Earnings call transcript: Cofinimmo Q2 2025 shows steady growth in healthcare real estate

Cofinimmo SA reported its second-quarter 2025 earnings, highlighting a 2.5% increase in EPRA earnings to €122 million and a substantial rise in net results group share to €112 million, up €70 million from the first half of 2024. The company’s stock experienced a slight decline of 0.23% in pre-market trading, reflecting a measured investor response to the earnings announcement. According to InvestingPro data, the company has demonstrated strong momentum with a remarkable 53% price return over the past six months, while maintaining its impressive 31-year streak of consistent dividend payments.

Key Takeaways

• EPRA earnings increased by 2.5% to €122 million.
• Net results group share rose significantly by €70 million year-over-year.
• Healthcare real estate now constitutes 77% of Cofinimmo’s €6 billion portfolio.
• The company maintains a high occupancy rate at 98.6%.

Company Performance

Cofinimmo’s performance in the second quarter of 2025 demonstrates its strategic focus on healthcare real estate, which now represents a significant portion of its portfolio. The company has successfully increased its net results group share, reflecting strong operational efficiency and effective asset management. The healthcare sector’s growth, particularly in Spain and the Netherlands, has been a key driver of this performance.

Financial Highlights

• Revenue: Not specified in the earnings call summary.
• Earnings per share: Not specified in the earnings call summary.
• Gross rental income: Increased nearly 3% like-for-like.
• Debt to asset ratio: 44.4%, with a target of 43% by year-end.

Outlook & Guidance

Cofinimmo confirmed its EPRA EPS guidance of at least €6.2 per share for the year. The company is also targeting a debt-to-asset ratio of around 43% by the end of 2025. It anticipates a gradual increase in the cost of debt to 2.2% by 2028, reflecting broader market trends and interest rate expectations.

Executive Commentary

Jean Pierre Hanna, CEO of Cofinimmo, emphasized the company’s robust position, stating, "We are fully occupied with the preparation of the combination. The business is strong." He also noted the favorable market conditions in Spain, which have contributed positively to the company’s performance.

Risks and Challenges

• Potential fluctuations in interest rates could affect the cost of debt.
• The ongoing combination with Edifica may present integration challenges.
• Market polarization in the office sector could impact asset divestments.
• Economic uncertainties in key European markets might influence rental income.

Cofinimmo’s strategic focus on healthcare real estate and its strong financial performance underscore its resilience in a dynamic market environment. The company’s proactive approach to managing its portfolio and financial metrics positions it well for future growth, despite the potential challenges ahead.

Full transcript - Cofinimmo SA (COFB) Q2 2025:

Ben, Call Coordinator: Hello, and welcome to COFINIMO half year twenty twenty five results. My name is Ben, and I will be your coordinator for today’s event. Please note this call is being recorded. And for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call.

This can be done by pressing star one on your telephone keypad to register your question. I will now hand you over to your host, Mr. Jean Pierre Hanna, CEO of COFINIMO to begin today’s conference. Thank you.

Jean Pierre Hanna, CEO, COFINIMO: Thank you, Ben, and good morning, everyone. Thank you for joining us today in this call for the presentation of COFINIMO’s result for the first six months of this year. As usual, I’m joined with by my colleagues, Jean Cotaracost, CFO Yilies, BCC, COO Sebastian Aberdeen, COO. And as usual, we will keep the presentation short to give you enough time for the Q and A at the end. Let me begin with a brief update on the potential combination with edifica through a public exchange offer that we addressed in several of our press releases published on the May 1, the May 9, the May 13, the June 3, and more recently on the July 18.

As announced on the June 3, Edifica and Cofimo reached an agreement to unite and create Europe’s leading healthcare REIT. We understand that Edifica shareholders gave broad support to the contemplated combination on the July 11. The transaction is subject to the approval by the Belgian, Dutch and German competition authorities. We understand that over the past weeks, the German and Dutch competition authorities have already given their approval for the transaction. We were informed that during the ongoing pre notification phase, the Paget competition authority indicated that further questions would need to be answered.

Edifica and Perfinumo will therefore provide additional information in the coming weeks. As a result, it cannot be excluded that the review process may take longer than initially anticipated as referred to in the latest press release of edifica. Beyond this brief update, you will understand that the potential combination is not the topic of today’s conference call. Hence, let’s get back to the usual topics now. The highlight of the first semester are listed on slide three and can be summarized like this.

For the first six months of 2025, and although we witnessed a volatile global environment, COFINIMO’s results are higher than the outlook with IPRA earnings up to 2.5% at €122,000,000 The net result group share even stands at €112,000,000 up €70,000,000 compared to H1 twenty twenty four. Those good results arise not only from an excellent operational performance like a gross rental income up nearly 3% like for like, high occupancy rate, and long residual lease length of thirteen years on average. They also derive from the solid financial foundation on which COFINIMO was built. Here, I can point out our cost of debt, which is stable at 1.4%, one of the lowest level for REITs in Europe. The debt to asset ratio on the June 30 stood at 44.4%, but as you all know, this includes the seasonal effect of the payment of the dividend in May.

As a reminder, the outlook for this ratio is about 43% at year end. As you know, Healthcare Real Estate makes up 77% of our $6,000,000,000 portfolio. The office segment has largely been re centered on the best area of the Brussels Central District. I will go into details on the status of our investment and divestment target later in the presentation. On sustainability level, COFINIMO has improved its ranking in the twenty twenty five Europe’s climate leaders list by the Financial Times, where we are present for the third year in a row now.

Based on all of this and barring major unforeseen event, we can now confirm an EPRA EPS target of at least 6.2 per share, leaving aside the nonrecurring effect related to the potential combination with Aimifiga. Our company profile and strategy are well known by all of you, so I suggest going directly on slide number eight. The chart on this slide illustrates the asset rotation strategy and steep growth in health care from 45% in 2017 to 77% today. At the same time, the office segment was reduced from 38% to 15% and the distribution network segment was halved. On slide number nine, you can see that we continue to diversify our footprint with a significant presence in most of the non European countries where we operate.

To date, 53% of COFINIMO’s total portfolio is located outside Badger. I’m now on slide number 10. In the first half of twenty twenty five, we had net divestment of twenty million euros This net divestment takes into account €36,000,000 of investment, essentially linked to the execution of development project in Healthcare. As you can see on the right bar chart, we have continued our asset rotation mainly in health care. On the divestment side, our target is still €100,000,000 for this year.

We have already closed for €56,000,000 in the first half of the year. If we take the files completed in July, like the closing yesterday of the divestment of a nursing and care home in Belgium, and the files already signed and expected to be closed by the end of this financial year, the divestment reached approximately €70,000,000 or 70% of our target. Divestment were all made in line with the latest fair value. Those of distribution network assets were even done above fair value. Slide 11 summarizes for you the ongoing portfolio rotation since 02/2005.

In twenty years, we completed €4,500,000,000 net investment in Healthcare with a clear acceleration since 2018 and a slowdown since 2022. Over the same period, we have made net divestment almost €1,000,000,000 in offices. Slide 12 highlights our accelerated portfolio growth in 2018 at an average pace of 8% per year, even taking into account the lower side of the portfolio since 2022. Over the same period, thanks to our proactive management, we kept our debt to asset ratio at an adequate level as shown on the right hand chart. As a reminder, the 44.4% at June 30 includes the seasonal effect of the dividend payment.

The outlook for the end of the current year is around 43%. I’m on slide number 13 now, where I’d like to comment on COFINIMO’s shares performance on the stock market this year. Since our Q4 call in February, we gained approximately €800,000,000 in market cap, which is now at €2,900,000,000 COFINIMO’s shares have indeed shown a strong H1 performance with a 50% total shareholder returns, of which 20% until the April 29. This performance was driven by three key events: a well received adjustment of the dividend outlook announced in February for the payment that will occur in 2026 a strong performance post Liberation Day in April, Healthcare Real Estate being immune from direct effect of tariffs And an acceleration from the April 30 onwards, the share price being stabilized at a level reflecting the potential combination with EGLIFICA through a public exchange offer. On slide 15 to 19, you see that Coffinamo’s dedication to sustainability is strong, still many years.

Our effort had positioned us as a very credible player in the industry. Let me give you a few example. Perfinumo is part of the Financial Times list of Europe Climate Leaders 2025 for the third year in a row and with an improved score. We have extended the ISO 14,001 certification scope to Spain, and we have received new pream certifications in Finland and for our offices. On slide eighteen and nineteen, we listed all our sustainability benchmark and awards for your convenience.

And now let’s take some minutes to talk about the property portfolio. As shown on slide 21, our property portfolio maintains a very high and even improved occupancy rates at 98.6%. On the same slide, you see the top 10 list of our tenants. Moving to slide 22, the overall weighted average residual lease term remains quite long at thirteen years and even at fifteen years for health care. In the first half of twenty twenty five, gross yields have basically stayed stable at 5.9% or 5.6 net, as you can see on slide 23.

Overall, our average net yields are closer to 6% than to 5%. Sebastian Burden, CEO, will now provide insight into our Healthcare segment.

Sebastian Aberdeen, COO, COFINIMO: Thank you, Jean Pierre, and good morning to you all. Since 2018, and I’m on slide 25, we consolidated a leadership position within the European health care sector. We achieved this through strategic geographic expansion and diversification across various healthcare segments. I’m sure you remember that next to the nursing and care homes, which still represent the majority of our assets, We own acute and rehabilitation care clinics as well as primary care centers and rehab clinics, only to mention a few. On Slide 26, you will see that the fair value of our health care portfolio was at the June EUR 4,600,000,000.0 and represents 77 percent of COFINIMO’s portfolio.

We now own three zero six sites, housing more than 30,000 beds and representing almost 1,900,000 square meters. This represents on average 6,000 square meter per asset. The portfolio grew slightly since December 24 through the delivery of projects we had in our running pipeline. And at the same time, we realized some selective divestments. I’ll come back on that in a couple of slides.

On Slide 27, we follow-up on an initiative we presented for the first time in February. This table provides an updated overview of the underlying occupancy rates in our portfolio. As you know, we gather data on the performance of our health care tenants and benchmark these figures with external market data. You’ll recall that in 2023, we saw a continued improvement in occupancy rates in most countries. The average occupancy rate in COFINUMOS portfolio reached 92%.

We are very happy to observe based on the updated sets of figures that this positive trend has continued and even improved almost everywhere in 2024. We also note that our occupancy ratio are in all countries better than the market data. On Slide 27, at least in the top part, you see a summary of our development projects completed in H1. These were localized in Spain and in The Netherlands. On the lower side of the slide, you will see the list of divestments we realized in the first half of the year.

Slide 29 provides an overview of the Palos post balance sheet date events. With these were three acquisitions in Spain and in Finland, and we also concluded the divestment yesterday the southern part of Belgium. Let me now hand over to my colleague, Yelise Bississi, for an overview of Upstone and the offices.

Yilies BCC, COO, COFINIMO: Thank you, Sebastian, and good morning to all of you. You all know our, Potsdam portfolio, which is based on a long term contract with AB Inves in Belgium and The Netherlands for approximately 800 pubs and restaurants. The segment represents a fair value of, approximately €500,000,000. Our asset rotation strategy in the distribution networks has led to selective divestments during h one for a total amount of €5,000,000 and all at a sale price above their fair value. Now let’s move on to the office segment as of Slide 33.

The office segment’s fair value consisting of 25 properties for around 250,000 square meters amounts to €927,000,000 Slide 34 illustrates the successful evolution of the portfolio with almost three quarters of our assets located in the CBD Of Brussels. An outstanding project on slide 35 I want to highlight is the complete renovation of an office building in Mechelen of around 15,000 square meters leased to the Flemish community and which was officially opened during a ceremony in the presence of the Flemish minister president on the July 1. After the works, its energy performance is well above current legal requirements, thanks to extensive energy upgrades, a focus on the circularity of materials, and a complete interior refurbishment. A lease renewal has been signed for eighteen years, and the rents will be indexed based on the Belgian consumer price index. And I will now hand over to Jean, who will highlight the financial specifics.

Jean Cotaracost, CFO, COFINIMO: Thank you, Yelise. Good morning to all. We can go to Slide 37. Here, we observed that our portfolio has experienced a like for like rental increase of almost 3%, primarily fueled by new leases and indexation. Besides this, the divestments closed in 2024 and 2025 explain the minus 0.8% year on year change in gross and diluted income.

We can move to Slide 38, where we see that Perfinimos momentum in terms of investment, divestment and financing, coupled with an efficient management of the existing portfolio, has generated a 2.4% growth of the bottom line compared to H1 twenty twenty four at January This is higher than the outlook. The EPRA earnings per share or the EPS reached €3.19 which again is higher than the outlook. The effect of the recent divestments and the capital increase of €24 on this indicator amounts to minus 0.26 per share in total for the first half of twenty twenty five. On slide 39, we present the IFRS net result, which stands at €112,000,000 at the June or €2.95 per share. The increase of €70,000,000 compared to H1 twenty twenty four is due to the increase of the net result from collectivities of plus EUR 3,000,000 that I’ve just commented, combined with the net effects of the changes in the fair value of hedging instrument and investment properties, both noncash items, between H1 twenty twenty four and H1 twenty twenty five.

The net reserve group share per share at June 2025 takes into account the issuance of shares in 2024 as illustrated by the increased denominator, which increased from EUR 37,000,000 to EUR 38,000,000. Drilling down into the portfolio result, we see a figure of plus EUR 2,000,000 as opposed to minus EUR 94,000,000 at the June. This encompasses the following key items. First point, as for the result of the portfolio, the gains or losses on disposal of investment properties and other non financial assets amounts to EUR 1,000,000, so a gain of EUR 1,000,000 compared to a gain of EUR 7,000,000 at the June. This result is calculated on the basis of the fair value at the 2024 of the assets divested during the period and the net price obtained, which means after deduction of any broker’s commission, material fees and other ancillary costs.

Second point, the item changes in the fair value of investment properties is positive at June, EUR 3,000,000 compared to minus EUR 91,000,000 at June. Without the initial effect from the changes in the scope, the changes in the fair value of investment properties during the first quarter were positive, putting a net to nine consecutive quarters of decrease and thus remained stable in the second quarter. This change of plus 0.1% for the 2025 is mainly due to several factors. A change of 0.1% in Healthcare Real Estate, which arises from a negative change in France, mainly due to the increase of registration fees following the finance act implemented on the April 1 by certain local authorities as well as a downwards revision to inflation forecast in France. This is combined with a minus 0.2% change in the office segment, representing only 15% of the consolidated portfolio.

And all this was partially offset by a change of plus 0.7% in the property of distribution networks. Turning to Slide 40, we observe that our total assets are valued at approximately EUR6.4 billion, with investment properties and assets held for sale at fair value constituting nearly 95% of this figure. These assets are financed by roughly EUR3.5 billion in equity and EUR3 billion in liabilities. Slide 41 offers an analysis of the evolution of the debt to asset ratio from 42.6 at the 2024 to 44.4% by the June year. This change can be attributed to several factors.

First and foremost, the seasonal effect of the dividend 24 paid to our shareholders last May has led to an increase of 3.7% of the seasonal effect that Jean Pierre mentioned earlier. That is already partially offset by the cash flow produced during the first half, generating a decrease of the net asset ratio of 1.9%, while the net divestment of H1 reduced the ratio marginally by another 0.2%. All the other elements combined, including grounding, have another 0.2% positive effect. With current projections and barring unforeseen major events, we target the debt to asset ratio of around 43% by the end of twenty twenty five. On Slide 42, you can see that the upper NAV is somewhere between €90 and 99 between €90 and €99 per share.

I will comment on the evolution of the IFRS NAV between end of twenty twenty four, where it stood at EUR92.84 per share versus EUR81.55 per share at June. This means that it decreased by slightly more than EUR3 due to two drivers, the payment of the dividend twenty four two months ago, which amounted to EUR 6.2 per share, partially offset by the net results of H1 twenty twenty five being almost EUR3 per share as seen on the previous slide. Let’s now move to the financial resources at our disposal. In the first half of twenty twenty five, I’m on the slide 44, there was no equity raise as there was no option at the moment. Our S and P credit rating of BBB with a stable outlook, short term A2, was in March 24 with the report being published in April as shown on the Slide 45.

It’s also worth mentioning that SNP improved its oral drug early June following the press release related to the potential combination with INIFICA. This means that Cofinenrost rating could improve by one notch after completion of the transaction. All of the 25 maturities have already been refinanced, as mentioned on Slide 46. And that we will show that on a picture on the later slide. We have also concluded two refinancing preparations in Q1 and a very recent fleet in Q3.

Slide 47 reminds you that Cafe Nouveau holds EUR 2,600,000,000.0 in sustainable financing, comprising various instruments, including the sustainable commercial data program. We can move to the next slide. On this slide, 48, we show further breakdown of the long term committed financing instruments split between bond and similar instruments, which represents onethree of the total, and then bank facilities, representing twothree of the total. This includes a headroom of almost EUR900 million of available credit lines after deduction of the backup of the commercial paper program. The second map below shows the breakdown of the drawn financial debt made out of almost 43% of bond and similar instruments, less than 30% of bank facilities and less than 30% of short term drawings of the commercial builder program fully backed by long term committed credit lines.

This highlights our continued success to diversified funding sources, including relationships with 25 leading banks. Going to Slide 49. Due to the passage of time and the rate of the two benchmark bonds of €500,000,000 which in our maturity table, the average debt maturity after it remains stable at four years in 2023 and 2024 stands now at three years rounded. The average cost of debt is still in line with the level experienced in 2023 at 1.4%. You will recall that in the 2025 outlook, we anticipate a very slight uptick in our cost of debt to 1.5% for the full year.

On the medium term, we anticipate a gradual increase year by year by around 2.2 sorry, to reach in the medium term, we anticipate a gradual increase year by year to reach around 2.2% in 2028 when the first benchmark event will mature. I’m on Slide 50. As mentioned earlier, we can present a green sheet for the ’25 maturities, and we are already working on the maturities for ’26. Slide 51 shows that our interest rate risk is almost fully hedged for 2025, aligning with the group’s long term interest rate hedging strategy. Between 2026 and 2029, the hedging ratio varies from 95% to 71% with a weighted average maturity of four years.

And I will now hand over to Jean Pierre, who will give you an update on the 25%.

Jean Pierre Hanna, CEO, COFINIMO: Thank you, Jean. On Slide 53, you will find a breakdown on the investment budget for 2025. Turning first to the investment aspect on the left side of the slide, we are, as you know, considering gross investment for a total of €170,000,000 for this year. Secondly, on the divestment aspect, on the right side of the slide, as you have seen in our press release of July, we are on track with our target of €100,000,000 in divestment. Like I said in the beginning of the presentation, 56,000,000 have already been done in the first semester of this year.

If we add the files completed in July, like the closing of the divestment of a nursing home in Belgium that happened yesterday, and the files already signed and expected to be closed by the end of the financial year, the divestment reached approximately 70,000,000 or 70% of our target. With this projection, the net investment would reach around €70,000,000 at the 2025 and would have a nearly neutral impact on net debt to asset ratio, which is expected at around 43% by year end. I will end this presentation with an update on the outlook 2025. COFINIMO confirms the guidance published in the press release of February 21 and April 25, which expected barring major unforeseen events to achieve a net result from core activities group share per share equivalent to Ipra EPS of at least €6.2 per share for the 2025 financial year, leaving aside the nonrecurring effect related to the potential combination with Edifica. This is taken into account the product atemporary’s dilutive effect of the capital increases carried out in 2024 for approximately €09 per share and the divestment carried out in 2024 and budgeted in 2025 for approximately €0.36 per share.

Based on the same data and assumptions, the debt to asset ratio at the end of this year would remain almost stable compared to that as at the 2024 at approximately 43%. This allow us to confirm the gross dividend outlook for 2025 financial year payable in 2026 at 5.2 per share. We appreciate your attention and are now ready to address any questions you may have.

Ben, Call Coordinator: The first one comes from the line of Valerie Jacob calling from Bernstein. Please go ahead.

Valerie Jacob, Analyst, Bernstein: Hi. Good morning, and thank you for the presentation. So I’ve got a few questions.

Unidentified: If I may, do you want me

Valerie Jacob, Analyst, Bernstein: to ask them all or one by one?

Jean Pierre Hanna, CEO, COFINIMO: One by one, please.

Valerie Jacob, Analyst, Bernstein: Okay. So the first one is just on your outlook. I mean, you said that you’re ahead of budget, and I think you were already ahead of budget at Q1, if I’m not mistaken. And so I was just wondering what you know, if you could be a bit specific and tell us, you know, what part of your business is, you know, doing better than you were anticipating when you when you did the budget. Is is there something specific, or is it just that you are cautious and everything is just a bit better?

Jean Pierre Hanna, CEO, COFINIMO: Yeah. It’s, you know, it’s, it’s spread it all over the business. So I would not say there is one element striking much better. So it’s a bit everywhere, which shows the resilience and I think the quality of the business. So that’s we know we said at least 6.2, but there is no specific element to highlight.

Valerie Jacob, Analyst, Bernstein: Okay. Thank you. My second question is on the renegotiation. So it’s still a bit negative this year, but I know it was negative last year as well. And I was wondering, the number we are seeing this year, is it a legacy of what you renegotiated last year?

Or are you still, you know, seeing some negative renegotiation? And if this is the case, you know, do you anticipate this will continue in h two as well?

Jean Pierre Hanna, CEO, COFINIMO: Well, you know, there is one part of a bit of business of usual where, you know, you still have a bit here and there. But frankly speaking, considering the size of the portfolio is really marginal. Some parts a bit of legacy. So again, very minor point, I would say.

Valerie Jacob, Analyst, Bernstein: Okay. Thank you. The next one is on indexation. I think indexation is going down everywhere. And I was wondering if you could share your forecast for 2026.

What are you anticipating for your portfolio in term of indexation?

Jean Pierre Hanna, CEO, COFINIMO: We can’t because we are waiting some official data for, you know, like, from the AU for 2026. So, you know, we don’t have yet those data. So that would be something more for later on this year.

Valerie Jacob, Analyst, Bernstein: Okay. But you haven’t made any, I don’t know, estimate? Or

Jean Pierre Hanna, CEO, COFINIMO: No. No. No. We don’t. And, you know, like you, we follow the flow of information and all studies and and so on.

But we have not yet incorporated any definitive figures for or estimate of next year.

Valerie Jacob, Analyst, Bernstein: Okay. Thank you. And my last one is on offices. I think Edifica made some statement on being a bit more flexible on the disposal of offices. And I was wondering if you’ve had more interest or people reaching out to you to to buy some offices since that statement?

Jean Pierre Hanna, CEO, COFINIMO: Well, you know, several statements have been made. So I think we have to be careful just referring to to one statement. Secondly, you know, there has not been any change since, you know, some of these statement has been made. But we continue to be very active, and there would be further news in the second semester. So what is quite relevant is to see that the occupancy ratio is going up.

So the the business is quite from a qualitative point of view, is demonstrating its robustness.

Valerie Jacob, Analyst, Bernstein: Thank you.

Ben, Call Coordinator: The next question comes from the line of Frederic Rona calling from Kepler Cheuvreux. Please go ahead.

Frederic Rona, Analyst, Kepler Cheuvreux: Yes, hi. Good morning, guys. Just to come back on the question of Vale on the outlook and the guidance. What was refraining you from increasing your full year guidance on the back of the fact that you are still above budget?

Jean Pierre Hanna, CEO, COFINIMO: Look, we are fully occupied with the preparation of the combination. The business is strong, which is a good news. And rather than to have it precisely wrong by putting a number that, you know, would not be exactly this, we said at least 06/20. And I think after the next quarter, we might have a a better view. But at this stage, we’re not hold back by, you know, specific things, but it’s more a global attitude.

And I think, Frederic, you know us quite well in this regard.

Frederic Rona, Analyst, Kepler Cheuvreux: Yes. Indeed. Thank you. And maybe a second question, which could be a bit weird, but I appreciate your report probably last month, I think, on the office portfolio of Confinimo trying to indicate where could be actually the real market value of this portfolio, and I was around minus 11%. I don’t know if you can well, to what extent you would agree or disagree on that on that statement?

Jean Pierre Hanna, CEO, COFINIMO: Well would

Frederic Rona, Analyst, Kepler Cheuvreux: be marketing the portfolio today.

Jean Pierre Hanna, CEO, COFINIMO: Look. The revalue of the portfolio is a combination of the evaluation which are made on a quarterly basis and, you know, every time being adjusted. And Jean has highlighted that after nine quarter of of adjustment, we have reached now a a much more stabilization level. You know, I don’t know where this 11% is coming from. You know, it seems that some people are very smart and can say something.

If you put any negative number, you seem credible because in the current environment, you know, people tends to be more on negative side than the positive. But look at what, we have divested during those last three years. So I’m a bit tired of having always to repeat this because we have shown during the last three years that we were capable of selling at fair value. We are not holding back any opportunities. But, of course, to set up fair value, you need to prepare it.

Sometimes you need the permit to be attached to it. So, you know, maybe for, you know, negotiation purposes, you can agitate a negative value. But look at the reality, and I think it’s can be done at, you know, fair value. But if you want to rush and take, you know, everything, then indeed you might have some poor offer.

Frederic Rona, Analyst, Kepler Cheuvreux: Mhmm. Understood. But I I mean, it was not to tease you or not to lower what you have done over the last year. I’m just thinking that for some plain vanilla type of product, including, for instance, the Belyard 40, which is probably one of your landmark assets today in your portfolio. I guess if there would be an there would be having an opportunity, you would have seized it.

And I would assume that it has not materialized, which could also mean that the price in your book is actually a bit too Yes.

Jean Pierre Hanna, CEO, COFINIMO: For so, the no doubt, everything is in play since several years. So we are not turning down any offer. And whether it’s the BetaR 40 and we have other very good asset of that quality, it’s clearly the case we are active. Everything is in play. And as you know, you know, the track record has demonstrated we can do it, and we will continue.

Frederic Rona, Analyst, Kepler Cheuvreux: Understood. Thank you.

Ben, Call Coordinator: The next question comes from the line of Stephen Boumans calling from ABN AMRO, ODDO BHF. Please go ahead.

Stephen Boumans, Analyst, ABN AMRO, ODDO BHF: Hi, good morning. Thank you for taking my questions. I got several. So the first one, what are the expected nonrecurring effects arising from the potential combination with Edifka in 2025 and 2026? Yes.

Jean Pierre Hanna, CEO, COFINIMO: As you know, the transaction is going on and is credit on several months. So this just started. And, of course, we will disclose disclose in due time depending on the various steps the process estimate, but it just started. So it’s a bit too early to make estimate at this stage.

Stephen Boumans, Analyst, ABN AMRO, ODDO BHF: Okay. Clear. And then also referring to the previous questions, maybe some further clarification on the investment market for options in Brussels. Can you provide a bit

Jean Pierre Hanna, CEO, COFINIMO: more color versus six months ago? Are there more buyers in the market, for example? Any uplifting discussions you have for specific assets? Or is that similar, let’s say, six months ago? Well, basically, what we have done in the last three years in a market that was not better than this year is basically having targeted discussions with potential buyers for, you know, asset by asset, and we continue to do so.

I’ve not noticed a big change over the first six months of this year, so it’s more business as usual as far as we are concerned.

Stephen Boumans, Analyst, ABN AMRO, ODDO BHF: Okay. That is very clear. And the last one, I see that for the line item in the P and L of joint ventures and associates. That’s a positive result today. Is it correct that the majority of that line item is the ALDAIA joint venture?

And can we expect structural profitability in the foreseeable future from this line item?

Jean Pierre Hanna, CEO, COFINIMO: Jean?

Jean Cotaracost, CFO, COFINIMO: So ALDEA is indeed included there, but what you have specific to the last quarter is the fact that at the April, Fnemore has started 25% residual stake in a company that was holding health care campus that was under construction in Germany. And that we laid again on the disposal of that residual stake.

Stephen Boumans, Analyst, ABN AMRO, ODDO BHF: Okay. Clear. So it was a bit of a one off this quarter. And going forward, can you guide a bit to what we structurally positive, the joint venture and associates line item, let’s say, for this year and next year besides one of this product?

Jean Cotaracost, CFO, COFINIMO: If you if you look at forecast information, that’s the main thing that you will find there with the the mark to market of the underlying portfolio of the associates And as for the rest, we cannot make the work in advance. So you should go on for a small variation, positive or negative, depending on the market valuation of the assets.

Stephen Boumans, Analyst, ABN AMRO, ODDO BHF: Thank you so much. That’s very clear.

Jean Pierre Hanna, CEO, COFINIMO: Thank you. The

Ben, Call Coordinator: next question comes from the line of Veronik Mertenz calling from Vandenscot, Kepler. Please go ahead.

Unidentified: Good morning all. Thank you for taking my questions in the presentation. For me, some questions on health care side. Maybe first on Spain. I noticed there were some delays in pipeline, I think, specifically to one developer.

Could you give some additional color and comments? I think, in general, we’ve seen some delays in Spain. So how is that market evolving for you?

Jean Pierre Hanna, CEO, COFINIMO: The the market, generally speaking, in in Spain, as you may know, is is quite good. Spain is a quite a big market. On the developers sign side in general, like in many European countries, while construction, you know, sites are more on the slow pace than on on a fast for reason that are existing in many other markets. So as far as the delay we have mentioned here, I think it’s still basically the result of what happened during the COVID years and still some delays that are there and global slow move in the construction markets, not more.

Unidentified: Okay. Thank you. And then maybe looking at Italy, I know it’s it’s a country where you have the the lowest vault of only five years. There is currently one of your peers is actually in the market with an Italian portfolio with significantly higher walls. Is this I appreciate that, obviously, in the last few years, you were not really a net investor, but this is a portfolio that you’re currently looking at or could be interested in.

Jean Pierre Hanna, CEO, COFINIMO: We are looking at all opportunities on the market, but it is all the way that I can say. But we are not in a holding position. So whether it’s in Italy or in other geographies, if there is something interesting, then we look at it.

Unidentified: Okay. Thank you.

Ben, Call Coordinator: The next question comes from the line of Vivien Mackay calling from Degroof, Petercam. Please go ahead.

Veronik Mertenz, Analyst, Vandenscot, Kepler: Yes. Good morning. Thanks for the presentation. Just a couple of follow-up question maybe on the offices. But on your disposal plan, I think that you have still, I don’t know, what’s Slide 53 or something, still some some disposal to be secured to 30% or 30,000,000 roughly.

Are you intending to sell any offices there? Yeah. Just on the spread in between the disposal between health care and offices that you

Jean Pierre Hanna, CEO, COFINIMO: could be expecting for the To, you know, to be totally transparent, we especially when there is only a small amount left because there is 30,000,000 left, not to jeopardize our position in any negotiation. We we prefer not to precise whether it’s an office or healthcare because if someone knows that it has to be an office, then I can tell you that in the room, the atmosphere is a bit different. So we remain flexible. We have an asset rotation plan that cover several years. So we are not frozen to sell an asset.

If we don’t sell these assets, we are stuck. So we keep a bit of flexibility and the year end is not a magic date. So there are process that also overlap, of course, the year end. So I would say it can be everything.

Veronik Mertenz, Analyst, Vandenscot, Kepler: Got it. Thanks. Then maybe just on on the letting there in the office sense, maybe just I will first an update on the Montoya tenth and maybe more generally over Bristol CBD. What sign do you see in the market over q two? And to what extent do you have large lead maturity coming into the office portfolio in the next, I would say, six to twelve months?

Jean Pierre Hanna, CEO, COFINIMO: Thank you. We are on budget, so we don’t have, you know, a bad surprise, and I expect even some good news by the end. So Montroyd is also, you know, moving according to plan. Again, you you you read that office market is very polarized. So indeed, secondary assets, I’m not talking about those outside of the CBD, but even in the CBD, low quality assets are not a priority for tenants.

M 10 is, of course, a high quality asset with a very good rent. As you know, it’s with this asset that we have pushed up the highest rent in the CBD. So the team is very dynamic, and we are not experiencing in our portfolio, you know, a a downside of the base for renewal or anything like that. But as you know, we are extremely active to prepare things and to make sure that our portfolio remains state of the art.

Veronik Mertenz, Analyst, Vandenscot, Kepler: All right, clear. Thank you.

Ben, Call Coordinator: We currently have no question coming through. So as a final reminder, if you would like to ask a question, please press star one now on your telephone keypad. Just give a few seconds. Star one now. Well, there are no further questions, so I will hand you back to your host to conclude today’s conference.

Thank you.

Jean Pierre Hanna, CEO, COFINIMO: Thank you, Ben. Let me to thank you all. And for those of you who still have the holidays ahead of you, enjoy it. And for the others, too bad. And, we have also had a lot of work during this summer, as you can imagine.

But as you know, we are always at your disposal. So our investor relation and the rest of the team are there. If you have any question down the road, happy to answer them. Thank you, and have a good day.

Ben, Call Coordinator: Thank you for joining today’s call. You may now disconnect.

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