we have currently a debt maturity profile of 3.3 years .

Speaker #1: There's not a lot of refinancing that still needs to be handled in 2026. There is plenty of headroom available on the committed credit facilities that can cover the liquidity needs in the business plan, at least up to January 2027.

Ingrid Daerden: There is plenty of headroom available on the committed credit facilities that can cover the liquidity needs in the business plan at least up to January 2026. Having said that, we do believe that it is important that we work on the weighted average debt maturity with the intention to extend it further. We are considering issuing a bond in the H2. Average cost of debt currently of 1.9%. Without taking into account issuing a bond, average cost of debt would stay around 2% in 2026 and 2027, and then gradually start to increase towards 3% by the end of 2028, 2029. If we start to work on the average debt maturity, that process will go a little bit faster.

Speaker #1: Having said that, we do believe that it is important that we work on the weighted average debt maturity, with the intention to extend it further.

Speaker #1: So we are considering issuing a bond in the second year . How average cost of debt currently of 1.9% , without taking into account issuing an bond average cost of debt , would stay around 2% in 26 and 27 , and then gradually start to increase towards 3% by the end of 2028 2029 .

Speaker #1: Now , if we start to work on the average debt maturity , that process will go a little bit faster . So that means that the average cost of debt probably already in 2027 , will be somewhat above the 2% , and that the increase that we are anticipating towards a 3% by the end of 2028 might kick in a little bit faster On the hedging .

Ingrid Daerden: So that means that the average cost of debt probably already in 2027 will be somewhat above 2% and that the increase that we are anticipating towards 3% by the end of 2028 might kick in a little bit faster. On the hedging, there we can say currently we are well protected, with a hedge ratio of 90% and a weighted average hedge maturity of 3.4 years. We have a policy that we should be covered for at least 60% for the coming two to three years. You can see that we are above 60% until the end of 2028. So also considering to work a little bit on additional hedging, starting from 2029 onwards.

Speaker #1: So, there we can say currently we are well protected with the hedge ratio of 90% and a weighted average hedge maturity of 3.4 years.

Speaker #1: We have a policy that we should be covered for at least 60% for the coming two to three years. You can see that we are up above the 60% until the end of 2028.

Speaker #1: So, also considering working a little bit on additional hedging starting from 2029 onwards.

Speaker #2: Thank you, Ingrid. Now, walking you quickly through a couple of features of the portfolio, but also allowing me to zoom in on some of the more key attention points.

Stefaan Gielens: Thank you, Ingrid. Now walking you quickly through a couple of features of the portfolio, but also allowing me to zoom into some of the more key attention points. But maybe starting, first of all, with probably things that you know already quite well, the segment breakdown of the portfolio. As such, there is not much new information on this slide. Maybe pointing out that 75% of the focus of the company today is on elderly care, senior housing, and combinations, which also in the future will remain the core of the portfolio, and the percentage of 75% seems to be a quite healthy percentage.

Speaker #2: But maybe starting, first of all, with probably things that you know already quite well: the segment breakdown of the portfolio.

Speaker #2: As such , there is not much new information on this slide . Maybe pointing out that 75% of the focus of the company today is on elderly care , senior housing , and combinations , which also in the future will remain the core of the portfolio and the percentage of 75% seems to be quite healthy .

Speaker #2: Percentage . Also , as you know , pointing out that 11% is about non-core activities , that will be divested and that will open up a bit more room for diversification within the healthcare space .

Stefaan Gielens: Also, as you know, pointing out that 11% is about non-core activities that will be divested and that will open up a bit more room for diversification within the healthcare space, and then we are targeting, amongst others, cure centers that you also see popping up already today in the portfolio. When looking at the geographical spread of the portfolio, you see both the spread based on the total portfolio, including non-core assets on the slide, which leads to quite high percentage for the Belgian market, 33%. But when looking only at healthcare, you will see that the Belgian market represents 26%, Germany 20%, but all other countries well below 20%, which to us means that this opens really a lot of opportunities to grow in some of the countries that we think are quite promising today.

Speaker #2: And I , we're targeting , amongst pure centers that you also see popping up already today in the portfolio . When looking at the geographical spread of the portfolio , you see both the spread based on the total portfolio , including non-core assets on the slide , which leads to a quite high percentage for the Belgian market during the present .

Speaker #2: When looking only at healthcare , you will see that the Belgian market represents 26% . Germany , 20% , but all other countries well below 20% , which to us means that this opens really a lot of opportunities to improve in some of the countries that we think are quite promising today .

Speaker #2: And you heard me say, and quoting in the past, that countries like Ireland, the UK, Spain, and Southern Europe are looking quite promising to us, and we do not have a lot of exposure in most of these countries to date.

Stefaan Gielens: And you heard me saying or quoting in the past that countries like Ireland, UK, Spain, Southern Europe, are looking quite promising to us, and we do not have a lot of exposure in most of these countries today. Then switching to what I consider to be one of the key messages of today's webcast is basically confirming that the positive trend that we have seen in Europe in terms of improving operator performance is clearly continuing and is clearly confirmed also this time. Looking at our exposure, well, no surprises there. If you look at the top 10, you will find somewhat bigger European, very often French origin players, that are also in our portfolio. You will find a lot of local heroes in the portfolio, and you will see some not-for-profit, even public operators popping up, like for instance, the Finnish municipalities.

Speaker #2: Then, switching to what I consider to be one of the key messages of today's webcast, it's basically confirming that the positive trend we've seen in Europe in terms of improving operating performance is clearly continuing and is clearly confirmed.

Speaker #2: Also , this time , looking at our exposure , well , no surprises there . If you look at the top ten , you will find somewhat bigger European , very often French origin players .

Speaker #2: That are also in our portfolio . You will find a lot of local heroes in the portfolio and you will see some not for profit , even public operators popping up .

Speaker #2: Like for instance , the Finnish municipalities , all in all , I think this is a very well diversified portfolio , not showing any overexposure on one of the specific groups , but then switching , I think , to the underlying numbers , which are even more important .

Stefaan Gielens: All in all, I think this is a very well-diversified portfolio, not showing any overexposure on one of the specific groups. But then switching, I think, to the underlying numbers, which are even more important. First of all, occupancy. I think I should stop saying that occupancy recovered in Europe post-COVID, because we are now back at levels that we have seen pre-COVID. If you look at the average for the care homes in the portfolio for which we have sufficient information, we are now at 91% occupancy. So I think that we totally normalized, in that respect. We have also seen that over the period in most of the countries, occupancy kept improving and is now at very healthy levels in all the countries, once again, for which we have sufficient information.

Speaker #2: Now, first of all, occupancy. I think I should stop saying that occupancy recovered in Europe post-COVID, because they're now back at levels that we saw pre-COVID.

Speaker #2: If you look at the average for the care homes in the portfolio for which we have sufficient information, we're now at 91% occupancy.

Speaker #2: So I think that we totally normalized in that respect. We also saw that over the period, in most of the countries, occupancy kept improving.

Speaker #2: And is now at a very healthy level in all the countries . Once again , for which we have sufficient information . And even when we look at the public available numbers from the bigger players , like Clarion and Attendo , we do see these similar healthy occupancy levels popping up .

Stefaan Gielens: Even when we look at the publicly available numbers from the bigger players like Korian, Emeis, and Attendo, we do see these similar healthy occupancy levels popping up. So I think that in that respect, the market is totally back to a normal situation, and that the pressure from the aging population, that will accelerate, by the way, in the second half of 2020s, will probably keep putting upwards pressure on these numbers. That translates in very strong rent covers throughout the portfolio. What you see on the slide are the countries for which we have sufficient information. I can confirm that it is and remains the ambition of the company to keep improving the quality of that information, also meaning working towards the point in time that we can offer that type of information for all of the countries that we are in.

Speaker #2: So I think that in that respect , the market is totally back to normal situation and that the pressure from the aging population that will accelerate , by the way , in the second half of 20 will probably keep putting pressure on upwards , pressure on these numbers , but that translates in very strong rent covers throughout the portfolio .

Speaker #2: What you see on the slide are the countries for which we have sufficient information, and I can confirm that it is, and remains, the ambition of the company to keep improving the quality of that information.

Speaker #2: Also meaning working towards the point in time when we can offer that type of information for all of the countries that we're in.

Speaker #2: But based on what we know today, I think this shows a very good, well, average of what you see happening in Europe, with the very strong rent covers that we see in the UK and Ireland.

Stefaan Gielens: Based on what we know today, I think this shows a very good average of what we see happening in Europe with the very strong rent covers that we see in the UK and Ireland. Also ramping up in countries like Ireland and, for instance, Spain, which is not on the slide. Going very quickly once new premises are being delivered. Also, the Netherlands are now showing a quite strong rent cover, even though you would probably have noticed that the country has a somewhat lower occupancy rate, but nevertheless, that allows the operator to come with a very strong rent cover. Then the countries that probably suffered a bit more from the COVID experience and everything that happened in 2022, Belgium and Germany. But Germany back at 1.5, which we consider to be a normal rent cover.

Speaker #2: Also ramping up in countries like Ireland. And for instance, Spain, which is not on the list, is growing very, very quickly once new premises are being delivered.

Speaker #2: Also the Netherlands are now showing up quite strong rent over , even though you would have probably have noticed that the country has a somewhat lower occupancy rate , that nevertheless , that allows the operator to come with a very strong rent cover and then the countries that probably suffered a bit more from the Covid experience and everything that happened in 2022 , Belgium and Germany , that Germany back at 1.5 , which we considered to be a normal rent cover , Belgium at 1.4 , which we believe is a decent rent cover but should improve in the future .

Stefaan Gielens: Belgium at 1.4, which we believe is a decent rent cover that should improve in the future. All in all, I think Europe is now showing once again a quite strong operator performance throughout the portfolio. A couple of other slides now. Lease maturity, no surprises to what you have seen in the Q1 updates. So the average hold of the portfolio standing at 15 years. If you just zoom into the healthcare portfolio, it is 16 years. You also see on the slide what is the situation in all of the countries for the healthcare portfolio, with typically countries close to 20 or even above 20 years old. Typically countries where you have quite long initial durations, and then some of the countries are showing a somewhat lower growth, typically countries where initial lease terms are somewhat shorter.

Speaker #2: But all in all, I think Europe is now showing, once again, a quite strong operating performance throughout the portfolio. A couple of other slides now—lease maturity.

Speaker #2: No surprises to what you've seen in the first quarter. Update: So, the average maturity of the portfolio is standing at 15 years.

Speaker #2: If you just zoom into the healthcare portfolio, it is 16 years. You also see on the slide what is the situation in all of the countries for the healthcare portfolio?

Speaker #2: We typically see a country's average close to 20 or even above 20 years old. Typically, countries where you have quite long initial durations, and then some of the countries are showing a somewhat lower volatility.

Speaker #2: Typically , countries who are initial lease terms are somewhat shorter then going into the fields on third value . And then initially switching to the like for like , which is probably more interesting .

Stefaan Gielens: Then going into the yield on fair value, immediately switching to the like-for-like, which is probably more interesting. Looking at the whole of the healthcare portfolio, we are now. Actually, I should say the whole of the portfolio, we are now at 6% average yield on fair value. As I said, switching maybe immediately to the like-for-like portfolio valuation. What you see on the slide, starting on the left side of the slide, is the evolution quarter to quarter. Knowing that since Q1 2026, you also will find the impact of the Cofinimmo portfolio, including non-core assets, offices, and pubs. You will see that in Q2 2026, we have seen a 0.1% positive like-for-like valuation. If you would zoom into only the healthcare portfolio, these numbers become 0.27% for Q1 and 0.15% for Q2.

Speaker #2: But looking at the whole of the healthcare portfolio, we are now actually—I should say the whole of the portfolio—we are now at a 6% average yield on fair value.

Speaker #2: But as I said , switching maybe immediately to the like for like portfolio valuation , what you see on the slide , starting on the left side of the slide is the evolution quarter to quarter , knowing that since the first quarter of 2026 , you also will find the impact of portfolio , including the non-core assets , offices and pubs .

Speaker #2: And you will see that in the second quarter of 2026 , we've seen a 0.1% positive like like valuation . If you would zoom in to only the healthcare portfolio , these numbers become 0.27% for the first quarter and 0.15% for the second quarter .

Speaker #2: So it shows the stronger underlying performance of the healthcare assets . And then looking at a six month period , which leads to a somewhat different scope from the Q to queue analysis , then you will find that healthcare valuation increased with 0.5% , and it gives you an overview of what is happening in the countries with perhaps no surprise , the UK popping out based on the very strong operating performance in the country , but also the Netherlands , probably for the similar reasons as what we just did when she zoomed in to the like for like rental growth .

Stefaan Gielens: It shows the stronger underlying performance of the healthcare assets. Looking at a six-month period, which leads to a somewhat different scope from the Q to Q analysis, you will find that healthcare valuation increased with 0.5%. It gives you an overview of what is happening in the countries with perhaps no surprise, the UK popping out based on the very strong operator performance in the country, but also the Netherlands, probably for the similar reasons as what Ingrid just explained when she zoomed into the like-for-like rental growth. If you add to the healthcare portfolio, the offices and distribution where we have seen some slightly negative valuation, then for the whole of the portfolio, you will find that during H1, like-for-like valuation increased to 0.35%. I think the message is clear. Valuation remains very stable, slightly increased into this market.

Speaker #2: If you add to the healthcare portfolio , the offices and distribution where we see some slightly negative valuation , and for the whole of the portfolio , you will find that during the first half year , like for like valuation increased 0.35% , I think the message is clear valuation remains very stable , slightly , slightly increasing in today's market .

Speaker #2: And quick zoom on the non-core assets . I'm not going to walk you through every number on the slide , but importantly , I think for more important , when looking at the offices , as you know , this is a portfolio that today is very much focused on Brussels CBD showing a 6.3% fair value yield .

Stefaan Gielens: Then quick zoom on the non-core assets. I am not going to walk you through every number on the slide. Importantly, I think more important when looking at the offices, as you know, this is a portfolio that today is very much focused on Brussels CBD, showing a 6.3% fair value yield. We are looking at the distribution networks. This is the Belgian-Dutch portfolio, where we have some asset rotation ongoing, and each time we are able to sell these assets above fair value, looking at the fair yield of 7.4%. Now, I am going to use this slide to zoom into our divestment ambitions, because we are now talking about the non-core assets in the portfolio.

Speaker #2: And when looking at the distribution networks , this is the Belgian Dutch portfolio where we have some asset rotation ongoing . And each time we are able to sell these assets above our value .

Speaker #2: Looking at the fair use of 7.4%. Now I'm going to use this slide to zoom into our divestment ambitions, because we're now talking about non-core assets in the portfolio.

Speaker #2: I think it's very clear that we can, in terms of priorities, start with the €300 million of Belgian care homes that we need to sell because of the requirements coming from the Belgian competition authorities.

Stefaan Gielens: I think it is very clear that we can, in terms of priorities, start with the EUR 300 million of Belgian care homes that we need to sell, because of the requirements coming from the Belgian competition authorities. This is by far our first priority in terms of divestments. Situation today is quite clear. We have identified the portfolio that we will be selling. Vendor due diligence is in place. Structuring is in place. Tax rulings are being applied for. Today, we are still in an off-market lease, meaning we have very limited contacts with the very selected number of interested parties with whom we are talking.

Speaker #2: This is by far our first priority in terms of divestments. The situation today is quite clear. We have identified the portfolio that we will be selling, and vendor due diligence is in place.

Speaker #2: Structuring is in place, tax rulings are being applied for. And today, we are still in an off-market phase, meaning we have very limited contacts with a very selected number of interested parties with whom we are talking.

Speaker #2: But if that does not give us sufficient certainty that we will be able to land the deal within the period that we want to see the deal landing, we'll go into that immediately.

Stefaan Gielens: But if that does not give us sufficient certainty that we will be able to land the deal within the period that we want to have seen the deal landing, and we are going to that immediately, then we still can switch to a structured, more public open market process. As we speak right now, it is totally off-market. The ambition of the company is very clear. We want to see land this deal into Q1 2027. Then going to the offices, which probably is our second priority in terms of divestments. There, the situation today is that we are focusing within the company on building a business plan for the whole of the portfolio so that we can market the portfolio as a whole, but based on our own assumptions, and our own assumptions also about the future potential of this portfolio.

Speaker #2: Then we still can switch to a structured , more public open market process . But as we speak right now , it is still clear off market .

Speaker #2: The ambition of the company is very clear . We want to see land this deal at in Q1 2027 . Then going to the offices , which probably is our second priority in terms of divestments there .

Speaker #2: The situation today is that we are focusing within the company on building a business plan for the whole of the portfolio. We can market the portfolio as a whole, but based on our own assumptions—and our own assumptions.

Speaker #2: Also about the future potential of this portfolio , we have off market contacts . So we are being approached by parties that we think are very valid investors or investors in this portfolio , but it is totally off market at this point in time .

Stefaan Gielens: We have off-market contacts, so we are being approached by parties that we think are very valid co-investors or investors in this portfolio. But it is totally off-market at this point in time. No intention to start any structured process in the very near future, preferring to keep working off-market at this point in time. Ambition there is also very clear. We want to see this land in 2027. Not specifying which quarter, probably will be more towards the end of 2027, but we are working with that timeline in mind. Then finally, talking about the pubs. Well, no pun intended, but that we have put on ice today. It is not our priority at this point in time to sell off the pubs. There is a lot of interest coming to that part of the portfolio.

Speaker #2: No intention to start any structured process in the very near future, preferring to keep working off-market at this point in time.

Speaker #2: Ambition. There is also very clear, we want to see this land in 2027—not specifying which quarter; probably it will be more towards the end of 2027, but we're working with that timeline in mind.

Speaker #2: And then finally talking about what's but no pun intended , but that we have put on ice today . It's not our priority at this point in time to sell off the pubs .

Speaker #2: There is a lot of interest flowing to that part of the portfolio, but for lots of reasons, it's not our first priority.

Stefaan Gielens: But for lots of reasons, not our first priority, and amongst those reasons, also the fact that it is a quite high-yielding portfolio, so we are not in a hurry to sell that portfolio today. Now, having added some color to the divestment program, of course, when we start divesting and recycling capital, we do have to make sure that we are able to redeploy that capital. So looking at the portfolio growth in terms of developments and investments. Well, basically, we are working with some sort of three-layer approach of the market. I think the first layer of the future growth of the Aedifica Healthcare portfolio is coming from the development pipeline. We are constantly refueling the pipeline. We target a pipeline on average of EUR 500 to EUR 750 million at each point in time.

Speaker #2: And amongst those reasons, also the fact that it is quite a high-yielding portfolio. So we're not in a hurry to sell that portfolio today.

Speaker #2: Now, having given some added color to the divestment programme—of course, when we start divesting and recycling capital, we will have to make sure that we are able to redeploy that capital, so we are looking at that.

Speaker #2: The portfolio growth in terms of developments and investments , well , basically we're working with some sort of three layer approach of the market .

Speaker #2: I think the first layer of the future growth of the Aedifica healthcare portfolio is coming from the development pipeline. We are constantly refueling the pipeline.

Speaker #2: We target a pipeline on average of €500 million to €750 million at each point in time. It is normally rotating relatively fast compared to the past.

Stefaan Gielens: It is normally rotating relatively fast compared to the past at this point in time, and we are targeting 6.5 yields on costs when talking about refueling the development pipeline. There is a next slide that will zoom into the pipeline as is today. But on top of that, teams are working, and this is what we call our daily ongoing investment activity. So they are working on acquiring standing assets, focusing on small to medium-sized portfolios. Could be from a single asset to smaller portfolios. You probably have seen popping up some examples in H1 of this year. Of course, the advantage here is that it is immediately cash flow generating, and that allows us also to make sure that the deals that we do should also immediately be EPS accretive.

Speaker #2: At this point in time , and we're targeting €6.5 on costs . When talking about refueling , the development pipeline , there is a next slide that we'll zoom into the pipeline as is today .

Speaker #2: But on top of that, teams are working, and this is what we call our daily ongoing investment activity. So they're working on acquiring standing assets, focusing on small- to medium-sized portfolios, which could be anything from a single asset to smaller portfolios.

Speaker #2: You probably have seen popping up some of some examples in the first half of this year . Of course , the advantage here is that it's an easy cash flow generating .

Speaker #2: And that allows us also to make sure that the deals that we do should also immediately be EPS accretive , and then thirdly , bearing in mind that the numbers in terms of divestments become a bit bigger once you start thinking about the office portfolio , we are also working on potential M&A deals , meaning large scale opportunities .

Stefaan Gielens: And then thirdly, bearing in mind that the numbers in terms of divestment become a bit bigger once you start thinking about the office portfolio. We are also working on potential M&A deals, meaning large-scale opportunities. We have a set of targets that we keep monitoring, and that we can accelerate if needed or if we see that the divestment program is also accelerating. That is the way that we are approaching the combination of the divestments that we need to do and the investment that needs to follow to make sure that we remain accretive or limited dilution coming from timing gaps between divestments and investments. Mentioned the development pipeline. You have probably seen the numbers in the press release this morning. A couple of things to point out here.

Speaker #2: We have a set of targets that we keep monitoring and that we can accelerate if needed, or if we see that the divestment program is also accelerating.

Speaker #2: So that's the way that we are approaching the combination of the divestments that we need to do and the investment that needs to follow, to make sure that we remain accretive, or that there is only limited dilution coming from timing gaps between divestments and investments mentioned in the development pipeline.

Speaker #2: You've probably seen the numbers in the press release this morning. A couple of things to point out here: there's a lot of focus right now on the Spanish market in terms of new developments.

Stefaan Gielens: There is a lot of focus right now on the Spanish market in terms of new developments, also on Finland and the UK. You also see Germany popping up again with a more important number. That is basically a combination of projects that we are looking at, but also typically in the German market, standing assets for which we already have signed a commitment to purchase that we are waiting for some of the conditions to be fulfilled. They pop up to the development pipeline. This being said, when looking at when these assets will be delivered, there is a lot that still is going to happen in 2026, but also in 2027. If you look at the amount of buildings or projects that will be delivered in the next, probably maximum 18 months, we are talking above EUR 450 million. So that itself already is compensating for the divestment of the Belgian care home portfolio.

Speaker #2: Also on Finland and the UK, you also see Germany popping up again with a more important number that is basically a combination of projects that we're looking at.

Speaker #2: But also, typically in the German market, at least standing assets for which we already have signed a commitment to purchase, we're waiting for some of the conditions to be fulfilled.

Speaker #2: They pop up in the development pipeline. This being said, when looking at when one of these assets will be delivered, there's a lot that still is going to happen in 2026, but also in 2027.

Speaker #2: If you look at the amount of buildings or projects that will be delivered in the next, probably maximum, 18 months, we're talking about €450 million.

Speaker #2: So that needs help . Already . Is compensating for the divestment of the Belgian portfolio . And then I think another very important well , feature of this pipeline is , is it's not speculative development .

Stefaan Gielens: And then I think another very important, well, feature of this pipeline is it is not speculative development. All of the projects that we are starting are 100% pre-let, we are not taking any risks there. In terms of yields on costs, we had a minor setback because of some legacy deals in Spain, which is now bringing the yield on cost to 5.8%, knowing that we already were at 6.5%, but we are working to bring it back as soon as possible to 6.5%, knowing that we are targeting a 6.5% yield on cost on all new deals that we are adding. Well, when I say 6.5 on average, on all new deals that we are adding to the pipeline. But that is, as I already mentioned, work in progress. And then this brings us to the outlook. I will let Ingrid go into that.

Speaker #2: All of the projects that we are starting are 100% pre-let to avoid taking any risks there in terms of yield on cost. We had a minor setback because of some legacy deals in Spain, which is now bringing the yield on cost to 5.8%.

Speaker #2: Knowing that we already were at 6.5%, but we're working to bring it back as soon as possible to 6.5%. Knowing that we are targeting a 6.5% year-on cost on all new deals that we're adding.

Speaker #2: When I say 6.5 on average, on all new deals that we're adding to the pipeline, but that is, as I already mentioned, a work in progress.

Speaker #2: And then, this brings us to the outlook. I will let Ingrid go into that.

Speaker #1: Okay, so the outlook, as you have probably all seen, the guidance for the full year 2026 that the company has given this morning is €5.35 per share.

Ingrid Daerden: Okay. So the outlook, as you have probably all seen, the guidance for the full year 2026 that the company has given this morning is EUR 5.35 per share. This is slightly above the consensus in the market that stood at EUR 5.33 per share and represents an increase of 4% compared to 2025. So DPS, there we already announced at the Q1 results publication that we are expecting a dividend of EUR 4.20 per share for the full year 2026. So this outlook takes into account a rental income of EUR 656 million and EPRA earnings of EUR 436 million. We expect that by year-end, the debt-to-asset ratio will be close to the 42%. There is already impact from the synergy savings. So for the full run rate synergies, we expect EUR 60 million in the course of 2027.

Speaker #1: This is slightly above the consensus in the market, which stood at €5.43 per share, and represents an increase of 4% compared to 2025.

Speaker #1: The DPS there—we already announced at the Q1 results publication that we are expecting a dividend of €4.20 per share for the full year 2026.

Speaker #1: Now , this outlook takes into account rental income of 656 million and upper earnings of 436 million . We expect that by year end to debt to asset ratio will be close to the 42% .

Speaker #1: There is already impact from the synergy savings. So for the full run-rate synergies, we expect €16 million in the course of 2027.

Speaker #1: But in the second year, half of 26, we expect that there will already be an impact of €5.5 million. When we look at the asset rotation...

Ingrid Daerden: But in the H2 of 2026, we expect that there will already be an impact of EUR 5.5 million. When we look at the asset rotation, the business plan includes the, I would say, the ongoing asset rotation that is around EUR 110 million, out of which half of it has already been done at this point in time. Stefaan has commented on the strategy for the Belgian healthcare, so there will be no impact of the disposal of the Belgian healthcare assets on the rental income in 2026. The average cost of debt in this business plan is estimated to be around 1.9%. I explained earlier in this presentation that we might consider issuing a bond in autumn. That will lead to some additional financial charges, but would still be able to get to the EPRA EPS of EUR 5.35 earnings per share.

Speaker #1: So the business plan includes the I would say , the ongoing asset rotation . That is around 110 million , out of which half of it has already been done at this point in time .

Speaker #1: Stefan has commented on the strategy for the Belgian healthcare. So, there will be no impact from the disposal of the Belgian healthcare assets on the rental income in 2026.

Speaker #1: The average cost of debt in this business plan is estimated to be around 1.9%. I explained earlier in this presentation that we might consider issuing a bond in autumn, which will lead to some additional financial charges, but we would still be able to get to the EPS of €5.315 earnings per share.

Speaker #1: We did not include assumptions in the business plan . As usual on portfolio evaluation , and GDP is estimated at 1.5 . We continue to repeat that we believe that the fundamentals in our sector for elderly care are still very strong .

Ingrid Daerden: We did not include assumptions in the business plan as usual on portfolio valuation, and GBP is estimated at 1.15. We continue to repeat that we believe that the fundamentals in our sector for elderly care are still very strong. First of all, there is a demand that is driven by the demographic evolution, but there will also be a replacement of outdated stock that will drive demand for new care facilities. Secondly, this is backed by the improving operator performance that we see that is still continuing in all of the countries where we are currently present.

Speaker #1: First of all, there is a demand that is driven by the demographic evolution. But there will also be replacement of outdated stock that will drive demand for new care facilities.

Speaker #1: Secondly, this is backed by the improving operator performance that we see. That is still continuing in all of the countries where we are currently present. Taking all of these elements into account, I think that we can round it up, and it's up to me to invite you to the Capital Markets Day.

Ingrid Daerden: Taking all of these elements into account, I think that we can round it up and it is up to me to invite you to the Capital Markets Day, that will be organized at the end of November, and where we will give you a little bit more insight in the strategy and how we see Aedifica evolving in the coming months and years. I think we can open the Q&A, at this point in time.

Speaker #1: That will be organized at the end of November, where we will give you a little bit more insight into the strategy and how we see a difficult period evolving in the coming months and years.

Speaker #1: I think we can open the Q&A at this point in time.

Speaker #3: If you wish to ask a question, please dial the pound key followed by five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial the pound key followed by six on your telephone keypad.

Operator: If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. Please limit your questions to 2. You can also use the chat box below the player for written questions. The next question comes from Vivian Mackay from Degroof Petercam. Please go ahead.

Speaker #3: Please limit your questions to two. You can also use the chat box below. The player for written questions. The next question comes from Vivien Mackay from Degroof Petercam.

Speaker #3: Please go ahead .

Speaker #4: Yes . Good morning . Thanks for the presentation . So two questions on my end . Maybe the first one is on the off market .

Vivian Mackay: Yes. Good morning. Thanks for the presentation. So two questions on my end. Maybe the first one is on the off-market, on-market comment of the healthcare portfolio. Just trying to understand at what point and what will be the criteria to adapt from an off-market to an on-market structure approach for the portfolio. If I understood correctly, you aim to get that done by the summer, if I heard correctly, for the healthcare portfolio. What timeframe do you have in mind to switch from off-market to an on-market structure?

Vivien Maquet: Yes. Good morning. Thanks for the presentation. So two questions on my end. Maybe the first one is on the off-market, on-market comment of the healthcare portfolio. Just trying to understand at what point and what will be the criteria to adapt from an off-market to an on-market structure approach for the portfolio. If I understood correctly, you aim to get that done by the summer, if I heard correctly, for the healthcare portfolio. What timeframe do you have in mind to switch from off-market to an on-market structure?

Speaker #4: On market comment of the healthcare portfolio . Just trying to understand at what point and what will be the criteria to , to , to , to adapt from an off market to an on market structure approach for the portfolio .

Speaker #4: If I understood correctly , you aim to get that done by , by the summer . If I heard correctly for the healthcare portfolio .

Speaker #4: So, what time frame do you have in mind to switch from off-market to a non-market structure?

Speaker #2: Okay. Without going into too many details, because if we start explaining our strategy in too much detail, it could in the end be held against us.

Stefaan Gielens: Without going into too many details, because if we start explaining in too much detail our own strategy that could in the end be held against us. This being said, the main criteria will be due certainty and timing. The off-market process that we are running is really limited to a very small number of investors that might have an interest in this portfolio. It has also allowed us to structure the whole portfolio, make sure that we have the right assets in place, make sure that we have the right structure in place. It also allowed us to come up with this tax ruling that we have applied for, so that is also one of the positive benefits coming from these off-market conversations.

Speaker #2: But this being said , the main criteria that will be due certainty and timing and the off market process that we are running is really limited to , to a very small number of investors that might have an interest in this portfolio has also allowed us to structure the whole portfolio , make sure that we have the right assets in place , make sure that we have the right structure in place .

Speaker #2: It also allowed us to come up with these tax rulings that we have applied for, so that is also one of the positive benefits coming from these off-market conversations.

Speaker #2: But at a certain point in time , you need to you need to have due certainty , meaning that this will lead to something and you're not just talking for the sake of talking .

Stefaan Gielens: But at a certain point in time, you need to have due certainty, meaning that this will lead to something and you are not just talking for the sake of talking. Secondly, timing. I mentioned that the ambition is to see this land somewhere in Q1 2027. That means that if you do not have the due certainty we want coming out of these off-market talks, we still have the opportunity to switch to a structured process. Without being too specific, but it means that a structured process, if needed, could start before the end of the year.

Speaker #2: And secondly , timing , I mentioned that the ambition is to see this land somewhere in Q1 2027 . So that means that if you do not have the certainty we want coming out of this off market talks , we still have the opportunity to switch to a structured process , and okay , without being too specific , but it means that a structured process , if needed , could start before the end of the year

Speaker #4: Okay . Thank you . Very clear . Then maybe just on the operator operator profitability . So you commented that indeed , with the occupancy .

Vivian Mackay: Okay. Thank you. Very clear. Then maybe just on the operator profitability. You commented that indeed we see improved occupancy, but if I compare rent cover versus end of the year, I see some slight decreasing left and right, very small, but just trying to get the full picture there, if you can, on what you see from operator profitability. Thank you.

Vivien Maquet: Okay. Thank you. Very clear. Then maybe just on the operator profitability. You commented that indeed we see improved occupancy, but if I compare rent cover versus end of the year, I see some slight decreasing left and right, very small, but just trying to get the full picture there, if you can, on what you see from operator profitability. Thank you.

Speaker #4: But if I compare rank versus end of the year, I see some slight decreases left and right, very small, but I'm just trying to get the full picture there.

Speaker #4: If you can, what do you see from operator profitability? Thank you.

Speaker #2: Yeah . But yes , but I think that we're now reaching the point . I mentioned that I should stop talking about a market recovering from Covid and everything that happened in 22 and 23 .

Stefaan Gielens: Yeah. Okay. I think that we are now reaching the point I mentioned that I should stop talking about a market recovering from COVID and everything that happened in 2022 and 2023. It is now a market that is going into, I think, more normal business mode, which means that in some countries, in terms of occupancy and rent cover, you will start to see kicking in some, for instance, seasonality, what we already saw before COVID. Meaning that, I am not one to sound too cynical, but winter or very hot summers can lead to a bit of excess mortality, which then will reflect in the numbers, depending on what your cut-off date is. What we now see in the numbers is nothing that makes us believe that there is a change in the trend. Far from it.

Speaker #2: It's now a market that's growing into , I think , more normal business mode , which means that in some countries , in terms of occupancy and rent cover , you will start to see kicking in some , for instance , seasonality , what we already saw before Covid , meaning that and not want to sound too cynical , but winter or very hot summers can lead to a bit of excess mortality , which then will reflect in the numbers depending on what your cutoff date is .

Speaker #2: So what we now see in the numbers is nothing that makes us believe that there is a change in the trend. Far from it.

Speaker #2: It's more things that we also saw before Covid . Referring to . In some cases , some seasonality Maybe also pointing out that if you look at the underlying trend in most of the countries where occupancy was a bit lower , it keeps improving a lot .

Stefaan Gielens: It is more things that we also saw before COVID, referring to, in some cases, some seasonality. Maybe also pointing out that if you look at the underlying trends in most of the countries where occupancy was a bit lower, it keeps improving a lot. You see that the drivers, meaning that there is more demand coming from the market, and a market where there has not been a lot of supply over the past couple of years, is putting pressure on occupancy. We do see in countries like, for instance, Spain and the UK, that operators still are able to, because of the pricing power they have, to show very strong margins. The trend remains totally intact.

Speaker #2: So you see that the drivers—meaning that there's more demand coming from the market, and the market, where there hasn't been a lot of supply over the past couple of years, is putting pressure on occupancy.

Speaker #2: And we do see in countries like , for instance , Spain and the UK , that operators still are able to well , because of the the pricing power they have to show very strong margins .

Speaker #2: So the trend remains totally intact.

Speaker #4: Thank you. Very clear. Appreciate it.

Vivian Mackay: Thank you. Very clear. Appreciate it.

Vivien Maquet: Thank you. Very clear. Appreciate it.

Speaker #3: The next question comes from Stephen Boumans from ABN Amro. Otto, please go ahead.

Operator: The next question comes from Steven Boumans from ABN AMRO. ODDO BHF, please go ahead.

Speaker #5: Hi . Good morning . Thank you for taking my questions . I have two parts to them separately . The first is on the Netherlands .

Steven Boumans: Hi. Good morning. Thank you for taking my questions. I have two. Let's do them separately. The first is on the Netherlands. Over 5% like-for-like growth, and positive revaluation seems very strong. Could you please provide some more color if we can see more of this going forward, especially you mentioned the contribution from chasing B2B to B2C. So what proportion of the portfolio is currently B2C, and how can we see that mix evolving going forward? It's a Dutch thing or maybe more than that?

Steven Boumans (ABN AMRO: Hi. Good morning. Thank you for taking my questions. I have two. Let's do them separately. The first is on the Netherlands. Over 5% like-for-like growth, and positive revaluation seems very strong. Could you please provide some more color if we can see more of this going forward, especially you mentioned the contribution from chasing B2B to B2C. So what proportion of the portfolio is currently B2C, and how can we see that mix evolving going forward? It's a Dutch thing or maybe more than that?

Speaker #5: Over 5% like for like growth and valuation seems very strong . Could you provide some more color if we can see more of this going forward , especially you mentioned the contribution from facing B to B to B to C .

Speaker #5: So at what proportion of the portfolio is currently B to C, and how can we see that mix evolving going forward? Is it a Dutch thing or maybe more than that?

Speaker #2: Yeah . Okay . But I first of all , I appreciate that you appreciated the growth in the Netherlands , but this is , amongst other things , the result of an experiment that we're running .

Stefaan Gielens: Well, first of all, I appreciate that you appreciate the growth in the Netherlands, but this is, amongst other things, the result of an experiment that we're running. Well, experiment is maybe the wrong choice of words. As you very well know that in the Netherlands, a lot of the institutional investors that are looking into healthcare real estate, they are applying more a B2C model where they acquire buildings and go into a relationship as landlords directly with the end user, so the people living in the buildings. And the operators being some third party providing care, but are not becoming the tenants of these landlords.

Speaker #2: But experiment is made the wrong choice of words . But as you very well know that in the Netherlands , a lot of the of the institutional investors that are looking into healthcare , estate , they are applying more a B2C model where they acquire buildings and go into a relationship as landlord directly with the end user .

Speaker #2: So, the people living in the buildings and the operators being some third party providing care, but are not becoming the tenants of these landlords.

Speaker #2: Given the fact that that it's very something that we see a lot in the Netherlands , we had a look at a couple of the buildings that we own that are basically also more focusing on independent living , where we could apply a similar model .

Stefaan Gielens: Given the fact that it's something that we see a lot in the Netherlands, we had a look at a couple of the buildings that we own that are basically also more focusing on independent living, where we could apply a similar model. And having run the numbers and talked to people in the market, came to the conclusion that it will, if you do it well, of course, it will have a positive impact on your rental income. So basically, I'm talking net after costs, you get a bit more current cash flow out of it. And secondly, it has a positive impact on valuation, because for lots of appraisers, you're basically showing to them that this building has a value in terms of lot for lot sales, which has a positive impact on valuation.

Speaker #2: And having run the numbers and talk to people in the market , came to the conclusion that it will well , if you do it well , of course it will have a positive impact on your rental income .

Speaker #2: So basically , and talking net after costs , you get a bit more current cash flow out of it . And secondly , it has a positive impact on valuation because for lots of appraisers , you're basically showing to them that this building has a value in terms of lot for lot sales , which has a positive impact on valuation .

Speaker #2: So we started turning , if I'm not mistaken , three buildings in Eindhoven from a master release with the operator into A , B2C model where we are the landlord having a relation directly to all of the people living in the building , but having also some sort of master agreement in place with the operator that will be providing the services .

Stefaan Gielens: So we started turning, if I'm not mistaken, three buildings in Eindhoven from a master lease with the operator into a B2C model where we are the landlords having a relation directly to all of the people living in the building, but having also some sort of master agreement in place with the operator that will keep providing the services. It's something that we think we might be doing more if this goes well in the portfolio in the Netherlands. Whether it opens up possibilities to other countries, that remains to be seen. It's really going to depend on local markets.

Speaker #2: It . It's something that we think we might be doing more . If this goes well in the portfolio in the Netherlands , whether it opens up possibilities to other countries , that remains to be seen .

Speaker #2: It really will depend on local markets.

Speaker #5: Okay. Clear. Let's see if we see more of that in the Netherlands, then a different question on Belgium: the €300 million disposals.

Steven Boumans: Okay, clear. Let's see if we see more of that in the Netherlands. Then a different question on Belgium. The EUR 300 million disposals, could you provide some color whether you expect that to be the disposals anything neutral, anything accretive or dilutive versus year-end 2025 NAVs? What assumptions on expected price exit yields underpin that broadly?

Steven Boumans (ABN AMRO: Okay, clear. Let's see if we see more of that in the Netherlands. Then a different question on Belgium. The EUR 300 million disposals, could you provide some color whether you expect that to be the disposals anything neutral, anything accretive or dilutive versus year-end 2025 NAVs? What assumptions on expected price exit yields underpin that broadly?

Speaker #5: Could you provide some color , whether you expect that to be at the disposals ? And if you neutral and if you accretive or dilutive versus year end 25 navs and what assumptions on expected price exit use underpin that ?

Speaker #5: Broadly

Speaker #2: Yeah. And for one other reason, the line is a bit less clear, so I didn't really understand everything you were asking about.

Stefaan Gielens: Yeah. For one or other reason, the line is a bit less clear, so I didn't really understand everything you were asking about, but this was about the Belgian investments. To add some color there, based on the conversations that we had, and depending on the structure that you can put in place, because in the end, as you all are aware of, there's always tax leakage involved, and if you can limit that has a positive impact. From what we know today, we can work within a structure that allows us to limit tax leakage. That means that basically we are not expecting that this will come at important discounts or higher discounts, or discounts at all. That's basically the assumption under which we are working today. That's one thing.

Speaker #2: But this was about the Belgian divestments . So to add some color there based on the conversations that we had and depending on the structure that you can put in place , because in the end , as you all are aware of , there's always tax leakage involved .

Speaker #2: And if you can limit that, that has a positive impact. But from what we know today, we can work within a structure that allows us to.

Speaker #2: Limit tax leakage. So that means that basically we are not expecting that this will come at important discounts, or higher discounts, or discounts at all.

Speaker #2: So that's the basically the assumption under which we are working today . That's one thing . Secondly , also the lack of simulations is that normally we should be able to reinvest the recycled capital coming out of this transaction into markets where we have access to similar net yields .

Stefaan Gielens: Secondly, also the back-of-simulations is that normally we should be able to reinvest the recycled capital coming out of this transaction into markets where we have access to similar net yields. I'm partly also referring, which I did during the presentation, to the development pipeline, which is already building up and already will lead to deliveries up to EUR 450 million in the next 18 months. To a certain extent, already pre-empting the question. All in all, maybe to summarize, is that we actually aiming for at least a neutral impact in terms of EPS, and hopefully NAV, but actually, we have the ambition to do somewhat better than that. Okay.

Speaker #2: And I'm partly also referring, as I did during the presentation, to the development pipeline, which is already building up and will lead to deliveries of up to €450 million in the next 18 months.

Speaker #2: So we , to a certain extent , already pre-empting the question . So all in all , maybe to summarize , is that we actually aiming for at least a neutral impact in terms of EPS .

Speaker #2: Hopefully, any. But actually, we have the ambition to do somewhat better than that. Okay.

Steven Boumans: Very clear. Thanks so much.

Steven Boumans (ABN AMRO: Very clear. Thanks so much.

Speaker #5: Thank you so much .

Stefaan Gielens: See how the market evolves in the next couple of weeks and months, of course.

Speaker #2: How the market evolves in the next couple of weeks and months, of course. Yeah.

Speaker #5: Okay. Okay. That's clear. Thank you so much.

Steven Boumans: Okay. That is a clear answer. Thank you so much.

Steven Boumans (ABN AMRO: Okay. That is a clear answer. Thank you so much.

Speaker #3: The next question comes from Frederic Renard from Kepler. Please go ahead.

Operator: The next question comes from Frederic Renard from Kepler. Please go ahead.

Speaker #6: Hi. Good morning. I hope you can hear me properly. My first question would be on the look and the guidance.

Frederic Renard: Hi. Good morning, Angus. I hope you can hear me properly. My first question would be on the outlook and the guidance. In the past, you have been guiding relatively prudently to the market. According to you, what could be a positive element of surprise going forward leading you to beat that guidance? I mean, specifically on the EUR 60 million synergies. I remember last year you were quite optimistic on that figure. Is it still the case? That is the first question. Thanks.

Frédéric Renard: Hi. Good morning, Angus. I hope you can hear me properly. My first question would be on the outlook and the guidance. In the past, you have been guiding relatively prudently to the market. According to you, what could be a positive element of surprise going forward leading you to beat that guidance? I mean, specifically on the EUR 60 million synergies. I remember last year you were quite optimistic on that figure. Is it still the case? That is the first question. Thanks.

Speaker #6: I mean , in the past you have been guiding relatively prudently to the market . According to you , what could be a positive element of surprise going forward leading to leading you to build that guidance ?

Speaker #6: And I mean , specifically on the €16 million synergies . I remember last year , we were quite optimistic on that figure . So is it still the case ?

Speaker #6: That's the first question. Thanks.

Speaker #1: Yeah . So I do think that today we clearly have a path to to go to the 60 million . When I look at the guidance for 26 , it might be that we currently have included .

Ingrid Daerden: Yeah. I do think that today we clearly have a path to go to the EUR 60 million. When I look at the guidance for 2026, it might be that we currently have included EUR 5.5 million. We might go a little bit faster on that. So that could be a potential for some upside that can be identified. There is also some possibility that we might go above the EUR 60 million. So we have a clear path to get to the EUR 60 million, and the fact that we already have that today in place gives us a certain comfort to say that we will have at least the EUR 60 million. Then on the outlook itself, what are the other elements that could contribute a little bit on the positive side? That is on costs, as well, property management cost as overheads.

Speaker #1: 5.5 million. We might go a little bit faster on that, so that could be a potential for some upside that can be identified.

Speaker #1: And there is also some possibility that we might go above the €60 million. So we have a clear path to get to the €60 million.

Speaker #1: And the fact that we already have that in place today gives us a certain comfort to say that we will have at least the €16 million.

Speaker #1: Then on the outlook itself , what are the other elements that that could be a little bit contribute on the positive side , that is on on the costs as well , property management cost and overheads .

Speaker #1: There might be a slightly positive impact going forward . I would say there was always the impact of GBP . So currently , like we said in the business plan , we assume 1.15 .

Ingrid Daerden: There might be a slightly positive impact going forward, I would say. There was always the impact of GBP. So currently, like we said in the business plan, we assume 1.15. Currently, GBP is trading a little bit higher. So if that continues for the coming six months, that will also have some slightly positive impact in our rental income. So there is some potential that we will be above the EUR 5.35 for sure that we have announced for 2026. But of course, there can also be incidents that occur in the second half. So there always will be some kind of buffers in the budget as well, and in the guidance.

Speaker #1: Currently, GBP is trading a little bit higher. So if that continues for the coming six months, that will also have some slightly positive impact on our rental income.

Speaker #1: So there is some potential that we will be above the €5.35 per share that we have announced for '26, but of course, there can also be incidents that occur in the second half of the year.

Speaker #1: So, there will always be some kind of buffers in the budget as well, and in the guidance.

Speaker #6: And just to be sure, yeah, I would look to account for the bond, right.

Frederic Renard: Just to be sure, your outlook tack on the bond you were anyway.

Frédéric Renard: Just to be sure, your outlook tack on the bond you were anyway.

Ingrid Daerden: Yes, like I said. When we estimate the impact that a potential bond issue could have on the EPRA earnings, it can still be included, and keeping the EPRA EPS at 535. So the impact, and to be a little bit clear on it, that we estimate that it would still have in 2026 would be between EUR 500,000 and EUR 1 million in the financial charges. But this would still allow us to have the EPRA EPS as 535.

Speaker #1: Yes . Like I said so so when we estimate the impact that that a potential bond issue could have on the upper earnings , it can still be included .

Speaker #1: And keeping the EPS at 5.35. So the impact—it will be a little bit clearer on it—that we estimate that it could still have in '26 would be between 500,000 and 1 million.

Speaker #1: And the financial charges. But this would still allow us to have the EPS at 5.35.

Speaker #6: Okay . Thank . Then maybe a second question on the office portfolio . So I see it's down 0.8% year to date . I would I would love to have a bit more detail on your discussion because you're mentioning for the last year that you have been approached for that portfolio .

Frederic Renard: Okay. Then maybe a second question on the office portfolio. I see it is down 0.8% year to date. I would love to have a bit more detail on your discussion because you are mentioning for the last year that you have been approached for that portfolio. I am a bit surprised because I do not see who would be a natural buyer for two assets, to be honest. Maybe can you give a bit more color on that?

Frédéric Renard: Okay. Then maybe a second question on the office portfolio. I see it is down 0.8% year to date. I would love to have a bit more detail on your discussion because you are mentioning for the last year that you have been approached for that portfolio. I am a bit surprised because I do not see who would be a natural buyer for two assets, to be honest. Maybe can you give a bit more color on that?

Speaker #6: I'm a bit surprised because I don't see who would be a natural buyer for this—for two assets, to be honest.

Speaker #6: So maybe, can you give a bit more color on that?

Stefaan Gielens: As much as I would love to answer that question, I do not want to scare away the parties that we have in mind at this point in time. Maybe adding to that without dropping names, because that is something I am definitely not going to do. What we are working on today, and the assumption under which we are working today is that we had some quite interesting inbound from a limited number of partners, to be quite honest, that showed an interest in the total portfolio. But we are also very open to structure a deal that would make sense for everybody involved, meaning Aedifica and people willing to step into the equity behind this portfolio. This is an avenue that we are working on with indeed a couple of names in mind.

Speaker #2: Yeah , as much as I would love to answer that question , I , I don't want to scare away the parties that we have in mind at this point in time .

Speaker #2: Maybe adding to that without dropping names , because that's something I'm definitely not going to do . But what we are working on today as an .

Speaker #2: And the assumption under which we are working today is that we had some quite interesting . Inbound from a limited number of partners to be quite honest , that showing that showed an interest in the total portfolio , but we're also very open to structure a deal that would make sense for everybody involved , meaning AEDIFICA and people willing to step into the equity behind this portfolio .

Speaker #2: So this is an avenue that we're working on, with indeed a couple of names in mind. It's not a long list. Fair enough.

Stefaan Gielens: It is not a long list, fair enough, but it is a list of people that have, at several points in time, confirmed their interest in the idea of working with that assumption. That is basically what we are preparing and doing at this point in time. I hope this will shed a bit more light on the-

Speaker #2: But it is a list of people that have, at several points in time, confirmed their interest in the idea of working with that assumption.

Speaker #2: So that is basically what we're preparing and doing at this point in time. So I hope this will shed a bit more light on the...

Frederic Renard: Mm-hmm. Okay.

Frédéric Renard: Mm-hmm. Okay.

Speaker #6: Okay .

Stefaan Gielens: whole idea.

Speaker #2: Yeah .

Speaker #6: And maybe if I may ask one totally not related to that , but you are referring to some renegotiation in Belgium , which brought the life for like below inflation and Italy .

Frederic Renard: And maybe if I may, a last one, totally not related to that, but you are referring to some renegotiation in Belgium, which brought the like-for-like below inflation. In Italy, you have seen some renegotiation, as you mentioned, of course, limited number of assets, but still like-for-like going down. I just wanted to touch upon first in Belgium, do you think it is over in terms of negative renegotiation? Then maybe for Italy, can we conclude that Italy, whenever you will have some renegotiation, will be in a weak position to renegotiate rent at market rent?

Frédéric Renard: And maybe if I may, a last one, totally not related to that, but you are referring to some renegotiation in Belgium, which brought the like-for-like below inflation. In Italy, you have seen some renegotiation, as you mentioned, of course, limited number of assets, but still like-for-like going down. I just wanted to touch upon first in Belgium, do you think it is over in terms of negative renegotiation? Then maybe for Italy, can we conclude that Italy, whenever you will have some renegotiation, will be in a weak position to renegotiate rent at market rent?

Speaker #6: You have seen some renegotiation, as you mentioned, of course, a limited number of assets, but still, like for like, going down.

Speaker #6: I'm just wanting to touch upon, first, on Belgium. Do you think it's over in terms of negative renegotiation? Renegotiation, sorry.

Speaker #6: And then maybe for Italy, can we conclude that in Italy, whenever you have some renegotiation, you will be in a weak position to renegotiate rent at market rent?

Speaker #1: No, I think for Italy, it was really incidental because, actually, the renegotiation that took place was on more than one asset.

Ingrid Daerden: Well, I think for Italy, it was really incidental. Because actually the renegotiation that took place was on more than one asset, the lease extension, and there was only one where there was a rent reduction. So it is certainly not to be generalized for all those assets. All those things limited to 8 assets. So it was a very specific case there. When we look at the Belgian portfolio, I think that the market is aware of the fact that Armonea has been renegotiating, and I think we also disclosed this in the half-year report, that we had discussions on a limited number of assets within the portfolio. Some of the operational activities have or will be transferred in the coming months. And there was also some limited rent reduction, because we can still show a positive like-for-like in the Belgian market.

Speaker #1: That is the extension. And there was only one matter of rent reduction. So it's certainly not to be generalized for all those assets, all those limited to eight assets.

Speaker #1: So it was a very specific case . There . And when we look at the Belgium portfolio , I think yeah , the market is aware of the fact that Armenia has been renegotiating .

Speaker #1: And this has—I think we also disclosed this in the half-year report—that we had discussions on a limited number of assets within the portfolio, and some of the operational activities have or will be transferred in the coming months.

Speaker #1: And there was also some limited rent reduction because we can still show a positive like for like in the Belgium market . So also there it should not be considered that going forward , you have to take into account that there are still a lot of renegotiation .

Ingrid Daerden: So also there, it should not be considered that going forward, you have to take into account that there is still a lot of renegotiation that is required.

Ingrid Daerden: So also there, it should not be considered that going forward, you have to take into account that there is still a lot of renegotiation that is required. There might be some, cannot be excluded. Like we said, there might be incidents, also in the coming months, but not expecting that the like-for-like that you normally would expect based on the inflation to suddenly would completely be jeopardized by rent renegotiations.

Speaker #1: That is happening . There might be some cannot be excluded . Like we said , there might be incidents also in the coming months , but not expecting that the like for like would that you normally would expect based on the inflation to occur that with completely be jeopardised by , by rendering and case .

Ingrid Daerden: There might be some, cannot be excluded. Like we said, there might be incidents, also in the coming months, but not expecting that the like-for-like that you normally would expect based on the inflation to suddenly would completely be jeopardized by rent renegotiations.

Speaker #2: Yeah , I might just just to to maybe add some color to this . First of all , specifically for the Belgian market , we do see rent covers now .

Stefaan Gielens: Well, just to maybe add some color to this. First of all, specifically for the Belgian market, we do see rent covers now. Well, as I said, not at the level where we want to see them. We would love to see them a bit higher in the Belgian market, but they are definitely in a very decent zone. So I think that the issue for the whole of the Belgian market is that it is not an issue as such for the whole of the Belgian market. It is more incident related. And when you look at the like-for-like growth for the whole of the portfolio, in the end, we do still have positive rent reversion on top of inflation in the portfolio.

Speaker #2: Well , as I said , not at the level where we want to see them . We would love to see them a bit higher in the Belgian market , but they're definitely in a very decent zone .

Speaker #2: So I think that the issue for the whole of the Belgian market is that it is not an issue as such for the Belgian market; it's more incident-related.

Speaker #2: And when you look at the like for like growth for the whole of the portfolio , in the end , we do still have positive rent reversion on top of inflation in the portfolio .

Speaker #2: So I think that underlines what we said , just said incidents can happen . Probably will happen . But it's not as such a trend that we see or expect to the whole portfolio and not even to the whole market

Stefaan Gielens: So I think that underlines what Ingrid said, just that incidents can happen, probably will happen, but it is not as such a trend that we see or expect through the whole portfolio and not even through the whole Belgian market. That is clear. Thank you very much.

Speaker #6: That's clear. Thank you very much.

Speaker #3: The next question comes from Veronique Mertens from Van Lanschot Kempen. Please go ahead.

Operator: The next question comes from Veronique Mertens from Van Lanschot Kempen. Please go ahead.

Speaker #7: Hey , good morning . Thank you for for taking my question . The presentation perhaps first one follow up on that rent cover of Belgium you mentioned .

Veronique Mertens: Hey, good morning, all. Thank you for taking my question and the presentation. Perhaps first one follow up on that rent cover of Belgium. You mentioned indeed it should improve in the future, but occupancy is actually relatively high. What makes you more comfortable? What should drive that improvement in the cover ratio in Belgium then?

Véronique Meertens: Hey, good morning, all. Thank you for taking my question and the presentation. Perhaps first one follow up on that rent cover of Belgium. You mentioned indeed it should improve in the future, but occupancy is actually relatively high. What makes you more comfortable? What should drive that improvement in the cover ratio in Belgium then?

Speaker #7: Indeed, it should improve in the future, but occupancy is actually relatively high. So, what makes you more comfortable? What should drive that improvement in cover ratio in Belgium, then?

Speaker #2: Okay . Revenue per resident without going into too many details , because I can talk about it quite long , but I think the if you look at situation in Belgium , it's quite similar to the rest of Europe facing the same issues in the same challenges , meaning there's a lot of pressure now starting to kick in on the occupancy of lots of these houses .

Stefaan Gielens: Well, revenue for residents. Without going into too many details, because I can talk about this quite long, but I think if you look at situation in Belgium, it is quite similar to the rest of Europe, facing the same issues and the same challenges, meaning there is a lot of pressure now starting to kick in on the occupancy of lots of these houses. I think that what should improve in Belgium is that the pricing flexibility that operators have should improve. Now it is becoming more technical, but part of the income of a Belgian operator is directly coming out from Social Security money. I am not expecting to see a huge increase coming from that side because the country has other issues to tackle in terms of public debt, et cetera.

Speaker #2: I think that what should improve in Belgium is that the pricing flexibility that operators have should improve. And now it's becoming more technical.

Speaker #2: But part of the income of a Belgian operator is directly coming out of Social Security money. Now, I'm not expecting to see a huge increase coming from that side, because the country has other issues to tackle in terms of public debt, etc.

Speaker #2: But part of it is coming from what people living in these homes are paying themselves, or their own contribution, and there is a lot of regulation in place, which makes it very difficult for an operator to increase these prices at the same pace as the real cost increases that they are facing today.

Stefaan Gielens: But part of it is coming from what people living in these homes are paying themselves, so it is their own contribution. There is a lot of regulation in place which makes it very difficult for an operator to increase these prices at the same pace as the real cost increases that they are facing today. But when you look at the reality of Belgian society, people living in these houses do have the wealth or the means to pay these higher prices. So I think that what is happening in Belgium is that the day prices people are paying in care homes are artificially low because of regulation and should go up to keep track with the increase in costs. It is, by the way, not something that I am telling the market.

Speaker #2: But when you look at the reality of Belgian society, people living in these houses do have the wealth or the means to pay these higher prices.

Speaker #2: So, I think that what is happening in Belgium is that the day prices people are paying in care homes are artificially low because of regulation and should go up to track with the increase in costs.

Speaker #2: It is , by the way , not something that I'm telling the market . I think that most of the operators , including the not for profit operators , are very much aware of this and are signaling these measures more and more towards the authorities in the country .

Stefaan Gielens: I think that most of the operators, including the not-for-profit operators, are very much aware of this and are signaling these messages more and more towards the authorities in the country. So in that respect, I am absolutely not afraid of the Belgian market in the medium or long term. The means are available. It is just a matter of regulation and political will to make sure it happens. At a certain point in time, it will happen because the pressure on the existing system will become and when I say pressure, occupancy then will become an issue. I mean an issue that people would end up on waiting lists, and that will keep increasing more pressure on the decision-makers in this country. So it is a matter of, in my view, time.

Speaker #2: So in that respect , I'm absolutely not afraid of the Belgian market in the medium or long term . There is the means are available .

Speaker #2: It's just a matter of regulation and political will to make sure it happens. And at a certain point in time, it will happen because the pressure on the existing system will become—what I mean.

Speaker #2: And when I say pressure, occupancy will become an issue, and I mean an issue that people will end up on waiting lists, and that will increase even more pressure on the decision makers in this country.

Speaker #2: So it's a matter of, in my view, time.

Speaker #7: Okay. Thank you. And then, perhaps on the acquisition side, could you give some color on what you're exactly looking at?

Veronique Mertens: Okay. Clear. Thank you. Then perhaps on the acquisition side, could you give some color on what you are exactly looking at? Is that mainly care homes, or how seriously are you also looking into further diversification within the healthcare space, let's say private hospitals?

Véronique Meertens: Okay. Clear. Thank you. Then perhaps on the acquisition side, could you give some color on what you are exactly looking at? Is that mainly care homes, or how seriously are you also looking into further diversification within the healthcare space, let's say private hospitals?

Speaker #7: Is that mainly Cameron's, or how seriously are you also looking into further diversification within the healthcare space? Let's say, private hospitals.

Stefaan Gielens: Well, obviously because a lot of the deals that we are doing, and I am not talking about somewhat bigger M&A, I am really talking about the day-to-day business refueling pipeline, adding cash flow generating assets to the portfolio is generated through the countries. As you know that we have a decentralized operating model with country teams that are our first line also in terms of, not just in terms of managing the portfolio, but also in terms of identifying potential deals. Okay, they are all very deep into their local care home markets and senior housing markets. So that is something where we do see the portfolio growing, I would say even organically in the future.

Speaker #2: Well , obviously , because a lot of the deals that we are doing , and I'm not talking about somewhat bigger M&A , I'm really talking about the day to day business refueling pipeline , adding cash flow , generating assets to the portfolio is generated through the country's , as you know , that we have a decentralized operating model , with country teams that are our first line also in terms of not just in terms of managing the portfolio , but also in terms of identifying potential deals .

Speaker #2: Okay. They're all very deep into their local care home markets and senior housing markets, so that is something where we do see the portfolio growing.

Speaker #2: I would say even organically in the future , the zoom on the pure market is more coming from the top of the of the company , meaning from the investment team that we have here in Brussels , where we are clearly sending out signals to the market and looking at potential deals outside of the typical care home senior housing space , you mentioned hospitals .

Stefaan Gielens: The zoom on the cure market is more coming from the top of the company, meaning from the investment team that we have here in Brussels, where we are clearly sending out signals to the market and looking at potential deals outside of the typical care homes and housing space. You mentioned hospitals. We already have looked at some, so we are absolutely open and very interested in these markets.

Speaker #2: We already have looked at some. So yeah, we are absolutely open and very interested in these markets.

Speaker #7: Okay. Thank you very much.

Veronique Mertens: Okay, thank you very much.

Véronique Meertens: Okay, thank you very much.

Operator: The next question comes from Akanksha Anand from Citigroup. Please go ahead.

Speaker #3: The next question comes from Akanksha Anon from Citigroup. Please go ahead.

Speaker #7: Hi .

Speaker #8: Good morning Stefan . Ingrid , two questions from my side . I'll take them one by one . The first one I think this was partly answered by but I wanted to focus more on the disposals of offices and the distribution networks .

Akanksha Anand: Hi, good morning, Stefaan, Ingrid. Two questions from my side. I'll take them one by one. The first one, I think this was partly answered, but I wanted to focus more on the disposals of offices and the distribution networks. Just wanted to understand what kind of discounts can we expect on the sale of the offices and the distribution networks portfolios that you might be willing to accept. Would the potential EPS dilution be broadly offset by the cost-based synergies that we might expect once these assets are disposed? That's the first one.

Aakanksha Anand: Hi, good morning, Stefaan, Ingrid. Two questions from my side. I'll take them one by one. The first one, I think this was partly answered, but I wanted to focus more on the disposals of offices and the distribution networks. Just wanted to understand what kind of discounts can we expect on the sale of the offices and the distribution networks portfolios that you might be willing to accept. Would the potential EPS dilution be broadly offset by the cost-based synergies that we might expect once these assets are disposed? That's the first one.

Speaker #8: So just wanted to understand what kind of discounts can , you know , we expect on the sale of the offices and the distribution networks portfolios that you might be willing to accept and would the potential EPS dilution be broadly offset by the cost synergies that , you know , we might expect once these assets are disposed ?

Speaker #8: That's the first one .

Stefaan Gielens: More than glad to answer the question, but just was thinking, given the fact that I mentioned that there are some off-market conversations ongoing also for the office portfolio, I'm not that much inclined to start being very specific on what could be a potential discount that we would accept to make the deal happen in terms of the offices. This being said, I think that, first of all, this is also what we said when we made the offer on the Cofinimmo shares. We have a quite realistic understanding of what the illiquidity of Brussels office portfolio means also in terms of pricing. We're definitely not trying to sell this portfolio to people that are going for very high double-digit discounts. Will not work for us, will not happen either. Not going any further than that.

Speaker #2: More than glad to answer the question , but just was thinking , given the fact that I mentioned that there are some of market conversations ongoing also for the office portfolio , I'm not that much inclined to start being very specific on what could be a potential discount that we would accept to , to make the deal happen .

Speaker #2: In terms of the offices, this being said, I think that first of all, we should—this is also what we said when we made the offer on the coffee machine.

Speaker #2: So we have a quite realistic understanding of what the illiquidity of the Brussels office portfolio means. Also, in terms of pricing, we're definitely not trying to sell this portfolio to people that are going for very high double-digit discounts—that will not work for us; it will not happen either.

Speaker #2: Okay . Not going any further than that . But this being said , also in the modeling that we did , taking into account a discount that we think should be fair in this market , and the fact that we will redeploy the capital that is coming out of this deal in the in the healthcare real estate space at yields that we can find today .

Stefaan Gielens: This being said, also in the modeling that we did, taking into account a discount that we think should be fair in this market, and the fact that we will redeploy the capital that is coming out of this deal in the healthcare real estate space at yields that we can find today, and probably also focusing a bit more on countries where tax leakage is somewhat more limited. It should allow us to at least keep this EPS neutral. That is what we're trying to go for when talking about the office portfolio. But it's a totally different situation looking at the asset rotation that is in place already today, but it's a very limited number. I think you've seen in the slide that we sold 12 properties. We're talking EUR 3 million, but that is always at a price above fair value.

Speaker #2: And probably also focusing a bit more on countries where tax leakage is somewhat more limited, it should allow us to at least keep these EPS neutral.

Speaker #2: So that is what we're trying to go for when talking about the office portfolio. The PUPs is a totally different situation. Looking at the asset rotation that is in place already today, but it's a very limited number.

Speaker #2: I think you've seen in the slides that we sold clubs. It's been talking €3 million, but that is always at a price above fair value.

Speaker #2: So, basically, there we were more expecting that if we would sell. But I also mentioned that we're not in a hurry here. It would come at, rather, a premium to fair value than a discount to fair value. Okay.

Stefaan Gielens: Basically there, we are more expecting that if we would sell, but I also mentioned that we are not in a hurry here, it would come as rather a premium to fair value than a discount to fair value. Okay, and then you referred to the synergies. To be totally honest, in the modeling that we have done and still are doing regarding a potential divestment of the office portfolio, we are more focusing on trying to find some balance between the price and the conditions at which we sell and what we can do in terms of redeployment of the recycled capital coming from portfolios. We are not so much focusing on whether or not the synergies should compensate potential dilution coming from a sale. I do not have an immediate answer to that question, to be quite honest with you.

Speaker #2: And then you referred to the synergies . To be totally honest , in the modeling that we have done and still are doing regarding a potential divestment of the office portfolio , we are more focusing on trying to find some balance between the price and the conditions at which we sell and what we can do in terms of redeployment of the recycled capital coming from portfolios with not so much focusing on whether or not the synergies should compensate , potential dilution coming from a sale .

Speaker #2: So, I don't have an immediate answer to that question, to be quite honest.

Speaker #8: Okay . That's clear . The second question is just on I mean , I think we you were talking about previously on the Belgium market and the occupancy and the waitlists .

Akanksha Anand: Great. That is clear. The second question is just on, I think you were talking about previously on the Belgium market and the occupancy and the wait lists. Just given the strong demographic tailwinds, is it reasonable for us to expect a more widespread indexation outperformance in other AEDIFICA markets, apart from just the regulated ones where we are seeing it right now, like the UK, over, say, next 5 to 7 years?

Aakanksha Anand: Great. That is clear. The second question is just on, I think you were talking about previously on the Belgium market and the occupancy and the wait lists. Just given the strong demographic tailwinds, is it reasonable for us to expect a more widespread indexation outperformance in other AEDIFICA markets, apart from just the regulated ones where we are seeing it right now, like the UK, over, say, next 5 to 7 years?

Speaker #8: So given just given the strong demographic tailwinds , is it is it reasonable for us to expect a more widespread indexation outperformance in , you know , other AEDIFICA markets apart from just the related ones , where we are seeing it right now , like the UK over , say , next 5 to 7 years .

Speaker #2: Okay . If you're talking that horizon , okay , but this is now really me expressing my opinion of how the care home market or senior housing market in , in , in Europe could evolve over the next 5 to 7 years .

Stefaan Gielens: Okay, if you are talking that horizon. Okay, but this is now really me expressing my opinion of how the care home market or senior housing market in Europe could evolve over the next 5 to 7 years. We are definitely talking medium to long term. Yes, I definitely would expect that the market would become more and more private. I am pretty sure that most of the countries, in terms of Social Security spendings, will have to focus much more on the high care needs and financing those types of care, and probably will spend less public money in financing lower care needs or typical residential care needs, and definitely not residential care infrastructure. That will, I think, create a somewhat different dynamic to what we have seen in the past, and I refer to the Belgian situation. Now, I am not naive.

Speaker #2: So you were definitely talking medium to long term. Yes, I definitely would expect that the market will become more and more private.

Speaker #2: I'm pretty sure that most of the countries will have , in terms of Social Security spending , will have to focus much more on the high care needs and financing those types of , of , of care and probably will spend less public money in financing lower care needs or typical residential care needs , and definitely not residential care infrastructure .

Speaker #2: So that will, I think, create a somewhat different dynamic to what you've seen in the past. And I refer to the Belgian situation.

Speaker #2: I'm not naive . I don't think political authorities , given the sensitivity of this , of this segment . They will never totally deregulate the segment .

Stefaan Gielens: I do not think political authorities, given the sensitivity of this segment, they will never totally deregulate this segment. But they know, and I can give you very straightforward examples, and there was a huge discussion about to what extent there should be more air conditioning in care homes given the long, hot summer that we had and the excess mortality that came out of it in a country like Belgium. And the authorities were absolutely agreeing, "Yes, we need more air conditioning, but we are not willing to pay for it. So you do not expect any increases in Social Security spending. And on the other hand, we do not want you to increase the day prices you are charging to your residents." That is a position that it will not work.

Speaker #2: But they know , and I can give you very straightforward examples . And there was been a huge discussion about to what extent there should be more air conditioning in care homes , given the long , hot summer that we had and the excess mortality that came out of it in a country like Belgium and the authorities were absolutely agreeing , yes , we need more air conditioning , but we're not willing to pay for it .

Speaker #2: So you don't expect any increases in Social Security spending . And on the other hand , we don't want you to increase the prices you're charging to your residents at that is a position that it will not work .

Speaker #2: And I think that the pressure on these type of reasoning will increase to the point that they will have to accept that if they want to guarantee a place and a high quality place for everybody with a care need , they will have to accept more pricing flexibility for the operators .

Stefaan Gielens: I think that the pressure on this type of reasoning will increase to the point that they will have to accept that if they want to guarantee a place and a high-quality place for everybody with a care need, they will have to accept more pricing flexibility for the operators, otherwise they will not be able to provide for it. I think that is a reality they cannot avoid in the near future. But don't pin me on an exact timing, but I-

Speaker #2: Otherwise, they will not be able to provide for it. I think that is a reality. They can't avoid it in the near future, but don't pin me on an exact timing. But I...

Speaker #9: Yeah .

Akanksha Anand: Sure. Thank you so much. That is all my questions.

Aakanksha Anand: Sure. Thank you so much. That is all my questions.

Speaker #8: Thank you so much. That's all my questions.

Speaker #3: The next question comes from Lynn Hotkey from KBC. Please go ahead.

Operator: The next question comes from Lynn Hoteit from KBC. Please go ahead.

Speaker #10: Hi . Good morning . I have a first question on operator health . It's a general question . It's not tied to any specific country .

Lynn Hoteit: Hi. Good morning. I have a first question on operator health. It is a general question. It is not tied to any specific country. But the current situation ahead is higher energy costs there and coupled with wage inflation, which gives me a bit of flashbacks to 2023, and I think the biggest difference is the fact that the occupancy is higher versus 2023. But just in general, do you see an uptick in requests from operators to already negotiate rents ahead of the coming headwinds?

Lynn Hautekeete: Hi. Good morning. I have a first question on operator health. It is a general question. It is not tied to any specific country. But the current situation ahead is higher energy costs there and coupled with wage inflation, which gives me a bit of flashbacks to 2023, and I think the biggest difference is the fact that the occupancy is higher versus 2023. But just in general, do you see an uptick in requests from operators to already negotiate rents ahead of the coming headwinds?

Speaker #10: But yeah , I mean , the current situation ahead is is higher energy costs . And coupled with wage inflation , which gives me a bit of flashbacks to 2023 .

Speaker #10: And I think the biggest difference is the fact that the occupancy is higher versus 23 . But just in general , do you see an uptick in requests from operators to already negotiate rents ahead of the of the coming ?

Speaker #2: No , no , no . And that I think we can be quite bold . What we talked about some incidents that still might occur , but there mostly always going back to the past .

Stefaan Gielens: No. That I think we can be quite bold. Well, we talked about some incidents that still might occur, but they are mostly always going back to the past. In some cases, I should be, well, also saying, referring to some mismanagement on the side of operators, or over-leverage for the ones that still are carrying on too much leverage, but that is more referring to the past. Looking forward, we are not being approached at this point in time by operators already trying to strike some sort of deal because they are afraid of inflation that might come their way. This being said, I am definitely not going to be naive. What we do sense is that the, well, let's say the experience that operators had back in 2023 with double-digit inflation has made them more allergic to inflation. So they are aware of it.

Speaker #2: And in some cases , I should be well also saying , referring to some mismanagement on the side of operators or over leveraged for the ones that still are carrying on too much leverage .

Speaker #2: But that is more referring to the past looking forward. We're not being approached at this point in time by operators already trying to strike some sort of deal because they're afraid of inflation that might come their way.

Speaker #2: This being said , and definitely not going to be naive , what we do sense is that the well , let's say the experience that operators had back in 2023 with double digit inflation has made them more allergic to inflation .

Speaker #2: So they are aware of it . But I'm going to repeat what I said . I think back also in 23 and 24 , as long as inflation stays where it is today , below 5% , I think it is more than manageable .

Stefaan Gielens: I am going to repeat what I said, I think back also in 2023 and 2024. As long as inflation stays where it is today, below 5%, I think it is more than manageable, given, you referred to it, the fact that occupancy and in most of the countries, rent covers are very decent today. When I say decent, I mean good and strong. So they should be able to absorb it. But I agree with you that they are more nervous about it because of what they experienced back in 2023.

Speaker #2: Given you refer to it. The fact is that occupancy, and in most of the countries, rent covers are very decent today. And when I say decent, I mean good and strong.

Speaker #2: So it should they should be able to absorb it . But I agree with you that they're more nervous about it because of what they experienced in back in 2023 .

Speaker #10: Okay . Yeah . That makes that makes sense . And then second question is on the offices . So I understand the strategy to sell it in one go or find a partner for an equity stake .

Lynn Hoteit: Okay. Yeah, that makes sense. My second question is on the offices. So I understand the strategy to sell it in one go or find a partner for an equity stake. But then again, I think you did a smaller disposal this summer of EUR 16 million in Brussels. Maybe do you have some yield details on that disposal? Secondly, could we expect some smaller divest still before hoping to close the whole portfolio in one go by the end of 2027?

Lynn Hautekeete: Okay. Yeah, that makes sense. My second question is on the offices. So I understand the strategy to sell it in one go or find a partner for an equity stake. But then again, I think you did a smaller disposal this summer of EUR 16 million in Brussels. Maybe do you have some yield details on that disposal? Secondly, could we expect some smaller divest still before hoping to close the whole portfolio in one go by the end of 2027?

Speaker #10: But then again , I think you did a smaller disposal this summer of , of 16 million in Brussels maybe . Do you have some yield on that disposal and secondly , could we expect some smaller divest still before hoping to close the whole portfolio in one go by the end of 2027 ?

Stefaan Gielens: You want to answer the disposal? Or, yeah.

Speaker #2: Yeah , yeah .

Speaker #1: I think on the disposals, you can see the disposals that you have seen. So they are part of the normal asset rotation program.

Ingrid Daerden: Yeah, I think on the disposals, we can say that the disposals that you have seen, they are part of the normal asset rotation program, not related to the more strategic disposals that are targeted.

Speaker #1: So, not related to the more strategic disposals that are targeted.

Speaker #2: Yeah. And basically, the €16 million, if I'm not mistaken, was entirely linked to an atypical building because it was a dreadful one.

Stefaan Gielens: Yeah. And basically the EUR 16 million, if I am not mistaken, was entirely linked to an atypical building because it was a trade port. So it was not a normal cash flow producing asset in the portfolio. So there is not a lot you can deduct from that, also, Lynn, in terms of yields specifically for the office portfolio. Then secondly, once again, as we are working on this, not going to go into too many details. The idea is to try and strike a deal for the whole of the portfolio, but we are aware that we might want to tweak the portfolio with one or two assets for which we could find a separate solution. But the idea today is that we are working on the whole of the portfolio.

Speaker #2: So it was not a normal cash-flow producing asset in the portfolio, so there's not a lot you can deduct from that.

Speaker #2: Also not in terms of yields specifically for the the office portfolio . And then secondly , we once again , as we're working on this , not going to go into too many details , the idea is to try and strike a deal for the whole of the portfolio .

Speaker #2: But we are aware that we might want to tweak the portfolio with one or two assets for which we could find a separate solution.

Speaker #2: But the idea is, today, that we're working on the whole of the portfolio. Yeah.

Speaker #10: All right. Perfect, it's here. Thank you.

Lynn Hoteit: All right. Perfect to hear. Thank you.

Lynn Hautekeete: All right. Perfect to hear. Thank you.

Speaker #3: The next question comes from Kanad Mitra from Barclays. Please go ahead.

Operator: The next question comes from Kanad Mitra from Barclays. Please go ahead.

Speaker #11: Hello. Thank you for taking my question. I have just one. Can you give some color on, beyond these, portfolio and offices?

Kanad Mitra: Hello. Thank you for taking my question. Can you give some color on beyond these of the Belgian portfolio and offices? How do you see a normalized business plan beyond this, the immediate 2026 and 2027 disposals and asset rotations, in terms of investments?

Speaker #11: How do you see a normalized business plan beyond this—the immediate 2026 and 2027 disposals and asset returns, in terms of investments?

Speaker #1: I'm not sure that we fully understand the question. Are you asking about our strategy on the disposals or on the redeployment?

Ingrid Daerden: I am not sure that I fully understand the question. Are you asking strategy on the disposals or on the redeployment?

Speaker #11: No . Once once all the disposals are completed , how do you can you give us some color on how do you see the portfolio evolving and what sort of investments are you looking at ?

Kanad Mitra: No. Once all the disposals are completed, can you give us some color on how do you see the portfolio evolving and what sort of investments are you looking at, the volumes and the quality, in terms of geography as well? Yeah.

Speaker #11: The volumes and the quality, in terms of geography as well? Yeah.

Speaker #2: Yeah, yeah. Well, at the risk of repeating myself to a certain extent.

Stefaan Gielens: Well, at the risk of repeating myself to a certain extent-

Speaker #11: It's more of a medium term , medium term question . Yeah , yeah yeah .

Kanad Mitra: It's more of a medium-term question.

Stefaan Gielens: Yeah.

Kanad Mitra: Yeah.

Stefaan Gielens: Yeah. No, no, absolutely understood. But what we do see is that I mentioned that we're looking at more or less three different axes in terms of how to redeploy capital that we're recycling or deploy capital into whatever. Talking about the development pipeline, that is a market where we see a lot is happening today. We've mentioned that we are constantly refueling development pipeline. We're aiming EUR 500 to 750 million on average at every point in time. But we could, I think, already today increase easily to higher numbers. Bearing in mind that we think that it's not applicable right now today, that we could have a pipeline of development projects of maximum 10% of the total asset portfolio of the company.

Speaker #2: No, no, absolutely. Understood. But what we do see is that, as I mentioned, we're looking at more or less three different axes in terms of how to redeploy capital that we're recycling or deploy capital in whatever.

Speaker #2: Talking about the development pipeline, that is a market where we see a lot is happening today. So we mentioned that we are constantly refueling the development pipeline.

Speaker #2: Aiming for €500 to €750 million on average at every point in time. But we could, I think already today, easily increase to higher numbers.

Speaker #2: But bearing in mind that we think that's not applicable right now, today, we could have a pipeline of development projects of a maximum of 10% of the total asset portfolio of the company.

Speaker #2: So we could increase the pipeline to a much higher number , which we think might perhaps even work already today . But for lots of reasons , in terms of keeping your data under control and managing your divestment program and linking to your investment program , we don't want to exaggerate there , but that is a part of the market that seems to become more and more liquid .

Stefaan Gielens: We could increase the pipeline to a much higher number, which we think might perhaps even work already today, but for lots of reasons in terms of keeping your DTA under control and managing your divestment program and linkage to your investment program, we don't want to exaggerate there, but that is a part of the market that seems to become more and more liquid. Of course, we need to find deals on costs that make it worth investing there, but it is becoming a lot more liquid than it was over the past couple of years. Looking at standing assets, we have identified potential portfolios that might come up for sale, or where we know that there is, to a certain extent, a willing seller. But once again, it's a matter of timing, not accelerating, willing to accelerate too much today and push your DTA too high.

Speaker #2: Of course, we need to find the yields on costs that make it worth investing there, but it is becoming a lot more liquid than it was over the past couple of years.

Speaker #2: Looking at standing assets, we have identified potential portfolios that might come up for sale, or where we know that, to a certain extent, there is a willing seller.

Speaker #2: But once again , it's a matter of timing , not accelerating , willing to accelerate too much . Today . And push your teeth to high .

Speaker #2: It will have to go hand in hand with the divestment policies, but it is also a market where we start to see a bit more liquidity. I'm not 100% sure that in every case you already have sellers willing to accept a yield level that makes a lot of sense today.

Stefaan Gielens: It will have to go hand in hand with the divestment policy. But it is also a market where we start to see a bit more liquidity. Not 100% sure that in every case you already will have sellers willing to accept a yield level that makes a lot of sense today. But once again, we see more liquidity compared to the situation even a year, certainly two years ago. Then thirdly, we refer to M&A. I also mentioned that we have targets in mind. Of course, M&A is something you don't control the timing. It happens when it happens, or at least when there's a window of opportunity, you have to seize the opportunity. But there are a couple of things that we're working on, that we're modeling, and that we think we have a good chance if we would initiate really a process.

Speaker #2: But once again , we see more liquidity compared to the situation . Even a year . Certainly two years ago . And then thirdly , we refer to M&A or also mentioned that we have targets in mind .

Speaker #2: Of course , M&A is something you don't control . The timing . It happens when it happens , or at least when there's a of opportunity .

Speaker #2: You have to see the opportunity. But there are a couple of things that we're working on, that we're modeling, and that we think we have a good chance with if we would initiate really a process. And I'm not even talking about public processes; this could very well be off-market.

Stefaan Gielens: I'm not even talking about public processes. This could be very well off market, but if you would initiate a process that this could lead to a transaction, then we're talking much bigger amounts. I think that looking at the situation today and then trying to transpose that to, let's say, the medium-term future, as I said, development activity, the way that we're doing it today, is becoming much more liquid market, even in terms of buying cash flow-yielding assets. We've seen more liquidity starting to kick in. In terms of M&A, we definitely do see a couple of targets that make a lot of sense to us. So if we could fire on all the three axes, we could be very bullish about growth. But then again, there's things like DTA, interest rates, and the divestment policy that we need to execute upon also.

Speaker #2: But if you would initiate a process that this could lead to a transaction , and we're talking much bigger amounts . So I think that looking at the situation today and then trying to transform that , transpose that to , to , to , let's say the medium term future , as I said , development activity in the way that we're doing it today is becoming much more liquid market , even in terms of buying cash flow , yielding assets .

Speaker #2: We see more liquidity starting to kick in. And in terms of M&A, we definitely do see a couple of targets that make a lot of sense to us.

Speaker #2: So if we could fire on all the three axes, we could be very bullish about growth. But then again, with things like DTA, interest rates, and the divestment policy that we need to execute on, also—

Speaker #11: Just one small one on , just circle back on the standing asset acquisitions that you see , potential ones who are the can you give us color on who might be the potential sellers ?

Kanad Mitra: Just one small one, just circle back on the standing asset acquisitions that you see, potential ones. Can you give us color on who might be the potential sellers? I'm not asking you to name, but just the category of sellers that you see in the market, in terms of liquidity.

Speaker #11: I'm not asking you to, but just the category of sellers that you see in the market in terms of liquidity.

Stefaan Gielens: There are. Yeah, okay. Yes, just thinking about how to answer the question without revealing too much. But no, there still are a couple of asset managers sitting on portfolios that we know will be selling and are willing to sell, clearly. There are some more private-owned portfolios where we know, because some of these people already reached out to us in the recent past, that they contemplate on selling at one point in time. We do also see, basically, operators turning back to growth and also turning to real estate investors to accompany them, meaning that when they're taking over a whole co, they want to continuously flip the real estate to a real estate investor. Those type of deals are also back today in the market. I think you've seen Alloheim once again taking over something in Germany and flipping the portfolio to a real estate investor.

Speaker #2: There are . Yeah . Okay . It's yes , it's just thinking about how to answer the question without revealing too much . But there still are a couple of asset managers sitting on portfolios that we know will be selling and are willing to sell .

Speaker #2: Clearly, there are some more privately owned portfolios where we know, because some of these people already reached out to us in the recent past, that they contemplate on selling.

Speaker #2: At one point in time. And we do also see, basically, operators turning back to growth and also turning to real estate investors to accompany them, meaning that when they're taking over a whole code, they want to immediately flip the real estate to a real estate investor.

Speaker #2: Those type of deals are also back to the in the market . I think you've seen all of them . Once again , taking over something in Germany and flipping the portfolio to real estate investor .

Speaker #2: We have indications also from other operators that are back out there looking for these types of growth scenarios.

Stefaan Gielens: We have indications also from other operators that are back out there looking for these type of growth scenarios.

Speaker #11: Thanks for that .

Kanad Mitra: Thanks for that.

Speaker #12: Yeah .

Stefaan Gielens: Yeah.

Speaker #11: Yeah, many thanks for the answers. Have a good day. Thank you.

Kanad Mitra: Many thanks for the answers. Have a good weekend.

Stefaan Gielens: Thank you. Do we have more time?

Speaker #2: Okay .

Speaker #1: So we will start now with the written questions. So the first question that was sent to us, it's regarding the leverage.

Ingrid Daerden: Okay. We will start now with the written questions. The first question that was sent to us, it is regarding the leverage. What is the medium-term leverage target for the combined group? Should we think of 42% LTV as the new normal, or is there an ambition to move back below 40%? I think there, indeed, the fact that we currently have a DTA of 42.7%, it is influenced by the payment of the dividend, but also the fact that following the integration of Cofinimmo, which had a slightly higher leverage of Aedifica, the combined entity has a somewhat higher leverage. I think 42, 43 is indeed the level that we see currently in the business plan. It is in line with the strategy that we had in the past to say that we want to be in the low 40s.

Speaker #1: So, what is the minimum medium-term leverage target for the combined group? Should we think of 42% LTV as the new normal?

Speaker #1: Or is there an ambition to move back below 40% ? So I think there indeed , the fact that we currently have a DTA of 42.7% , it is influenced by the payment of the dividend , but also the fact that following the integration of enamel , which had a slightly higher leverage of AEDIFICA , the combined entity has a somewhat higher leverage .

Speaker #1: I think 4,243 is indeed the level that we see currently in the business plan. It's in line with the strategy that we had in the past to say that we want to be in the low 40s.

Speaker #1: So there is not so much an ambition today to move it below the 40% . Of course , this is something that can evolve over time , as there will be important divestments happening in the coming months and years that can also be a point depending on the evolution of the interest rate environment , where we might decide to lower a little bit the leverage of the company , but we can say is that there is no intention to further increase the leverage of the company .

Ingrid Daerden: There is not so much an ambition today to move it below 40%. Of course, this is something that can evolve over time, as there will be important divestments happening in the coming months and years. That can also be a point, depending on the evolution of the interest rate environment, where we might decide to lower a little bit the leverage of the company. What we can say is that there is no intention to further increase the leverage of the company. The 42%, 43% is where we want to be, and temporarily, we do not allow ourselves to be above 45%. The next question is also on the financing. How are you thinking about the EUR 2.2 billion refinancing requirement coming up in 2027, 2028? It is something on which we are actively working.

Speaker #1: So the 42%, 43% is where we want to be. And temporarily, we do not allow ourselves to be above the 45%.

Speaker #1: The next question is also on the financing. How are you thinking about the €2.2 billion refinancing requirement coming up in 2027-2028?

Speaker #1: So it's something on which we are actively working. For the first six months of '26, we have been refinancing almost €1 billion.

Ingrid Daerden: For the first six months of 2026, we have been refinancing almost EUR 1 billion. It is something that we continue to work on. I already mentioned the bonds. The bonds will only be a part of the refinancing strategy, so it is something that will be continued also in 2027 and 2028. Especially in 2028, we also have some GBP financing that is coming up to maturity. So there, we intend to access a little bit debt capital markets, like we have been doing in the past and we intend to do going forward, a combination of bond markets and the GBP financing. We might also consider going back to the private placement market, and all that also combined with bank financing. We still have very good access to bank financing, and intend to continue that as a source of debt funding in the future as well.

Speaker #1: And so, that is something that we continue to work on. I already mentioned the bond. The bond will only be a part of the refinancing strategy.

Speaker #1: So it's something that will be continued also in '27 and '28, especially in '28. We also have some GBP financing that is coming up to maturity.

Speaker #1: So there, we intend to access a little bit of the debt capital market, like we have been doing in the past, and we intend to do going forward.

Speaker #1: A combination of bond market and GBP financing. We might also consider going back to the private placement market and all that. Also, combined with bank financing—we still have very good access to bank financing and intend to continue that as a source of debt funding in the future as well.

Speaker #2: There's a question once again about the somewhat lower rent cover ratios in Belgium, asking if there is a higher risk in Belgium and Germany to see negative reversion in the coming years?

Stefaan Gielens: There is a question once again about the somewhat lower rent cover ratios in Belgium, asking is there a higher risk in Belgium and Germany to see negative reversion in the coming years? Apart from incidents, we talked about that, but looking at the whole of the Belgian market, you always have to bear in mind that this is to some extent a market comparable to the French market, where the authorities are controlling the licenses, meaning literally the number of beds that can be operated in the country. And they are controlling also and regulating the income of operators because it is either depending on Social Security money, as I mentioned, or it is what operators can charge to the residents. But also there you have a quite strict regulatory framework in place.

Speaker #2: Apart from incidents we talked about that , but looking at the whole of the Belgian market , you always have to bear in mind that this is to a certain extent , the market comparable to the French market , where the authorities are controlling the licenses , meaning literally the number of beds that can be operated in the country .

Speaker #2: And they're controlling also and regulating the income of operators , because it's either depending on Social Security money , as I mentioned , or it is what operators can charge to the residents , but also there you have a quite strict regulatory framework in place .

Speaker #2: So if you wonder about the somewhat lower rent covers , I already explained in one of the previous questions that to me it is more a political issue coming from authorities , not willing to to allow operators to have a bit more flexibility in terms of increasing their prices .

Stefaan Gielens: Now if you wonder about the somewhat lower rent covers, I already explained in one of the previous questions that to me it is more a political issue, coming from authorities not willing to allow operators to have a bit more flexibility in terms of increasing day prices. But that is a position that they will not be able to hold, because they will not increase Social Security financing themselves. I am not saying it never will happen, but it will not be the solution. The only solution will be for the Belgian market, to evolve a bit more towards what today you see, for instance, in Spain, in Ireland, and in the UK. Okay, the UK being perhaps the other extreme, where you have a total pricing flexibility, knowing that the country, when you look at the people in the country, they have the means.

Speaker #2: But that is a position that they will not be able to hold because they won't increase Social Security financing themselves. I'm not saying it will never happen, but it will not be the solution.

Speaker #2: The only solution will be for the Belgian market to evolve a bit more towards what today . You see , for instance , in Spain , in Ireland , in , in and in the UK .

Speaker #2: Okay , the UK being perhaps the other extreme where you have a total pricing flexibility , knowing that the country , when you look at the people in the country , they have the means .

Speaker #2: So Belgium is a relatively rich country , not as a country , because too much public debt . But when you look at the people living in the country and look at all international statistics in terms of what is the average wealth , but also the median wealth in Belgium , it is one of the highest in Europe .

Stefaan Gielens: Belgium is a relatively rich country, not as a country, because too much public debt. But when you look at the people living in the country and look at all international statistics in terms of what is the average wealth, but also the median wealth in Belgium, it is one of the highest in Europe, and I think even in the world. It is more a political position that is keeping the rent cover relatively low today, but the authorities are facing the fact that they will need to make sure there will be more supply, that the supply will be of high quality, and that they will need to finance it one way or another. The only way forward I see is allowing a bit more flexibility in terms of pricing. Once that kicks in, these rent covers should move to levels comparable to other countries.

Speaker #2: And I think even in the world, so it's more a political position that is keeping the rent cover relatively low today. But the authorities are facing the fact that they will need to make sure that there will be more supply, that the supply will be of high quality, and that they will need to finance it one way or another.

Speaker #2: And the only way forward I see is allowing a bit more flexibility in terms of pricing. And once that kicks in, these rent covers should move to levels comparable to other countries.

Speaker #2: I'm not going to refer to the UK , but countries like what you see in the portfolio , Ireland is doing this . No reason why not .

Stefaan Gielens: I am not going to refer to the UK, but countries like what you see in the portfolio Ireland is doing. There is no reason why not something similar should not be happening in Belgium. Slowly looking at the questions. How do you explain the low OCR level for Spain?

Speaker #2: Something similar should not be happening in Belgium. Sorry. Looking at the questions. How—

Speaker #5: How do you explain the low level for spleen?

Speaker #1: And I'm sorry Okay .

Ingrid Daerden: I do not know about OCR.

Stefaan Gielens: Yeah.

Ingrid Daerden: Occupancy rate. Okay.

Stefaan Gielens: I'm sorry.

Ingrid Daerden: Oh, occupancy rate. Okay.

Speaker #5: Can you provide the OCR level for Spain?

Stefaan Gielens: The low OCR level for Spain.

Speaker #1: I think it can mainly be explained by the fact that Spain is a really newly developed portfolio, so there is also more ramping up.

Ingrid Daerden: I think it can mainly be explained by the fact that Spain is a really new developed portfolio, so there's also more ramping up. Even the assets, because we only disclose figures and include figures that they are related to more mature assets, but then they're just coming out of the development stage, I would say. For the rest, we see no reasons why in Spain there would be a lower occupancy.

Speaker #1: And even the assets because the only disclose figures include figures that are related to more mature assets . But then they just coming out of the of the development stage , I would say for the rest , we see no reasons why in Spain there would be a lower occupancy .

Speaker #5: And I think even to that point, I was quickly checking because we're giving a 96% occupancy rate for Spain. So I'm not sure where we're actually answering the question.

Stefaan Gielens: I think even to that point, I was quickly checking because we are giving a, I think, 96% occupancy rate for Spain.

Ingrid Daerden: Yes.

Stefaan Gielens: I am not sure we were actually answering the question. What we also see in Spain is that with some exceptions, the ramping up of newly built assets being delivered is actually going relatively fast, compared to what we saw recently in Western European countries, where it could easily take up to 24 and more months to get to a decent occupancy level. Going to another written question. This is about the Belgian market. Given that you need to sell EUR 300 million nursing homes, have you reached the maximum level of market concentration in this country? No, definitely not. Meaning that the reason why the Belgian competition authorities asked us to sell a portfolio of EUR 300 million, which basically also could be done in two different tranches, that is not the question. They are not trying to limit our market exposure to the Belgian market.

Speaker #5: But what we also see in Spain is that with some exceptions , that the ramping up of newly built assets being delivered is actually going relatively fast compared to what we saw recently in Western European countries , where it could easily take up to 24 and more months to get to a decent occupancy level Going to another written question Okay , this is about the Belgian market .

Speaker #5: Given that you need to sell 300 million nursing homes, have you reached the maximum level of market concentration in this country?

Speaker #5: No , definitely not . Meaning that the reason why we why the Belgian competition authorities asked us to sell a portfolio of 300 million , which basically also could be done in two different tranches .

Speaker #5: That's not a question . It's not about they're not trying to limit our market exposure to the Belgian market . They only want to make sure that there is sufficient competition available from the point of view of an operator who wants to do something with the real estate that they own .

Stefaan Gielens: They only want to make sure that there is sufficient competition available from the point of view of an operator who wants to do something with the real estate that they own. So what they want us to do by selling such an amount is making sure that other investors have a stake in the Belgian market and will be available in the future as competitors to Aedifica for the operations doing business in Belgium. There is absolutely nothing in what the market authorities asked us or required from us that is limiting us in doing new business in Belgium. On the contrary, they want us to remain active in Belgium because they want to see more competition. So if we would have to stop doing business in Belgium, then it would not help them if we sell EUR 300 million.

Speaker #5: So what they want us to do by selling such an amount , is making sure that other investors have an have a stake in the Belgian market and will be available in the future as competitors to AEDIFICA for the operators doing business in Belgium , there is absolutely nothing in .

Speaker #5: It's not what the market authorities asked us or required from us that is limiting us in doing new business in Belgium. On the contrary, they want us to remain active in Belgium because they want to see more competition.

Speaker #5: So, if we would have to stop doing business in Belgium, then it would not even help them. If we sell €300 million.

Speaker #5: So basically, we are totally free to keep growing in Belgium. I think that we answered the question. Yeah, it's quite a long one.

Stefaan Gielens: Basically, we are totally free to keep growing in Belgium. I think that we answered the question, yeah. It is quite a long one. For the office, Cofinimmo had the plan to set up an institutional GVV and then sell part of it. Is that still a possibility? I think that is already a reality because that structure is in place, yeah. I think that we are out of questions. So, I thank you all very much for attending this webcast. If you would have any further questions, please feel free to reach out to the people that you know within the company, and hopefully we will be in touch in the near future or at the Capital Markets Day in November in London. Thank you very much.

Speaker #5: Okay. For the officers had the plan to set up an institutional and sell part of it. Is that still a possibility?

Speaker #5: I think that is already a reality because that structure is in place. Yeah, okay. I think that we're out of questions.

Speaker #5: So, I thank you all very much for attending this webcast. If you have any further questions, please fill out the form. Feel free to reach out to the people that you know within the company.

Speaker #5: And hopefully, we will be in touch in the near future, or at the Capital Market Days in November in London. Thank you very much.

Operator: Thanks for participating in the call. You may now disconnect.

Browse all earnings call transcripts

Q2 2026 Aedifica NV Earnings Call

Request TrialDemo

Aedifica

Earnings