WDP.BRWDP.BRBRU
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Joost Uwents: Good morning. Wolvertem calling. Welcome team WDP wherever you are in Europe. Welcome also to the readers of the TET and LeKo and of course, welcome to our investor community. And I think we can say it's a good morning with the happy team around me for the Presentation of the full year results, '25. If we look to, let's say, other operations and the operational results, we can say, we delivered again a clean sheet with an EPS of EUR 1.53. It's an underlying growth of 7% year-on-year, an occupancy rate of 97.7%, more than 0.5 million of square meters new leases, a portfolio growing to EUR 9 billion, all backed by a perfect balance sheet with a loan-to-value of 40% and a net debt to EBITDA of 7.5. And as an [ exam ], we could indeed -- we can also use our balance sheet now as a real value enabler with our new rating, our A3 rating of Moody's, which gives us a top 5 balance sheet within the quoted real estate world in Europe. And if we look then a little bit close into our operations, we can really say that we did a perfect job. About 550,000 square meters of new leases, we can say that the WDP platform can capture market demand more than our market share. We secured EUR 600 million of new investments at a net initial yield of 6.8%, which means also that we could keep our investment pipeline in execution at a very high level, up EUR 700 million with the same expected net initial yield. And of course, for all this, the funding is in place. So we can really say that we are in full execution and fully on track to reach our EUR 1.7 EPS target for '27. So yes, indeed, we see the EUR 1.7 in '27 at the horizon, and we are fully on track. Yes, we still have to lease further and to execute our investment pipeline, but we see that most of our new initiatives are already looking beyond '27 and are value creating beyond '27. So this makes that we have to look further and that we are ready to extend our horizon. So yes, we extend our horizon to 2030 with a clear goal and a clear focus. Our goal is to scale into an integrated EU platform, providing total supply chain infra solutions with our classical focus, delivering above-average growth with below average risk profile. And this brings us to BLEND&EXTEND2030 as from now so much more than just a financial hedging project, it becomes a real plan, a real plan based on our proven building blocks, yes, built. Yes, there is structural demand and we are able to capture it. Yes, we will continue to load it with selective acquisitions, new developments in existing and in new markets like Spain and Italy. Yes, we still can further extract value from our internal, from our existing portfolio with indexation, rental growth and active asset management. Yes, we will neutralize further by adding total energy solutions and keep on decarbonizing the logistics supply chain. And yes, of course, we will stay disciplined. What do you want with Mick. Besides me, I have to stay disciplined and create value with risk-adjusted capital allocation. So a proven, scalable, multi-driver model that brings us and let us grow further into the future. Mick?
Mickaël Hauwe: Yes. Thank you, Joost. Now how does that strategic picture translate into our target setting for BLEND&EXTEND2030. We believe that we can continue the envisaged EPS growth rhythm of our '27 plan and roll forward the attractive plus 6% average growth rate towards 2030 translating into an EPRA EPS of at least EUR 2 by 2030. Also, considering that we already generate a very high recurring cash return on equity of 7%, 8% to start with, even with a minimum portfolio revaluation of just over 1% per year, we believe we are set for double-digit total returns throughout the period of at least 10% per year, measured as NAV growth plus dividends paid. The key assumption here is that we have a fully internally funded EUR 500 million CapEx per year. Why EUR 500 million? Because that way it is designed to be independent of external equity raisings considering the higher cost of capital versus the past so we can make the 5-year plan fully internally funded, which we believe is a very strong message and attractive. How can we do that? Well, we have a recurring yearly strengthening of our equity of EUR 250 million to EUR 300 million being a combination of retained earnings, stock dividends and the regular contributions in kind. Hence, that should enable us to achieve that growth and maintain a stable capital structure with net debt to EBITDA staying around 8x and a loan to value around 40%, fully in tune with our top-tier A3 credit rating. On the next slide, you can see our multi-driver approach at work. As we have been seeing over the last couple of years, we have adapted ourselves to the current environment and a more complex world and the way we create value. And what we try to do is build layers. We have a first layer of internal growth coming from indexation, rent reversion and active asset management initiatives, then we add the impact of external growth, a balanced mix between acquisitions and developments, and we add another layer of our energy investments. And yes, we can cope with the cost of debt reset, which is manageable and only gradual and for which you can find more details in the remainder of the presentation. But combined -- and that is important, it gives us an average plus 6% throughout 2030, leading to, as you said, above average growth for the below average risk. Now turning to the outlook for '26. We have an EPRA EPS guidance of EUR 1.60. So that's 5% growth year-on-year with the key underlying assumptions being in tune with the drivers just mentioned, a combination of internal and external growth. And that's important as well, operational and financial KPIs staying strong with occupancy rates above 97% and in line with the long-term average and also with stable leverage metrics. This figure is also looking robust already now at the start of the year as most of the work has been done, and our teams are now working in full force to get to that finalization of the EUR 1.70 in '27 and are very eager to start the work for the 2030 plan. Joost, over back to you.
Joost Uwents: Thank you, Mick. So we can say that we are ready to build the platform of tomorrow from a regional leader in the past to a core EUR 10 billion plus European platform, where we can use our scale in order to help our clients with cross-border solutions. We can do it efficient and profitable. And so enabling total returns and indeed, very important for us as a real estate company, this gives us a superior access to capital. And for this growth, we will be supported further by the next-generation of the family, De Pauw, who showed again their long-term commitment as a reference shareholder by appointing 2 new directors in our board. And besides this, we're also strengthening our Board with more international knowledge. And this is also important in order to become a real European player. So yes, indeed, we are ready for delivering today with a vision for tomorrow. And this all will generate an above-average growth with a below average risk profile. And now I will give the floor to Alexander in order to answer all your questions. But before we do that, we give you just a little overview of some recent real estate projects. See you in a minute. [Presentation]
Alexander Makar: [Operator Instructions] Before we address the questions, maybe the first important one, Joost, what's your take currently on the market?
Joost Uwents: Indeed, I think the first question of you all is still demand. And there, we can be -- give you -- we can give you a clear answer. But more than 0.5 million of square meters new leases in '25, a normalizing occupancy range between 97% and 98% and a normalizing retention rate around 90%, we can say that demand for logistics real estate in Europe is normalizing from the exceptionally high during the pandemic years towards the multiyear pre-pandemic average with the market balance gradually improving as tenants optimized their inventory and operations and new developments remain disciplined. Why is the pickup of market demand still depends on consumer spending and business confidence? The last quarter, we really witnessed an improving leasing momentum by our commercial teams. Of course, demand is still more dynamic for smaller and high-end units up to 10,000 square meters, but it is now also selectively extending into larger-sized units, mainly for those clients that are able to take strategic decisions in the still volatile world. And this is an important sign. And more recently, we even see some cautious, bigger tenders in the market again. Demand is mostly originating from specific sectors, such as food, pharma, e-commerce as well as strong performing companies expanding their market positions. Our commercial platforms remains well positioned to capture that demand. Considering our high-quality portfolio, it's about having the right building at the right location besides, of course, our deep-rooted international network and our flexibility to adopt buildings to meet the client needs. Looking ahead, the medium- to long-term fundamentals for logistics and industrial real estate remains positive, underpinned by limited land availability, constrained supply and the continued need for more resilient and regionally diversified supply chains. As I said in my intro, a resilient supply chain is not a nice to have, it's essential infrastructure.
Alexander Makar: Thank you. The first question is coming from Marios Pastou from Bernstein.
Marios Pastou: Perfect. I do have two from my side, I'll ask one by one. So just firstly, on the capital allocation across our country mix, can you maybe give us an idea of the order of priorities as part of your plan 2030. Will France and Germany be a priority, for example, as that's been your target for the last couple of years. The Germany hasn't really ramped up yet? Or will his be purely opportunity-driven?
Mickaël Hauwe: We never give that split of our intended capital allocation because the moment we say X, the next day, it will be Y., but so it will be a balanced mix across the geographies and yes, if we can do something more in the new markets, then it's always a plus of course.
Marios Pastou: So this is not purely opportunistically driven. There's no kind of priority in terms of which market to enter.
Mickaël Hauwe: Where we can generate the value measured as EPS growth with a good long-term solid total return.
Marios Pastou: Okay. Very clear. And then just secondly, in terms of the establishing the presence in Spain and Italy, are you looking land bank. Are you looking for existing portfolios with upside potential? And maybe give us idea of how many opportunities you're currently tracking there?
Joost Uwents: Well, I think there, we will look as to those countries as we did in the past and as we do in every other country. So we will go -- first, let's say, there will be 1 difference. Before we always said, we need first the portfolio and then we go for a team, and I think we learned from Germany, which is, of course, a very difficult country that it is better to have first a country manager than letting them make a plan and then indeed starting it. So we will first go for country managers, letting them make a plan, and then we will go into the countries with a plan and that will depend on -- and it will always be a combination like in blend. Yes, we will look for existing portfolios. Yes, we will do the developments. And it's all based on with what can we create value that can be with an existing site, with a development, it will always be the combination. That's the reason why our plans are called blend, a combination of internal and external growth.
Alexander Makar: The next question in line is from Suraj from Green Street.
Suraj Goyal: There's a couple of questions from me, I'll also do it one by one. First one is, I guess you touched on it a little bit, but just on the desire for a presence in Spain and Italy. I appreciate you can't necessarily give any sizing by 2030, and you did touch on your approach. But just taking a step back and thinking higher level, what's kind of drawing you into these markets, what do you really like from a supply and demand perspective?
Joost Uwents: Well, I think, first of all, we add them to the portfolio because it's logic. We come from the Benelux added France and Germany and then we go down so that we can offer better more international solutions to our clients. That's the first idea. And then for the rest, yes, it will indeed depend on opportunities and possibilities. And yes, it is part of the 2030 plan, but within the capital allocation of the EUR 500 million per year.
Suraj Goyal: Perfect. Very clear. And just a second one, again, it's quite broad just on the Benelux as a whole. I know you mentioned the demand drivers earlier and occupancy has been increasing within your own portfolio. Do you think the vacancy has peaked for a wider market within the Benelux? And what are your thoughts for future rent growth?
Alexander Makar: Yes. Suraj, maybe just a small add-on on the overall market. So what we basically have seen over 2025 is a bottoming in take-up levels over the first half of 2025. Q3, Q4, that data that is still out, you currently see a quarterly take up in most markets, and that's in our core markets as well as in Romania. When it comes to vacancy, stabilizing between 4.5%, 5%. What you, every now and then, see is when you look at the key figures of country level, you might see an increase in outlier in France, for example, 6% or in Netherlands. It's around 5%. But when you look through to micro levels, you typically see that, for example, in the Randstad, it's closer to 3.5%. So there, we actually see that the underlying vacancy is also very low. And as Joost already mentioned, it's also supported by land scarcity, permitting grid connection, which is also creating challenging times to add new space. So that's in terms of the spot vacancy that we see in the existing markets. When you then look at new construction starts, it's also broad-based down with 50%. Typically, you have closer to 5% of total stock being delivered every year, that's already down to 2.5% as well. And it's also 80% plus pre-let. So that's in terms of vacancy and in terms of rental growth.
Mickaël Hauwe: Yes, on the market rental growth, we think the most logical picture would be that -- and the logic that in last year was a bit more difficult markets that it stayed flat after years of a very strong increase. The good thing is that we can really achieve those ERVs. And in some cases, we can also improve them by improving further the buildings. And the most logic thing would be when the markets as we expect starts to further recover that ERVs would first grow back in line with inflation. And then afterwards, in the mid- to long term, they would grow with inflation plus given the scarcity element and the importance of having lands and also now more and more power available.
Alexander Makar: The next in line is Wim from KBC Securities.
Wim Lewi: Yes. Congrats on your BLEND30 programs, especially in these uncertain times come out with such a long-term view. I also got one question and a small follow-up. My question is really on the internal financing. And I fully understand that you now give an outlook of EUR 500 million CapEx, mainly internally financed. Now although the market I believe is expecting because of your premium [indiscernible] to NPA that you might consider also rating equity. Now Joost answer to this, and I've heard many times is that, and I think also Mick mentioned that in the presentation, your cost of equity is too high. Recently, you had participated in the Catena issue. So my question really is how much do you see or do you need your cost of equity to decline or your share price to increase before you start thinking of, let's say, becoming a bit more aggressive on raising equity and maybe then growing also faster in certain regions that you've been eyeing or where prices have been too high.
Mickaël Hauwe: Well, that's something we will not comment on, Wim, because then we start the speculation. We think the most important thing is, Wim, that we can have the internally funded CapEx of EUR 500 million per year and that we can achieve 6% growth to at least EUR 2 per share. And yes, if we see attractive opportunities generating a return above our cost of capital at that moment because cost of capital moves every day, interest rates moves, share price move. And then we will, obviously, when we see an accretive opportunity, we will not hesitate to use our share like we have done in the past when needed. But the most important thing is we can get to the EUR 2 fully internally funded. And also do not forget that we manage -- do not forget that we manage the capital structure on a forward-looking basis. And so with the EUR 250 million to EUR 300 million of equity coming in each year, already reduces without investments 3% the loan-to-value and 0.5x the net debt to EBITDA. So that's a very strong machine we have going on.
Wim Lewi: Let me try it another way because I fully appreciate that you want to avoid speculation, but there is now exact speculation on something that might come where you think differently. So as I reiterate it, so you recently participated at Catena. Can you confirm that your cost of equity would be around the same of Catena data that...
Mickaël Hauwe: But I don't think the link to Catena is really of importance. We supported Catena as a reference shareholder and maintain our 10% strategic stake, and we support the company, which is doing very well. And with respect to WDP and equity raising, I will quote what the famous Belgian politician once said, "we will deal with it when the opportunity arrives and then we will look at what our return on that acquisition is versus our cost of capital at that moment."
Joost Uwents: And that's what Catena also did. They had a big opportunity, and then they looked at it and then they use -- let's say, based on the opportunity they had, they raised equity in order to make a creative deal. That's it.
Wim Lewi: Okay. Let's -- just for a short follow-up. You also mentioned contributions in kind. Can you give an indication of what size that could be? Is -- are you thinking EUR 20 million, EUR 30 million, EUR 50 million max or could that be also a bigger size?
Mickaël Hauwe: No. For the EUR 250 million to EUR 300 million per year, we have around EUR 100 million of retained earnings, EUR 125 million coming from the stock dividend and EUR 70 million, EUR 75 million of contributions in clients like we do each year, around EUR 50 million per year.
Alexander Makar: The next question is coming from Jamie from [indiscernible].
Unknown Analyst: Congratulations on the results and thanks for the update. I have just one question. What occupancy assumptions are embedded in the 2030 EPS target and how sensitive are these to occupancy falling given you're already operating at high levels today?
Mickaël Hauwe: Well, what we foresee in the BLEND2030 plan is that the occupancy stays around these levels and above 97%, which is normal and fully in sync with the long-term average.
Alexander Makar: The next one is coming from Pierre-Emmanuel from Jefferies.
Pierre-Emmanuel Clouard: Actually, the first question is a follow-up of the previous one. So on the 2% like-for-like rental growth that you're targeting for 2026, so first one, how much is coming from indexation and reversion on top. And if I'm looking at your 2030 target, what is the average like-for-like rental growth that you took at the main assumption?
Mickaël Hauwe: Yes. So on the like-for-like breakdown for '26. So you know we have a guidance of like-for-like rental growth this year of around 2%. And the composition is that the inflation component indexation is a bit less than 2%, and then we had 50 basis points through the rent reversion and then minus 50 -- around minus 50 basis points due to the occupancy rate, and that is solely linked to tenants moving in and also a bit of frictional vacancy because yes, we were used to fantastic pandemic years where when a tenant moved out, then the next -- there was the next tenant coming in, and the rent just continued. Now you have just the normal typically -- typical short void periods like you have in a normal market like in the past and actually going towards that 2030 target, the organic growth we foresaw is pretty much the same as in '26, apart from the occupancy part, of course, and that we can then have inflation plus -- capture inflation plus with 2% average indexation, and we can capture per year around 50 basis points of reversion above indexation. That's the assumption in the 2030 plan.
Pierre-Emmanuel Clouard: Okay. That's clear. And my second question is on the vacancy for 2025. What would have been the impact on vacancy if you would have kept the empty assets that you sold at the beginning -- at the end of the year -- of last year. And on top, can we expect more disposals of empty buildings in order to keep the vacancy below 3% in 2026.
Mickaël Hauwe: The first one, I'll take that one. Joost, the second part, the impact was around 30 basis points.
Joost Uwents: And concerning, let's say, we are always looking for the best value creation and doing good asset management indeed, normally, we don't sell assets. But sometimes, when it is -- let's say, when you can do an interesting deal, we are always open when, let's say, it creates value for WDP. Like, for example, at the end of last year, there, we could sell -- okay, it was a big unit, but it was a small unit in the bigger port of Liege, where we have, let's say, a very small position where -- we're only the third player on that side. So there was not -- we had not a lot of power to create value and then we could sell it to the neighbor. An example of a strategic buyer who said, "look, this is probably a once in a lifetime moment. So I'm ready. And I, of course, will have to pay the right price." But when he pays the right price, we said, okay, you can have it and you can buy it instead of renting it and then we could directly reinvest it from local Port, the Port of Liege towards the Port of Paris with a new strategic investment and a new strategic client Seafrigo. And yes, if we can do similar deals in the futures, we are always open for that, but always with the idea that it has to create value for WDP and not just selling a building because we want to sell something. We don't need to sell anything, but active creative asset management, we are always open. Like I said, sometimes you need to be creative and sometimes also a little bit contrarian.
Pierre-Emmanuel Clouard: Understand. And just a quick follow-up. In your 2026 guidance of vacancy below 2%, does it take into account potential disposal of empty buildings? And on top, maybe it would be interesting to guide us through the lease schedule in 2026, how many leases are at risk, how many tenants are -- may leave in 2026?
Joost Uwents: Yes, we are back at a retention rate at a normal retention rate of 90% and today, from the 10% tenants with a break in '26. There is already, let's say, almost 2/3 are already prolonged. So -- which is more than the -- the long-term average of 50%. And now there are no further, let's say, sellings of buildings foreseen in the plan in order to keep the occupancy high or higher.
Alexander Makar: The next in line is Francesca from ING.
Francesca Ferragina: I have just a couple. The first one is about the assumption that you took about the cost of debt over the 2030 plan? The second one is about the...
Joost Uwents: One by one.
Mickaël Hauwe: One by one, please. Yes, for the cost of debt assumption, we took into first for the base rate, the forward interest rate curve. So with Euribor rising from 2% today to a bit less than 3% by 2030 and the swap rate rising from 2.5% to 3%. And then with the margin added, we are below 100 basis points, which is what we currently pay for 5 to 7 years debt. That's the assumption.
Francesca Ferragina: That's fine. So I move to the second question. How much of the [ EUR 1 billion ] in investment spending that you have for 2030 is going to be devoted to the Energy division? And what type of hypothesis you took behind this type of investment?
Mickaël Hauwe: Yes. So the -- for the Energy division, it's a bit less than 10% of the EUR 500 million per year, so around, let's say, EUR 40 million per year and it's composed of the further rollout of our solar panel program and will go to 350-megawatt peak by '27. And there afterwards, we -- it will further grow in line with new development projects. Then secondly, we have the on-site batteries we are installing. And then we also have by commissions, by '29 a big stand-alone battery projects for which we just obtained the grid connection, which you can see on this slide in the green area. And that's the bulk of those investments. And then we will also add some first pilot projects in EV truck charging in mobility hubs as it is foreseen that our clients will and transport will change towards electrification. But there, it's too early -- already too early to make bigger assumptions on that because of what is happening now in the world around geopolitics, energy, self-sufficiency. So we believe that, that could come for a later plan. But that is the assumption we took, and you should take into consideration as there's profitability of solar panels then, let's say, 8% IRR, 10%, 15% yield on cost for the battery, it's around 15% IRR and 20% yield on cost. And those elements should bring us to a doubling of the revenue towards EUR 50 million in 2030. So I hope that's sufficient color.
Francesca Ferragina: Yes. And then maybe my last question in the development costs, an important part is the [indiscernible] development project, development pipeline. Can you share your feeling about development cost for [indiscernible]? Do you -- do you experience any [indiscernible] about the overall operating...?
Mickaël Hauwe: Well, we would say that over the last years after COVID, they have declined towards a level which is now broadly stable depending a bit on where you have -- how much work the construction companies have or per project or how big it is, but in general, they are okay and stable. And we can generate -- we can with those with the current construction cost, we can generate the targeted returns and let's say, the most distinguishing factor to achieve return -- the desired return on a development project is the availability of land, the cost thereof and the availability of power. These are the most important determinants of a development project today, right, Joost?
Joost Uwents: Yes. But the good thing is that, let's say, we can create value with a combination. It's not only that we need developments to create value or that we only can buy. No, it is the combination. And you can do an acquisition. And based on that acquisition, there can be an extra development. So it's really -- the value is in the combination. It's not about developing or doing acquisitions or entering a new country. No, it is that combination, that blend element, that is really we blend everything and then we can create value. That is the most important future looking.
Alexander Makar: The next in line is Paul from Barclays.
Paul May: Thanks for presentation. Just a couple of questions from me. Just first one on the depreciation of the solar and other energy. I think currently running about 45% of the revenue is depreciation, which given there's arguably 0 value on solar panels are used up and batteries are used up. Surely, that is a cost that should be included in your analysis and probably shouldn't be added back when looking at your net debt to EBITDA just rather you're only taking 100% of the positive and 0 of the negative in your debt metrics. So I just wonder your thoughts on that and how that is included and you talked about in your plans?
Mickaël Hauwe: Yes, it will be reflected in the end in our balance sheet as these investments come in the balance sheet at their fair value as they are for the property. And we believe the income -- the recurring cash income should be included in the EPRA -- in the EPRA earnings and also to take into consideration that the solar panels last a long time in the last 20, 30 years; batteries, 15, 20 years, depending on the intensity of the usage. But if you use them faster, then the income will have been higher as well. So yes, there is no land component like in the buildings. But yes, buildings are, in essence, also depreciating and we take the view that, that is more a revaluation component, and that will be reflected in the balance sheet rather than in our EPRA earnings.
Paul May: Okay. I mean it's quite different given the 0 value, but that's fair enough. Just coming back on the leverage question, leverage continues to increase, which is sort of counter to what we're hearing most investors want companies to do. They tend to want leverage to move in the right direction rather than the wrong direction there, which is the way you've been going. I appreciate your comments around the cost of equity, but have you or the Board considers it -- looking at your company more in the U.S. way, so looking at implied cap rates rather than necessarily a made-up cost of equity, which nobody really knows what the answer is. And if you compare you to Catena, for example, you're trading pretty much exactly the same implied cap rate and yet you are happy for them to issue equity but not happy to do ourselves other than a payment in kind, which is an issue of equity or a scrip dividend, which is effectively an issue of equity. So just wondering why you have a different view on sort of your equity to Catena or others? And why not looking at it from an implied cap rate basis?
Mickaël Hauwe: Well, we look at it from an implied earnings yield, so in first price earnings perspective, because that's the metric we need to look at to generate earnings per share growth and then it will simply depend on the opportunities. We will not -- we have not said we won't do it, we said if we don't need it for executing the growth plan, which we believe is a fantastic statement and reassuring also for you, the investors, that it is self-funded to achieve already 6% growth throughout 2030. And we have said that we have -- when we see attractive opportunities, generating an accretive return above our cost of capital, then we will not hesitate to use the share. That's how we are in it.
Joost Uwents: And the cost of equity between WDP and Catena, there is a big difference still today. We are at a 7% earnings yield and Catena was at or is at a 5.5%, let's say, cost of equity. So there is still a big difference. And so then indeed, they have a better cost of equity and it was in combination with an opportunity where they could create value. So there, let's say, we followed, and we also say indeed that, that was a good deal and the right moment to do that. But it's really still the difference in cost of equity is still very big, and we are still below the sector average, while price earnings are today at 17 around for our sector, and we are still around 14. So our cost of equity is still higher.
Mickaël Hauwe: Yes, and we are aware about the comparison you mentioned that we are a bit higher in leverage than our U.S. counterparts, but then on the other hand, we are much lower in a debt-to-EBITDA, which is the metric that matters in a European perspective. And also, we believe that having the A3 rating also gives us somebody to -- as in a story an act of confidence in our balance sheet strength towards the generalist investors and also do note that our balance sheet is still based on values per square meter less than EUR 1,000 on average.
Paul May: I hear that. I mean, I think, surely, that looking at it from an earnings yield basis, you should adjust for your current cost of debt, which is lower than it than marginal whereas Catena is more in line with marginal costs given the variable exposure. So that's a large reason why they have a lower earnings yield than you do is that their debt is already repriced, whereas your debt will reprice at some point in the future. Hence the reason looking at on an ungeared or implied cap rate basis where you're basically trading at the same level. Let's say, a U.S. company would be looking at your equity and saying, issue equity every single day because it's cheaper to use your equity to buy assets. The market is overvaluing you on an implied cap rate basis. I think your equity is cheap, by the way. So as a separate point, hence the reason I wanted you to...
Mickaël Hauwe: We agree to disagree. That's no problem, and we appreciate having exchanging the opinions.
Alexander Makar: The next in line is Fred from Kepler.
Frederic Renard: Just a question on my end. Maybe the first one, can you describe a bit the evolution of the ERV in your respective market, please? And how do you see it evolving in 2026 and just to link on that, you described an uptick in leasing momentum, also potentially for larger unit. Do you see more incentive to be given? That's the first question.
Mickaël Hauwe: I think on the ERV, you answered it. So short term, it was flat. And now as the market starts to pick up again, we believe it will move back in line with indexation and in the mid- to long term inflation plus because of the scarcity element and then on the leasing momentum.
Joost Uwents: Indeed on incentives, we can say that it is not a matter of pricing, so not a matter of incentives, it's about, am I ready to jump, do I meet that building? Do I can create value? Our clients also have to create value in by renting a building? Can they use it in a positive way and let's say, when they say, if I can use it, then let's say if they pay the price, there are not so many possibilities most of the time in the building they want on the location. So it's not a price discussion on the contrary. And I would say it would be only a matter of incentives I give for every empty building, 3 months' rent free and if everything would be rented, then I'm a happy man, but it's not the case. It is, am I ready to jump and then people pay the price. And indeed, most of the time, those prices are higher than the tenant who was in before. So everybody accepts the new price levels.
Frederic Renard: All right. And then the second question on Catena. What has the company brought to WDP excluding dividend since you have this 10% stake? Because it seems that -- I mean, to refer to the question of Paul, but the company trades at a higher multiple than yourself, which means isn't there a better use of your capital allocation today, just wondering?
Mickaël Hauwe: We believe it's a strategic stake and are very happy with that. The company is performing very well as said, and we are happy with that long-term strategic stake because we could never cover that -- those markets by ourselves, and now we can also offer solutions in other countries through Catena, we can help and reinforce each other. And we recently also did a deal with ...
Joost Uwents: Indeed. And I think now, I'd say we did that not as a short-term opportunity, but as a long-term partner in order to be able and to become, let's say, a company that can offer solutions, let's say, from Stockholm and soon from Helsinki up to Madrid and Rome. So then we can offer to our clients total solutions on a whole Western Europe. This is important, and it is over the short-term cycles. And indeed, for example, the deal in Le Havre with Seafrigo, well, that was also, let's say, Seafrigo is a client of Catena before. And so Catena could introduce us and there, we could use the combination of clients, for example. And for us, it's really about long-term helping clients and giving -- being able to give a total solution to our clients and core Western Europe.
Frederic Renard: All right. And therefore, does it mean that if you find, for instance, like company in the private market, which is active in Spain and in Italy, would you be happy to take a minority stake in order to invest indirectly into the market?
Mickaël Hauwe: No. That will not be the case.
Joost Uwents: No, there we really set...
Mickaël Hauwe: We said we do it by ourselves.
Alexander Makar: The next question is coming from Steven from ABN.
Steven Boumans: On a specific question on Le Havre where you added investments. Any comments on the region and more specifically on where we are with permitting for your land there. And we have this project contributing in '27 or in 2030 and adjacent to it, do you see risk on permitting as a result of the coming regional elections.
Joost Uwents: Dunkerque, yes, there, let's say, we are still waiting for permits. We have had a problem with the permitting time due to a bird like it sometimes happens when their strikes down a bird during the right period, you can do nothing. They have to investigate. So we got a longer option. And normally, but yes, in France, it can take a long time. We will -- we should get the permit, let's say, by the end of the year. So it will take still a long time. But in the meantime, of course, it is only an option, and we are not owner of the land, so it doesn't cost us anything. But that's just -- there is no specific reason that just the normal procedure in France, it takes 2 year to get your permitting and here due to the bird, then it will be 3 year, but that can also happen, let's say, in the Netherlands or other regions, yes. Permitting is taking time everywhere.
Steven Boumans: Any potential risk of the local elections, could that be risk in your view?
Joost Uwents: I think no, not really. I'd say there are always everywhere elections in Europe, there has been elections that are also elections, if I'm right, in the Netherlands and in France. And -- but let's say, logistics is not politically sensitive, it is a strategic sector, the strategic infrastructure. So let's say, we don't depend on, let's say, the local or more political waves.
Mickaël Hauwe: And we also invest in industrial zoned land.
Alexander Makar: And then we have one more question from Alex [indiscernible]. You're currently unmuted. Just for the other questions that are in the activity feat in the chat. As we try to respect the time, it's getting close to 11:00, we'll address them, but we'll reach out to you directly. The floor is yours.
Unknown Analyst: One question on the scrip dividend. What's your assumption in your EPS growth target there?
Mickaël Hauwe: Yes, that we do it in line with the historical of minimum 50% take-up rate.
Alexander Makar: All right. Thank you very much. So this currently concludes the Q&A asset. We'll address the other questions in the chat directly. Any concluding remarks, Joost?
Joost Uwents: Yes, of course. Thank you, Alexander. And to conclude, I can say that indeed, and thanks to our platforms, our strong fundamentals and our DNA of being effective, creative, entrepreneurial. And now and then a little bit contrarian, that DNA that Tony and I created together the last 25 years, well, that DNA makes that we can deliver today with a vision for tomorrow. So we are ready and looking ahead to 2030. Thank you all, and see you soon.