Q2 2026 CLS Holdings PLC Earnings Call

August 12, 2026

Fredrik Widlund: Good morning and welcome to CLS Holdings PLC H1 2026 results presentation. I am Fredrik Widlund, Chief Executive, and next to me is our new CFO, Patrick Symons. Patrik, who has been with us for almost 10 years, was previously our Group Financial Controller and will be a familiar face to many of you. Today, we will present you the interim results, give you an update on the portfolio and what we have seen in the first 6 months. First, I will start with the trading update that we published last week. We are facing near-term earnings pressure, and this is driven by the following factors. The disposal program is reducing income, and we have sold properties for over EUR 200 million since 2025 and now have a smaller portfolio. While leasing activity is steady, it is still slower than what we expected earlier in the year.

Fredrik Widlund: Good morning and welcome to CLS Holdings PLC H1 2026 Results Presentation. I am Fredrik Widlund, Chief Executive, and next to me is our new CFO, Patrick Symons. Patrik, who has been with us for almost 10 years, was previously our Group Financial Controller and will be a familiar face to many of you. Today, we will present you the interim results, give you an update on the portfolio and what we have seen in the first six months. First, I will start with the trading update that we published last week.

Speaker #1: Good morning, and welcome to the CLS Holdings PLC half-year 2026 results presentation. I am Fredrik Widlund, Chief Executive, and next to me is our new CFO, Patrick Simons.

Speaker #1: Patrick, who has been with us for almost 10 years, was previously our Group Financial Controller and will be a familiar face to many of you.

Speaker #1: Today, we will present you the interim results, give you an update on the portfolio, and share what we have seen in the first six months.

Speaker #1: But first, I will start with the trading update that we published last week. We are facing near-term earnings pressure, and this is driven by the following factors: the disposal program is reducing income, and we have sold properties for over £200 million since 2025, and now have a smaller portfolio.

Fredrik Widlund: We are facing near-term earnings pressure, and this is driven by the following factors. The disposal program is reducing income, and we have sold properties for over EUR 200 million since 2025 and now have a smaller portfolio. While leasing activity is steady, it is still slower than what we expected earlier in the year. The tenant at Spring Gardens is no longer seeking to extend the lease beyond September. This was initiated by them, but at a very large stage, they decided to not proceed. This is reflected in the H1 results and the revised full-year earnings guidance. Given the importance of reducing leverage and completing the disposal program, the board has concluded that it is appropriate to determine the level of distribution once the full-year earnings are known.

Speaker #1: While leasing activity is steady, it is still slower than what we expected earlier in the year. The tenant at Spring Garden is no longer seeking to extend the lease beyond September.

Fredrik Widlund: The tenant at Spring Gardens is no longer seeking to extend the lease beyond September. This was initiated by them, but at a very large stage, they decided to not proceed. This is reflected in the H1 results and the revised full-year earnings guidance. Given the importance of reducing leverage and completing the disposal program, the board has concluded that it is appropriate to determine the level of distribution once the full-year earnings are known. We will therefore not be paying an interim dividend and instead consider a single final dividend for the year, taking into account our dividend coverage policy as well our UK REIT distribution requirements for the full year. On the next slide, I would like to give you an update on our strategic priorities and how we are delivering against them. Firstly, reduce vacancy and improve earnings.

Speaker #1: This was initiated by them, but at a very late stage they decided not to proceed. And this is reflected in the H1 results and in the revised full-year earnings guidance.

Speaker #1: Given the importance of reducing leverage and completing the disposal program, the Board has concluded that it is appropriate to determine the level of distribution once the full-year earnings are known.

Speaker #1: We will, therefore, not be paying an interim dividend and will instead consider a single final dividend for the year, taking into account our dividend coverage policy as well as our UK REIT distribution requirements for the full year.

Fredrik Widlund: We will therefore not be paying an interim dividend and instead consider a single final dividend for the year, taking into account our dividend coverage policy as well our UK REIT distribution requirements for the full year. On the next slide, I would like to give you an update on our strategic priorities and how we are delivering against them. Firstly, reduce vacancy and improve earnings.

Speaker #1: On the next slide, I would like to give you an update on our strategic priorities and how we are delivering against them. Firstly, reduce vacancy and improve earnings.

Speaker #1: We signed 5.7 million of leases during the first half of the year, with the number of new leases increasing. We had fewer renewals due to fewer expiries, and hence less potential extension opportunities.

Fredrik Widlund: We signed EUR 5.7 million of leases during the first half of the year, with the number of new leases increasing. We had less renewals due to fewer expiries and hence less potential extension opportunities. We are seeing a good level of inquiries for our vacant space and signed a further EUR 1.9 million of leases in July. Vacancy was stable at 14.5%, with leasing activity largely offsetting expiries and disposals in the period. As you heard on the previous page, earnings were lower from a smaller portfolio after having sold over EUR 200 million of assets since the start of 2025, and expiries from the repositioning of New Printing House Square for redevelopment and the German insolvencies in 2025. This was partly offset by cost reductions across administrative, property, and financing expenses. This work will continue in the H2 2026.

Speaker #1: We're seeing a good level of enquiries for our vacant space, and signed a further £1.9 million of leases in July. Vacancy was stable at 14.5%, with leasing activity largely offsetting expiries and disposals in the period.

Speaker #1: As you heard on the previous page, earnings were lower from a smaller portfolio, and after having sold over £200 million of assets since the start of 2025, the expiries from the repositioning of New Printing House Square for redevelopment, and the German insolvencies in 2025.

Speaker #1: This was partly offset by cost reductions across administrative, property, and financing expenses. This work will continue in the second half of 2026. Secondly, execute sales to reduce loan-to-value to our target range of 35% to 45%.

Fredrik Widlund: Secondly, execute sales to reduce loan-to-value to our target range of 35% to 45%. Despite subdued investment markets, we were successful in selling properties for GBP 57 million in the first half of the year, with another GBP 41 million either exchanged or agreed. This follows GBP 144 million of sales in 2025, and we are making good progress to meet our GBP 100 million target for the year. The properties were sold at book value. In March, we reported that valuations appear to be stabilizing, with the rate of decline moderating and some properties increasing in value due to leasing activity. However, the last 6 months have seen a renewed increase in valuation declines on the back of shifting yield expectations across our markets. This meant that our LTV increased to 51.6%, despite paying down over GBP 57 million of debt during the period.

Fredrik Widlund: Secondly, execute sales to reduce loan-to-value to our target range of 35% to 45%. Despite subdued investment markets, we were successful in selling properties for GBP 57 million in the first half of the year, with another GBP 41 million either exchanged or agreed. This follows GBP 144 million of sales in 2025, and we are making good progress to meet our GBP 100 million target for the year. The properties were sold at book value. In March, we reported that valuations appear to be stabilizing, with the rate of decline moderating and some properties increasing in value due to leasing activity. However, the last six months have seen a renewed increase in valuation declines on the back of shifting yield expectations across our markets.

Speaker #1: Despite subdued investment markets, we were successful in selling properties for £57 million in the first half of the year, with another £41 million either exchanged or agreed.

Speaker #1: And this follows £144 million of sales in 2025, and we are making good progress to meet our £100 million target for the year. The properties were sold at book value.

Speaker #1: In March, we reported that valuations appear to be stabilizing, with the rate of decline moderating, and some properties increasing in value due to leasing activity.

Speaker #1: However, the last six months have seen a renewed increase in valuation declines, on the back of shifting yield expectations across our markets. This meant that our LTV increased to 51.6%, despite paying down over £57 million of debt during the period.

Fredrik Widlund: This meant that our LTV increased to 51.6%, despite paying down over GBP 57 million of debt during the period. This work will also continue. Excluding valuation movements, due to well-known macroeconomic drivers, LTV would have reduced to below 50%. Thirdly, complete all refinances due in the financial year. Since the start of the year, we have refinanced or repaid over GBP 130 million, or 57%, of what was maturing in the year. With a further 32% trade approved or agreed and due to close in August and early September. The remaining 11% is progressing well. We have already started working on some of the 2027 debt.

Speaker #1: This work will also continue, and excluding valuation movements, due to well-known macroeconomic drivers, LTV would have reduced to below 50%. And thirdly, complete all refinancings due in the financial year.

Fredrik Widlund: This work will also continue. Excluding valuation movements, due to well-known macroeconomic drivers, LTV would have reduced to below 50%. Thirdly, complete all refinances due in the financial year. Since the start of the year, we have refinanced or repaid over GBP 130 million, or 57%, of what was maturing in the year. With a further 32% trade approved or agreed and due to close in August and early September. The remaining 11% is progressing well. We have already started working on some of the 2027 debt. Fourth, investing in our properties to unlock the value within the portfolio. We are operating a strict capital allocation policy and focusing on investment that delivers short-term benefits while also considering some of our long-term planning opportunities.

Speaker #1: Since the start of the year, we have refinanced or repaid over £113 million, or 57% of what was maturing this year, with a further 32% credit approved or agreed and due to close in August and early September.

Speaker #1: The remaining 11% is progressing well, and we have already started working on some of the 2027 debt. And fourth, investing in our properties to unlock the value within the portfolio.

Fredrik Widlund: Fourth, investing in our properties to unlock the value within the portfolio. We are operating a strict capital allocation policy and focusing on investment that delivers short-term benefits while also considering some of our long-term planning opportunities. In H1, we spent EUR 12.5 million on CapEx and tenants' fit outs, which we believe will deliver high quality, faster-growing properties going forward. With that, I will hand you over to Patrick to take us through the financials.

Speaker #1: We are operating a strict capital allocation policy and focusing on investments that deliver short-term benefits, while also considering some of our long-term planning opportunities.

Speaker #1: In the first half, we spent £12.5 million on capex and tenant fit-outs, which we believe will deliver higher quality, faster-growing properties going forward. And with that, I will hand you over to Patrick to take us through the financials.

Fredrik Widlund: In H1, we spent EUR 12.5 million on CapEx and tenants' fit outs, which we believe will deliver high quality, faster-growing properties going forward. With that, I will hand you over to Patrick to take us through the financials.

Speaker #2: Thank you, Fredrik, and good morning, everyone. Today, I will cover our key financial metrics— in particular, the drivers of EPRA earnings in the period, half-year property valuations by country, and our significant progress in relation to refinancing our 2026 and future debt maturities.

Patrick Symons: Thank you, Fredrik, and good morning, everyone. Today, I will cover our key financial metrics, in particular, the drivers of EPRA earnings in the period, H1 property valuations by country, and our significant progress in relation to refinancing our 2026 and future debt maturities. Before discussing the financials in detail, I would like to recognize the CLS team's commitment and hard work in delivering these results and say how pleased I am to be leading the team. Moving on to slide six, I would like to start with some of our financial headlines. EPRA earnings are 2.7 pence per share, a 32.5% decline from last year, which reflects the impact of over GBP 200 million of property sales that have been executed since the start of 2025.

Speaker #2: Before discussing the financials in detail, I would like to recognize the CLS team's commitment and hard work in delivering these results, and say how pleased I am to be leading the team.

Speaker #2: Moving on to slide 6, I'd like to start with some of our financial headlines. EPRA earnings are 2.7 pence per share, a 32.5% decline from last year.

Speaker #2: This reflects the impact of over £200 million of property sales that have been executed since the start of 2025. EPRA NTA fell 11.5% to 177.7 pence per share, primarily reflecting the 4.6% local currency valuation decline in our portfolio, and the payment of the 2025 full-year dividend.

Patrick Symons: EPRA NTA fell 11.5% to 177.7 pence per share, primarily reflecting the 4.6% local currency valuation decline in our portfolio and the payment of the 2025 full-year dividend. Our loan-to-value ratio was 51.6%. Despite consciously lowering our debt during the period through property sales, valuation declines more than offset the positive impact of sales. Slide seven presents our EPRA income statement. The main driver of the reduction in EPRA earnings is the fall in net rental income. Rental income was impacted by the execution of our property disposal program and 2025 tenant departures, which I will discuss in more detail on the next slide. Property and administration costs are lower as a result of deliberate and significant actions taken to reduce our cost base and from the disposal of Spring Mews Student in mid-2025.

Speaker #2: Our loan-to-value ratio was 51.6%. Despite consciously lowering our debt during the period through property sales, valuation declines more than offset the positive impact of sales.

Speaker #2: Slide 7 presents our EPRA income statement. The main driver of the reduction in EPRA earnings is the fall in net rental income. Rental income was impacted by the execution of our property disposal program, and 2025 tenant departures, which I will discuss in more detail on the next slide.

Speaker #2: Property and administration costs are lower as a result of deliberate and significant actions taken to reduce our cost base, and from the disposal of Springmu Student in mid-2025.

Speaker #2: Finance costs were lower as our debt reduced by £80 million compared with the first half of 2025. This was as a result of loan repayments associated with the sale of properties.

Patrick Symons: Finance costs were lower as our debt reduced by GBP 80 million compared with H1 2025. This was as a result of loan repayments associated with the sale of properties. Through positive actions taken to offset the impact of sales and against market headwinds, we achieved EPRA earnings of GBP 11 million, or 2.7 pence per share for the period. Slide 8 outlines the movement in net rental income. Like-for-like net rental income fell 4.7% to GBP 50.8 million. This GBP 2.5 million reduction in like-for-like rental income is impacted most significantly by the block expiry of all leases at New Printing House Square, which happened in June 2025, and two tenant insolvencies in Germany that happened in H2 2025. Combined, these prior year tenant departures caused a GBP 2.6 million reduction in like-for-like net rental income.

Speaker #2: Through positive actions taken to offset the impact of sales, and against market headwinds, we achieved EPRA earnings of £11 million, or 2.7 pence per share, for the period.

Speaker #2: Slide 8 outlines the movement in net rental income. Like for like, net rental income fell 4.7% to 50.8 million pounds. This is 2.5 million this 2.5 million pound reduction in like for like rental income is impacted most significantly by the block expiry of all leases at New Printing House Square, which happened in June 2025, and two tenant insolvencies in Germany that happened in the second half of 2025.

Speaker #2: Combined, these prior-year tenant departures caused a 2.6 million pound reduction in like for like net rental income. Other lease expiries reduced like for like net rental income by 2.5 million pounds, but new leases and indexation totaling 2.6 million pounds more than offset this.

Patrick Symons: Other lease expiries reduced like-for-like net rental income by GBP 2.5 million, but new leases and indexation totaling GBP 2.6 million more than offset this. Turning to the right-hand side of the graph, the sale of more than GBP 200 million of properties since the start of 2025 reduced net rental income by GBP 4.6 million, the bulk of which related to the sale of Spring Mews Student. In summary, the key drivers for the reduction in net rental income from GBP 53.3 million to GBP 46.3 million were sales and prior year tenant departures limited to three properties in the portfolio. Slide 9 shows the movement in our cash and cash equivalents during the year. CLS utilizes several facilities which provide the business with financial flexibility. Total cash and cash equivalents and undrawn facilities are represented by the numbers above the dash bars.

Speaker #2: Turning to the right-hand side of the graph, the sale of more than £200 million of properties since the start of 2025 produced net rental income of £4.6 million.

Speaker #2: The bulk of which related to the sale of Spring Mews student. In summary, the key drivers for the reduction in net rental income from £53.3 million to £46.3 million were sales and prior-year tenant departures.

Speaker #2: Limited to three properties in the portfolio. Slide 9 shows the movement in our cash and cash equivalents during the year. CLS utilizes several facilities, which provide the business with financial flexibility.

Speaker #2: Total cash and cash equivalents, and undrawn facilities, are represented by the numbers above the dashed bars. As at 30 June, this was £79.4 million.

Patrick Symons: Total cash and cash equivalents and undrawn facilities are represented by the numbers above the dash bars. As at 30 June, this was GBP 79.4 million. The different elements of the movement in cash and cash equivalents are as follows. Cash flow from operations is made up of two elements. The first element, cash flow from operations before tenant incentives, was GBP 25.5 million. The second element is tenant incentives of GBP 7.1 million, which reduced this inflow to GBP 18.4 million. These tenant incentives predominantly represent cash outflows to fund two tenant fit outs in advance of long-term government leases in Germany. These leases were secured last year, well in excess of ERV.

Patrick Symons: As at 30 June, this was GBP 79.4 million. The different elements of the movement in cash and cash equivalents are as follows. Cash flow from operations is made up of two elements. The first element, cash flow from operations before tenant incentives, was GBP 25.5 million. The second element is tenant incentives of GBP 7.1 million, which reduced this inflow to GBP 18.4 million. These tenant incentives predominantly represent cash outflows to fund two tenant fit outs in advance of long-term government leases in Germany. These leases were secured last year, well in excess of ERV. The fit out works will result in a significant payback over the course of the leases once the tenants are fully in occupation. Interest payments and tax resulted in an GBP 18.4 million outflow. There was an outflow of GBP 7.3 million from the 2025 full year dividend.

Speaker #2: The different elements of the movement in cash and cash equivalents are as follows: cash flow from operations is made up of two elements. The first element, cash flow from operations before tenant incentives, was £25.5 million.

Speaker #2: The second element is tenant incentives of £7.1 million, which reduced this inflow to £18.4 million. These tenant incentives predominantly represent cash outflows to fund two tenant fit-outs in advance of long-term government leases in Germany.

Speaker #2: These leases were secured last year, well in excess of ERV. The fit-out works will result in a significant payback over the course of the leases, once the tenants are fully in occupation.

Patrick Symons: The fit out works will result in a significant payback over the course of the leases once the tenants are fully in occupation. Interest payments and tax resulted in an GBP 18.4 million outflow. There was an outflow of GBP 7.3 million from the 2025 full year dividend. However, this was lower than in the same period last year as a scrip alternative was offered for the final dividend. Property disposals and the repayment of debt generated net proceeds of GBP 3.9 million. And finally, we invested GBP 10.3 million of CapEx to upgrade our portfolio. Slide 10 shows the like-for-like change in valuation of our property portfolio. As a whole, the portfolio fell 4.6% in local currency, the main driver of this being yield expansion of 27 basis points.

Speaker #2: Interest payments and tax resulted in an £18.4 million outflow. There was also an outflow of £7.3 million from the 2025 full-year dividend. However, this was lower than in the same period last year, as a scrip alternative was offered for the final dividend.

Patrick Symons: However, this was lower than in the same period last year as a scrip alternative was offered for the final dividend. Property disposals and the repayment of debt generated net proceeds of GBP 3.9 million. And finally, we invested GBP 10.3 million of CapEx to upgrade our portfolio. Slide 10 shows the like-for-like change in valuation of our property portfolio. As a whole, the portfolio fell 4.6% in local currency, the main driver of this being yield expansion of 27 basis points. Starting with our UK portfolio, which was valued by Colliers for the first time, who were appointed due to RICS rotational requirements. This portfolio fell by 7.2%, driven by yield expansion of 55 basis points. In Germany, valuations were down 2.5% in local currency, again from yield expansion of 10 basis points. However, our properties in Dortmund increased in value.

Speaker #2: Property disposals and the repayment of debt generated net proceeds of £3.9 million. And finally, we invested £10.3 million of capex to upgrade our portfolio.

Speaker #2: Slide 10 shows the like-for-like change in valuation of our property portfolio. As a whole, the portfolio fell 4.6% in local currency, the main driver of this being yield expansion of 27 basis points.

Speaker #2: Starting with our UK portfolio, which was valued by Colliers for the first time, who were appointed due to RICS rotational requirements. This portfolio fell by 7.2%, driven by yield expansion of 55 basis points.

Patrick Symons: Starting with our UK portfolio, which was valued by Colliers for the first time, who were appointed due to RICS rotational requirements. This portfolio fell by 7.2%, driven by yield expansion of 55 basis points. In Germany, valuations were down 2.5% in local currency, again from yield expansion of 10 basis points. However, our properties in Dortmund increased in value. These properties benefit from long-term government leases that were secured last year. This demonstrates that valuers will reward successful lettings despite challenging market conditions.

Speaker #2: In Germany, valuations were down 2.5% in local currency, again from yield expansion of 10 basis points. However, our properties in Dortmund increased in value.

Speaker #2: These properties benefit from long-term government leases that were secured last year. This demonstrates that values will reward successful lettings despite challenging market conditions. In France, it was a similar story in Paris and Lyon, with yield expansion impacting both markets, resulting in a blended yield increase of 16 basis points.

Patrick Symons: These properties benefit from long-term government leases that were secured last year. This demonstrates that valuers will reward successful lettings despite challenging market conditions. In France, it was a similar story in Paris and Lyon, with yield expansion impacting both markets, resulting in a blended yield increase of 16 basis points. In summary, yield expansion was the main driver of valuation decline in all markets. Moving on to slide 11, I would like to summarize our debt strategy before providing more detail on our financing progress on the following slide. Most of our debt is secured either on an asset by asset basis or against a pool of assets in a particular geography. Our leverage is higher than we would like with an LTV ratio of 51.6%. This is above our target level of between 35% and 45%, and our sales program is focused on reducing leverage.

Patrick Symons: In France, it was a similar story in Paris and Lyon, with yield expansion impacting both markets, resulting in a blended yield increase of 16 basis points. In summary, yield expansion was the main driver of valuation decline in all markets. Moving on to slide 11, I would like to summarize our debt strategy before providing more detail on our financing progress on the following slide. Most of our debt is secured either on an asset by asset basis or against a pool of assets in a particular geography. Our leverage is higher than we would like with an LTV ratio of 51.6%. This is above our target level of between 35% and 45%, and our sales program is focused on reducing leverage.

Speaker #2: In summary, yield expansion was the main driver of valuation decline in all markets. Moving on to slide 11, I'd like to summarize our debt strategy before providing more detail on our financing progress on the following slide.

Speaker #2: Most of our debt is secured either on an asset-by-asset basis or against a pool of assets in a particular geography. Our leverage is higher than we would like, with an LTV ratio of 51.6%.

Speaker #2: This is above our target level of between 35% and 45%, and our sales program is focused on reducing leverage. Our strategy is to maintain predominantly fixed-rate debt and diversify maturity dates to reduce concentration risk and improve manageability.

Patrick Symons: Our strategy is to maintain predominantly fixed rate debt and diversify maturity dates to reduce concentration risk and improve manageability. Moving to slide 12, on which I will outline our refinancing progress during the year. This builds on the significant volume from last year, where over GBP 370 million of expiries were successfully managed. In H1 2026, we refinanced or repaid over half of our debt maturities. This included two of our more notable financings. Firstly, we replaced one of our revolving credit facilities with a new facility. This new facility provides access to lower rate euro-denominated debt and has resulted in an increase in available funds of approximately EUR 9 million compared with the previous facility. Secondly, we secured a bridging loan over our property at Spring Gardens.

Speaker #2: Moving to slide 12, moving to slide 12, on which I will outline our refinancing progress during the year. This builds on the significant volume from last year, where over £370 million of expiries were successfully managed.

Speaker #2: In the first half of 2026, we refinanced or repaid over half of our debt maturities. This included two of our more notable financings. Firstly, we replaced one of our revolving credit facilities with a new facility.

Speaker #2: This new facility provides access to lower-rate Euro-denominated debt and has resulted in an increase in available funds of approximately £9 million, compared with the previous facility.

Speaker #2: Secondly, we secured a bridging loan over our property at Spring Gardens. Despite the single tenant lease, which expires in September, we were able to secure the loan, which will provide financial flexibility through to the expected sale of the property in 2027.

Patrick Symons: Despite the single tenant lease, which expires in September, we were able to secure the loan, which will provide financial flexibility through to the expected sale of the property in 2027. Our net debt fell by GBP 44.2 million as a result of our disposal activity. Disposals also impacted on our weighted average debt maturity, which reduced to 3.2 years with early repayment of long-term debt associated with sales. As mentioned earlier, we are executing our sales program to reduce LTV, which is 51.6%, as half-year declines more than offset the impact of sales. Higher long-term interest rates meant recent refinancings increased our weighted average cost of debt marginally from 3.8% to 3.9%. Interest cover reduced from 1.9 to 1.6 times as a result of lower earnings, which were covered earlier. Looking forward, the remaining financings for 2026 consist of GBP 85.7 million of typical asset-backed loans.

Speaker #2: Our net debt fell by £44.2 million as a result of our disposal activity. Disposals also impacted our weighted average debt maturity, which reduced to 3.2 years, with early repayment of long-term debt associated with sales.

Speaker #2: As mentioned earlier, we are executing our sales program to reduce LTV, which is 51.6% at half-year, as declines more than offset the impact of sales.

Speaker #2: Higher long-term interest rates meant recent refinancings increased our weighted average cost of debt marginally from 3.8% to 3.9%. Interest cover reduced from 1.9 to 1.6 times as a result of lower earnings, which were covered earlier.

Speaker #2: Looking forward, the remaining financings for 2026 consist of £85.7 million of typical asset-backed loans. So far, £63.8 million has been agreed. We are in discussions with existing lenders regarding the remaining debt due in Q4, which represents approximately 11% of 2026 maturities.

Patrick Symons: Looking forward, the remaining financings for 2026 consist of GBP 85.7 million of typical asset-backed loans. So far, GBP 63.8 million has been agreed. We are in discussions with existing lenders regarding the remaining debt due in Q4, which represents approximately 11% of 2026 maturities. Looking forward, our debt maturity profile is manageable, with no more than GBP 190 million falling due in any one single year, and we have begun engaging with lenders in relation to our 2027 maturities. To summarize, earnings were impacted by over GBP 200 million of disposals since the start of 2025 and tenant departures in the same year, such that we expect 2026 full-year EPRA earnings to be in the range of 4.6 to 5.5 pence per share.

Patrick Symons: So far, GBP 63.8 million has been agreed. We are in discussions with existing lenders regarding the remaining debt due in Q4, which represents approximately 11% of 2026 maturities. Looking forward, our debt maturity profile is manageable, with no more than GBP 190 million falling due in any one single year, and we have begun engaging with lenders in relation to our 2027 maturities. To summarize, earnings were impacted by over GBP 200 million of disposals since the start of 2025 and tenant departures in the same year, such that we expect 2026 full-year EPRA earnings to be in the range of 4.6 to 5.5 pence per share. We have completed or exchanged on GBP 75.7 million of sales to date and expect to deliver approximately GBP 100 million of sales for the year, which will assist in reducing our leverage. Yield expansion in all markets has driven valuation drops.

Speaker #2: Looking forward, our debt maturity profile is manageable, with no more than £190 million falling due in any one single year, and we have begun engaging with lenders in relation to our 2027 maturities.

Speaker #2: So, to summarize, earnings were impacted by over £200 million of disposals since the start of 2025, as well as tenant departures in the same year.

Speaker #2: As such, we expect 2026 full-year EPRA earnings to be in the range of 4.6 to 5.5 pence per share. We have completed or exchanged on £75.7 million of sales to date, and expect to deliver approximately £100 million of sales for the year, which will assist in reducing our leverage.

Patrick Symons: We have completed or exchanged on GBP 75.7 million of sales to date and expect to deliver approximately GBP 100 million of sales for the year, which will assist in reducing our leverage. Yield expansion in all markets has driven valuation drops. However, we are encouraged by the positive impact our leasing activity can have on values. We have completed the majority of our 2026 refinancings and have started to focus on 2027 maturities. As mentioned earlier by Fredrik, no interim dividend will be paid, and the board intends to consider a final dividend for the entirety of 2026 based on full-year earnings. And with that, I will pass you back to Fredrik.

Speaker #2: Yield expansion in all markets has driven valuation drops; however, we are encouraged by the positive impact our leasing activity can have on values. We have completed the majority of our 2026 refinancings, and have started to focus on 2027 maturities.

Patrick Symons: However, we are encouraged by the positive impact our leasing activity can have on values. We have completed the majority of our 2026 refinancings and have started to focus on 2027 maturities. As mentioned earlier by Fredrik, no interim dividend will be paid, and the board intends to consider a final dividend for the entirety of 2026 based on full-year earnings. And with that, I will pass you back to Fredrik.

Speaker #2: As mentioned earlier by Fredrik, no interim dividend will be paid, and the Board intends to consider a final dividend for the entirety of 2026, based on full-year earnings.

Speaker #2: And with that, I'll pass you back to Fredrik.

Speaker #1: Thank you for that, Patrick. And let's now cover our markets and what we are seeing. So, starting with the UK, political developments and interest rate expectations continue to create market uncertainty.

Fredrik Widlund: Thank you for that, Patrick. Let us now cover our markets and what we are seeing. Starting with the UK, political developments and interest rate expectations continue to create market uncertainty. Commercial property transactions were down in H1 compared to the same period last year. London leasing take-up was stable, with supply of new prime offices very limited, and occupiers increasingly accept that uncertainty is the new normal and get on with their plans. In Germany, business sentiment has been improving, and there are expectations that the fiscal reforms are finally starting to create more activity. Commercial property transaction volumes increased in the period, and there are signs that momentum is building. Leasing take-up was stable here as well, with increasing signs of low new supply shifting demand to non-prime locations.

Speaker #1: Commercial property transactions were down in the first half compared to the same period last year. London leasing take-up was stable, with supply of new prime offices very limited.

Speaker #1: And occupiers increasingly accept that uncertainty is the new normal and get on with their plans. In Germany, business sentiment has been improving, and there are expectations that the fiscal reforms are finally starting to create more activity.

Speaker #1: Commercial property transaction volumes increased in the period, and there are signs that momentum is building. Leasing take-up was stable here as well, and there are increasing signs of low new supply shifting demand to non-prime locations.

Speaker #1: In France, the presidential election in May 2027, combined with short-term supply imbalances, is creating a cautious market. Despite this, commercial property transaction volumes increased in Q2, driven by larger corporate transactions, not least led by Blackstone's acquisition of over €2 billion in June.

Fredrik Widlund: In France, the presidential election in May 2027, in combination with short-term supply imbalances, is creating a cautious market. Despite this, commercial property transaction volumes increased in Q2 from larger corporate transactions, not least led by Blackstone's acquisition of over EUR 2 billion in June. Leasing take-up was muted and declined compared to last year, but we have continued to see good demand for smaller floor plates, and our own vacancy fell in the period. Overall, our market continued to experience modest economic growth and higher for longer interest rate environments. However, the outlook is gradually becoming more supportive with occupiers and investors accepting the situation, while the sentiment is very sensitive to external shocks, which does slow things down. Slide 16 illustrates our high quality and diversified tenant base, and I would like to draw your attention to a few key takeaways.

Speaker #1: Leasing take-up was muted and declined compared to last year. But we have continued to see good demand for smaller floor plates, and our own vacancy fell in the period.

Speaker #1: Overall, our market continues to experience modest economic growth and a higher-for-longer interest rate environment. However, the outlook is gradually becoming more supportive, with occupiers and investors accepting the situation, while the sentiment is very sensitive to external shocks, which does slow things down.

Speaker #1: So, slide 16 illustrates our high-quality and diversified tenant base, and I would like to draw your attention to a few key takeaways. We have 666 tenants across our three markets—and yes, that is the correct number.

Fredrik Widlund: We have 666 tenants across our three markets, and yes, that is the right number. This number has stayed relatively stable over the last few years. Close to 30% are government and a further 35% are large companies and organizations. When the NCA leaves, we expect to shift this to about 19% and 39% respectively, although that is still around 60%. The tenants continue to be well spread across different industries, giving further diversification. The top 10 now represents 33% of total contracted rent. Rent collection remains high at 98%. Moving on to the next slide, I will give an update on our leasing progress in the period. Leasing activity was stable in H1, and we secured GBP 5.7 million of annual rent.

Speaker #1: And this number has stayed relatively stable over the last few years. Close to 30% are government, and a further 35% are large companies and organizations.

Speaker #1: When the NCA leaves, we expect to shift this to about 19% and 39%, respectively, although that is still around 60%. The tenants continue to be well spread across different industries, giving further diversification, and the top 10 now represent 33% of our total contracted rent.

Speaker #1: And rent collection remains high at 98%. Moving on to the next slide, I will give an update on our leasing progress in the period.

Speaker #1: Leasing activity was stable in the first half, and we secured £5.7 million of annual rent. We had fewer expiries in the period, and hence fewer opportunities for renewals, but the number of new leases increased by over 20% compared to 2025.

Fredrik Widlund: We had less expiries in the period and hence less opportunities for renewals, but the number of new leases increased over 20% compared to 2025. We are seeing a good level of inquiries for our vacant space and signed a further GBP 1.9 million of leases in July. As a whole, leases were signed at 8.9% below ERVs. Excluding one lease at New Printing House Square, where a short lease was agreed ahead of the planned redevelopment in 2029 to reduce void cost of over GBP 1 million a year. The other 56 lettings were on average completed in line with ERV. We are making strategic decisions on a case-by-case basis to ensure we minimize void costs, and that might mean not always maximizing rent to ensure occupancy.

Speaker #1: We're seeing a good level of inquiries for our vacant space and signed a further £1.9 million of leases in July. As a whole, leases were signed at 8.9% below ERVs.

Speaker #1: Excluding one lease at New Printing House Square, where a short lease was agreed ahead of the planned redevelopment in 2029 to reduce the void cost of over £1 million a year, the other 56 lettings were on average completed in line with ERV.

Speaker #1: We are making strategic decisions on a case-by-case basis to ensure we minimize void costs, and that might mean not always maximizing rent in order to ensure occupancy.

Speaker #1: Like-for-like ERVs for the portfolio were down 1.8%, but we expect rental growth to resume as tenants will pay for the right properties in the right locations, and the supply imbalance is emerging as very few new offices are delivered.

Fredrik Widlund: Like-for-like ERVs for the portfolio were down 1.8%, but we expect rental growth to resume as tenants will pay for the right properties in the right locations, and a supply imbalance is emerging as very few new offices are delivered. On the right-hand side, you can see that our reported vacancy was stable at 14.5%, and new leases and renewals largely offset expiries and disposals in the period. We had particularly strong leasing performance in France, with vacants reducing 4.4% to 7.7% on the back of strong demand for smaller floor plates. I will now move on to an update on our sales progress on slide 18. As highlighted earlier, we are making good progress on sales to reduce debt, but also to free up cash for investment in our portfolio.

Speaker #1: On the right-hand side, you can see that our reported vacancy was stable at 14.5%, and new leases and renewals largely offset expiries and disposals in the period.

Speaker #1: We had particularly strong leasing performance in France, with vacancy reducing 4.4% to 7.7% on the back of strong demand for smaller floor plates. I will now move on to an update on our sales progress on Slide 18.

Speaker #1: As highlighted earlier, we're making good progress on sales to reduce debt, but also to free up cash for investment in our portfolio. In the period, we sold properties for £57 million at book value, with the main sale being The Bricks in Essen, and in July, we completed on Columbia House in Bracknell.

Fredrik Widlund: In the period, we sold properties for EUR 57 million at book value, with the main sale being The Brix in Essen. In July, we completed on Columbia House in Bracknell. We have also exchanged on the Clockwork Building in London and are under offer for another property in Germany. This all means that we are on track to deliver on our EUR 100 million sales target for the year. We will keep monitoring the quantum of sales depending on how valuations move and leasing progresses, which also impacts our loan-to-value and earning capacity. We are also investing in the portfolio, and on the next few slides, I will talk about how we believe this will drive value over time. On slide 19, we have some of the current projects we are completing, as well as near and medium-term opportunities that we are pursuing.

Speaker #1: We have also exchanged on the Clockwork building in London, and are under offer for another property in Germany. This all means that we are on track to deliver on our £100 million sales target for the year.

Speaker #1: We will keep monitoring the quantum of sales, depending on how valuations move and leasing progresses, which also impacts our loan-to-value and earning capacity. We are also investing in the portfolio, and on the next few slides I will talk about how we believe this will drive value over time.

Speaker #1: On slide 19, we have some of the current projects we are completing, as well as near- and medium-term opportunities that we're pursuing. The two German projects on the left are pre-lets.

Fredrik Widlund: On slide 19, we have some of the current projects we are completing, as well as near and medium-term opportunities that we are pursuing. The two German projects on the left are pre-lets. For The Yellow, we have now handed over the space to the tenant, as well as agreed additional space. At Gotic Haus, we are working on the fit outs to hand over the space to the new tenant early next year. For Spring Gardens, we are working with London Square on the planning application, which was submitted at the end of February. The application is now expected to be considered by the planning committee in September 2026, following delays due to the local elections in May, for a very exciting scheme that would improve further the attraction of Vauxhall and provide much needed housing.

Fredrik Widlund: The two German projects on the left are pre-lets. For The Yellow, we have now handed over the space to the tenant, as well as agreed additional space. At Gotic Haus, we are working on the fit outs to hand over the space to the new tenant early next year. For Spring Gardens, we are working with London Square on the planning application, which was submitted at the end of February. The application is now expected to be considered by the planning committee in September 2026, following delays due to the local elections in May, for a very exciting scheme that would improve further the attraction of Vauxhall and provide much needed housing. At Maximilian Forum, located in Martinsried outside Munich, we are now close to completing the conversion to co-labs and ancillary space for tenants.

Speaker #1: And for the yellow, we have now handed over the space to the tenant, as well as agreed on additional space. At Gothic House, we're working on the fit-outs to hand over the space to the new tenant early next year.

Speaker #1: For Spring Gardens, we're working with London Square on the planning application, which was submitted at the end of February. The application is now expected to be considered by the planning committee in September 2026, following delays due to the local elections in May.

Speaker #1: For a very exciting scheme that will further improve the attraction of Vauxhall and provide much-needed housing. At Maximilian Forum, located in Martin Street outside Munich, we are now close to completing the conversion to collabs and ancillary space for tenants.

Fredrik Widlund: At Maximilian Forum, located in Martinsried outside Munich, we are now close to completing the conversion to co-labs and ancillary space for tenants. The new Munich underground station is also opening in 2027, and we are in discussions with several biotech companies about taking space. At New Printing House Square, we have made progress on positioning the building for redevelopment by aligning all leases for expiry in 2029. We have also progressed the plans for conversion to a residential-led scheme and have submitted the pre-application. In the UK, we have also received planning approval to convert a standalone student flats that was not included in the student sale last year. The serviced apartments that will be operated by our current hotel partner, and we are also progressing with other alternative use projects that will add long-term value.

Speaker #1: The new Munich Underground Station is also opening in 2027, and we are in discussions with several biotech companies for space. At New Printing House Square, we have made progress on positioning the building for redevelopment by aligning all leases for expiry in 2029.

Fredrik Widlund: The new Munich underground station is also opening in 2027, and we are in discussions with several biotech companies about taking space. At New Printing House Square, we have made progress on positioning the building for redevelopment by aligning all leases for expiry in 2029. We have also progressed the plans for conversion to a residential-led scheme and have submitted the pre-application. In the UK, we have also received planning approval to convert a standalone student flats that was not included in the student sale last year. The serviced apartments that will be operated by our current hotel partner, and we are also progressing with other alternative use projects that will add long-term value. Let us now move to the last two slides of the presentation from slide 20. The walk on this slide describes the opportunities we have to drive increased rental income in the portfolio.

Speaker #1: We have also progressed the plans for conversion to a residential-led scheme, and have submitted the pre-application. In the UK, we have also received planning approval to convert the standalone student flats that were not included in the student sale last year to serviced apartments, which will be operated by our current hotel partner. We're also progressing with other alternative use projects that will add long-term value.

Speaker #1: Let's now move to the last two slides of the presentation, starting with slide 20. The walk on this slide describes the opportunities we have to drive increased rental income in the portfolio.

Fredrik Widlund: Let us now move to the last two slides of the presentation from slide 20. The walk on this slide describes the opportunities we have to drive increased rental income in the portfolio. The walk starts on the left-hand side to our contracted rent of GBP 100.4 million. The GBP 15.9 million represents the value of current space that is being marketed. As you can see, 30% of the vacancy is concentrated to a few properties in the UK: The Artesian, The Code, and New Printing House Square, which are all in good central London locations. Artesian and The Code are grade A spaces and we are making progress in gradually filling them up.

Speaker #1: The walk starts on the left-hand side of our contracted rent of £100.4 million. The £15.9 million represents the value of current space that is being marketed.

Fredrik Widlund: The walk starts on the left-hand side to our contracted rent of GBP 100.4 million. The GBP 15.9 million represents the value of current space that is being marketed. As you can see, 30% of the vacancy is concentrated to a few properties in the UK: The Artesian, The Code, and New Printing House Square, which are all in good central London locations. Artesian and The Code are grade A spaces and we are making progress in gradually filling them up. Last time we presented this walk, we also had two properties in Lyon included in the top list, but they are now essentially let. The EUR 6.4 million of over-rented space that we now have is an effect of indexation, mainly in Germany, where nearly 75% of the portfolio is index-linked. A further 10% is subject to stepped rent uplifts, which has driven rent above ERV.

Speaker #1: As you can see, 30% of the vacancy is concentrated in a few properties in the UK: the Artisan, The Code, and New Printing House Square.

Speaker #1: All are in good central London locations. Artisan and The Code are Grade A spaces, and we are making progress in gradually filling them up.

Speaker #1: Last time we presented this walk, we also had two properties in Lyon included in the top list, but they are now essentially let. The £6.4 million of over-rented space that we now have is an effect of indexation.

Fredrik Widlund: Last time we presented this walk, we also had two properties in Lyon included in the top list, but they are now essentially let. The EUR 6.4 million of over-rented space that we now have is an effect of indexation, mainly in Germany, where nearly 75% of the portfolio is index-linked. A further 10% is subject to stepped rent uplifts, which has driven rent above ERV.

Speaker #1: Mainly in Germany, where nearly 75% of the portfolio is index-linked. A further 10% is subject to stepped rent uplifts, which has driven rent above ERV.

Speaker #1: So overall, this means that we have an opportunity to drive rent to £110 million, and in addition, we have a further £15.6 million of ERV in potential refurbishments, although this is subject to availability of capital and pre-lets.

Fredrik Widlund: Overall, this means that we have an opportunity to drive rent to EUR 110 million. In addition, we have a further EUR 15.6 million of ERV in potential refurbishments. All of this is subject to availability of capital and pre-lets. That takes the potential to over EUR 125 million. We have said this before, securing new leases is our largest opportunity to drive growth, but also to offset some of the impact from the sales program. Finally, on the last slide, I would like to leave you with a few key takeaways in relation to our strategic priorities and expectations for the H2 of the year. Leasing markets remain stable across our regions with the want for modern, well-located offices evident. While leasing activity was steady, it was still slower than what we expected earlier in the year.

Speaker #1: That takes the potential to over 125 million. And, as we have said before, securing new leases is our largest opportunity to drive growth, but also to offset some of the impact from the sales program.

Speaker #1: So finally, on the last slide, I'd like to leave you with a few key takeaways in relation to our strategic priorities and expectations for the second half of the year.

Speaker #1: So, leasing markets remain stable across our regions, with demand for modern, well-located offices evident. While leasing activity was steady, it was still slower than what we expected earlier in the year.

Speaker #1: That said, our leasing pipeline for the second half of the year is encouraging. We signed a further 1.9 million of leases in July, with more in the pipeline.

Fredrik Widlund: Our leasing pipeline for the H2 of the year is encouraging, and we signed a further GBP 1.9 million of leases in July and with more in the pipeline. We are executing on the sales plan and expect to meet the target of GBP 100 million of sales for 2026. How quickly we will be within our loan-to-value target range is dependent on future valuations. Refinancing are progressing well, with 89% completed, credit approved or agreed, and we have started work on 2027 maturities. We are investing in the portfolio but apply a strict capital allocation policy that prioritizes pre-lets and shorter paybacks, which we believe will deliver higher quality, faster-growing properties going forward.

Speaker #1: We are executing on the sales plan and expect to meet the target of £100 million of sales for 2026. How quickly we will be within our loan-to-value target range is dependent on future valuations.

Speaker #1: Refinancing is progressing well, with 89% completed, credit approved, or agreed, and we have started work on 2027 maturities. We are investing in the portfolio, but apply a strict capital allocation policy that prioritizes pre-lets and shorter paybacks, which we believe will deliver higher-quality, faster-growing properties going forward.

Speaker #1: With near-term earnings pressures from sales and expiries, we will continue to concentrate on what we can influence to deliver a more focused portfolio, make sure we have operational efficiency, and maintain the financial flexibility that will position our business for long-term growth as market conditions improve.

Fredrik Widlund: With near-term earnings pressures from sales and expiries, we will continue to concentrate on what we can influence to deliver a more focused portfolio, make sure we have operational efficiency and the financial flexibility that will position our business for long-term growth as market conditions improve. So with that, I would like to finish today's presentation. Thank you all for attending, and we will now open up for questions.

Speaker #1: So with that, I'd like to finish today's presentation. Thank you all for attending, and we will now open it up for questions.

Speaker #2: Thanks, thanks. Good morning, it's Tom Musson from Berenberg. Just a question on Spring Garden. I just want to check, how secure is the expected sale of that site in the event of, say, any more planning delays or perhaps any changes that you might have to make to the planning application?

Tom Musson: Thanks. Good morning. It is Tom Musson from Berenberg. Just a question on Spring Gardens. Just want to check, how secure is the expected sale of that site in the event of, say, any more planning delays or perhaps any changes that you might have to make to the planning application? Are there any situations like that where the buyer is not necessarily obligated to proceed?

Speaker #2: Are there any situations like that where the buyer isn't necessarily obligated to proceed?

Speaker #1: Well, as in any contract, there is, of course, a long stop date. Although I'm not going to disclose when that is, it is in the future, and we're working very closely together to achieve planning.

Fredrik Widlund: Well, as in any contract, there is, of course, a long stop date. Although I am not going to disclose when that is, but it is in the future, and we are working very closely together to achieve planning. This is a deal that both parties really want to do.

Speaker #1: I mean, this is a deal that both parties really want to do.

Speaker #2: Awesome, thanks. Just a question on refinancing: at this point, are any lenders requiring any additional covenants or margin increases? Also, what's the marginal cost of finance right now on GBP and euro debt?

Tom Musson: Awesome. Thanks. Just a question on refinancing. At this point, are any lenders requiring any additional covenants or margin increases? I guess, what is the marginal cost to finance right now on GBP and EUR debt?

Speaker #1: No, we're not seeing any additional covenants. We're refinancing our loans very much with the same lenders—similar conditions in terms of the margins.

Patrick Symons: No, we are not seeing any additional covenants. We are refinancing our loans very much with the same lenders, similar conditions. In terms of the margins, we are seeing around 1% to 2% margins for the loans.

Speaker #1: We're seeing around 1% to 2% margins for the loans, which is fairly standard.

Tom Musson: Okay, thanks.

Patrick Symons: Fairly standard.

Speaker #2: Thank you. Maybe one last one: are there any lenders flagging any concerns over interest cover, or are all the covenants LTV-based?

Tom Musson: Thank you. Maybe last one. Are there any lenders flagging any concern over interest cover? Or are all the covenants LTV based?

Speaker #1: So, we have a number of covenants. We've got good headroom on those of 20% to 31%, as we've outlined in the financials. We have good relationships with our lenders.

Patrick Symons: We have a number of covenants. We have good headroom on those of 20% to 31%, as we have outlined in the financials. We have good relationships with our lenders. We report on covenants every 6 months, and we are not flagging any issues in terms of that.

Speaker #1: We report on covenants every six months, and we're not flagging any issues in terms of that. I mean, it might be worth saying as well, we do secure lending on an SPV basis.

Tom Musson: Thank you.

Fredrik Widlund: It might be worth saying as well, we do secure lending on an SPV basis, so the underwriting would be for each individual property. It would not be for the group. It is totally dependent on how that individual property is delivering.

Speaker #1: So, the underwriting would be for each individual property. It would not be for the group. So, it's totally dependent on how that individual property is delivering.

Speaker #3: My name is James from Perham. I'm just following up on a question about Spring Garden. Is this in terms of the timing, assuming planning is granted?

[Analyst] (Peel Hunt): Morning. It is James from Peel Hunt. Following off Tom Musson's question on Spring Gardens, just in terms of the timing, assuming planning is granted, are there any other conditions that need to be met before the sale then goes through? When do you expect that sale to complete, essentially?

Speaker #3: I mean, are there any other conditions that need to be met before the sale then goes through? And when do you expect that sale to complete, potentially?

Speaker #1: I mean, as in any contract, there will always be certain things that need to be fulfilled, but the planning is the main one. We would expect to proceed with that one in the first half of 2027.

Fredrik Widlund: As in any contract, there will always be certain things that need to be fulfilled, but the planning is the main one. We would expect to proceed with that one in the H1 2027.

Speaker #3: Thanks.

[Analyst] (Peel Hunt): Thanks.

Speaker #2: Thanks. Beyond these, from Panama Liberum, just two questions, please. Firstly, on ERVs, how much confidence do you have in the ERVs across the regions and being able to lease at or above ERV?

Bjorn Zietsman: Thanks. Bjorn Zietsman from Panmure Liberum. Just two questions, please. Firstly on ERVs, how much confidence do you have in the ERVs across the regions and being able to lease at or above ERV? The second question I have is just on the German insolvencies. Do you see that as isolated, or do you think that is potentially sector specific? If so, are there any other contagion across the portfolio?

Speaker #2: The second question I have is just on the German insolvencies. Do you see that as isolated, or do you think that's potentially sector-specific? And if so, is there any other contagion across the portfolio?

Speaker #1: I mean, we start with the ERV question. As I said earlier on, we are pretty confident that we will be seeing continued rental growth.

Fredrik Widlund: If we start with the ERV question, as I said earlier on, we are pretty confident that we will be seeing a continued rental growth. As I also mentioned, we will be pragmatic, and we would rather fill up the space. On some properties, like New Printing House Square, yes, we will accept a rent that will be below ERV. That is a little bit more of a one-off, given that we can only offer very short leases for that property. Overall, for the portfolio, we do expect rental growth to resume, and that is very much driven by the supply and demand balance. David, do you want to take the second one?

Speaker #1: As I also mentioned, we will be pragmatic. We would rather fill up the space. So on some properties, like New Printing House Square, yes, we will accept a rent that will be below ERV. But that is a little bit more of a one-off, given that we can only offer very short leases for that property.

Speaker #1: But overall, for the portfolio, we do expect rental growth to resume, and that's very much driven by the supply and demand balance.

Speaker #2: We don't want to take the second one.

Speaker #1: Yeah. In terms of the insolvencies in Germany, that's very much isolated. We've got good rental collection, and we're not seeing any further insolvencies.

[Company Representative] (CLS Holdings): Yeah. In terms of the insolvencies in Germany, that is very much isolated. We have got good rental collection, and we are not seeing any further insolvencies. We monitor our tenants, and that is completely isolated.

Speaker #1: We monitor our tenants and, yeah, that's completely isolated.

Speaker #2: Thank you.

Bjorn Zietsman: Thank you.

Speaker #3: So there was one question on the line about Spring Gardens, but I think that was answered. There's a similar question to James's there. And then we have another one about whether it would be possible to sell out of France or Germany, or if any sale would lead to a large tax bill or other significant penalty.

[Company Representative] (CLS Holdings): So there was one question on the line about Spring Gardens, but I think that was answered. That is a similar question to James's there. Then we have another one. Would it be possible to sell out of France or Germany, or would any sale lead to a large tax bill or other significant penalty?

Speaker #1: Well, I mean, we constantly review our portfolio, but at the moment, we're very happy with the exposure we have in our three countries.

Fredrik Widlund: Well, we constantly review our portfolio. But at the moment, we are very happy with the exposure we have in our three countries. But as I said, we constantly look at other ways of optimizing. So yes, it is possible you could do that, but at the moment, it is not something that we are planning to do. All right. In that case, thank you all again for attending and wish you all a good day. Thank you.

Speaker #1: But as I said, we constantly look at other ways of optimizing. So yes, it's possible you could do that, but at the moment, that's not something that we are planning to do.

Speaker #1: All right. In that case, thank you all again for attending. I wish you all a good day. Thank you.

Operator: Thank you.

Patrick Symons: Thank you.

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Q2 2026 CLS Holdings PLC Earnings Call

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