Good morning, ladies and gentlemen. First of all, a very happy Valentine's Day. I hope you all received a lot of mail this morning, or maybe later today. First of all, we have already good news for you: the acquisition of two shopping centers in Luxembourg. I'm Matthijs Storm, I'm the CEO of Wereldhave, and I'm here today with Nicolas Rosiers. Perhaps a new face for some of you. Nicolas is the Deputy CEO of Wereldhave Belgium, and together we'll talk you through the rationale of this acquisition.
As usual, with our webcast, towards the end of the presentation, we will deal with the Q&A. In the text box below your screen, you can already start typing questions. If you have questions already, just type them in, and we will deal with them towards the end of the presentation. So let us kick off with some key messages of this acquisition. Wereldhave is buying two shopping centers from Nextensa, a Belgian-listed company in Luxembourg.
One of the two centers, Knauf Shopping Pommerloch, is acquired by Wereldhave Belgium, and the other one is acquired by Schmiede, by Wereldhave NV. Why have we opted for this structure? It's because I think it's logical, it's natural that Wereldhave Belgium is the buyer of the two centers. Nicolas will give you some more color later why there are a lot of similarities between Luxembourg and Belgium. However, the deal in itself is too significant. It's too large from a financing perspective for Belgium. That's why we split the deal.
In addition to that, Wereldhave NV also has access to equity. We'll get back to that later in the deck, but I'm already very glad to report that the EUR 35 million of new shares that we've issued to Nextensa have been sold by Nextensa to the market at a 2.5% discount. I think a very good achievement from the banks that have helped us in this transaction: a 2.5% discount compared to 6.7% when we did the last equity placement in December 2023.
Continuing with the acquisition itself, there is significant upside in these assets through transforming them into full-service centers. That's our strategy, so that's logical. We'll get back to that. It's an almost fully tax-efficient deal. It's a share deal, so no transfer tax, and there's hardly any corporate income tax to be paid, which is important for the companies. Acquisition price is EUR 167 million, including all cost.
The gross price was EUR 165.75 million, so we only incurred EUR 1.25 million of cost. We didn't use any brokers in this deal, only some help on the technical DD, of course, the lawyers that you need. But I think we've managed to keep it pretty cost-efficient for all our shareholders. Net initial yield, 8%, which I think is compelling in this market. It compares to a 5.9% net initial yield in the valuation of our current Belgian portfolio. Wereldhave Belgium has financed Pommerloch fully with new debt. We'll get back to that.
And Wereldhave NV, with a combination of the new equity and our revolving credit facilities. We'll talk about that later. Lastly, what's the impact on the direct result per share? For Wereldhave NV, it's EUR 0.05 per annum, and for Wereldhave Belgium, it's EUR 0.38 per annum. Having said that, of course, we need to adjust our guidance that we gave out only two days ago.
For Wereldhave NV, it means we now believe we will come out at the higher end of EUR 1.70-EUR 1.80, and for Wereldhave Belgium, we set a new range of EUR 5.35-EUR 5.45 per share, so let us focus on the key terms of the transaction. I've already mentioned the seller, acquisition price. I think it's important to bear in mind that these are two shopping centers, but there is also office space, there are gas stations, there's also some non-retail, but in our Life Central strategy, that is part of what we believe is a future shopping center, so to speak.
We'll get back to that. In addition to that, we will be the 100% owner of both centers. There's no fragmented ownership. Both assets are anchored by a very large Delhaize food store, the number one and three in the Benelux. So that's a very strong point to have, and we are the owner of that space. We're the owner of the surrounding land and also the parking spaces. That's not always the case in Belgium or France, even not in the Netherlands, but in this case, it is so. Acquisition, did you know? If we focus on the net initial yields, the average is 8%.
The yield for Pommerloch is a bit lower. That is also because in that center, we think we can extract more growth in the future. Reversionary potential, Nicolas will tell you some more. Schmiede is more a convenience shopping center with a lot of discounters and other offerings. The financing of the deal we've mentioned, and also very important from a cost perspective, we won't hire any additional employees. We have a very strong team in Belgium.
Nico will tell you more about it later, and that team will manage the two centers in Luxembourg. However, as part of the deal, there will be six employees coming across from Nextensa to Wereldhave Belgium. For example, marketing, technical, asset management. They're on the payroll of the service cost, so that has no impact on the cost of the general cost of Wereldhave NV or Wereldhave Belgium, then the rationale. Nicolas will tell you a bit more about Luxembourg later and why we think it's very complementary,
but in general, it's a country with very high incomes, very high purchasing power, a good place to be for retail and regulated supply. And of course, it's obviously very close to the Belgian border. Life Central strategy, there are several ways to extract value from the strategy. Our Eat and Meet concept, more F&B, more qualitative F&B, we already have very concrete ideas.
Our service desk, The Point, several customer journey elements will all add value to the deal. Lastly, the upside, I already mentioned the reversionary potential, mostly focused on the Pommerloch center, but also additional income through specialty leasing, the land surrounding the centers, and also ESG income, think about solar panels or EV chargers. With that, I'd like to hand over to Nico.
Thank you, Matthijs. When you speak about an acquisition, you have first to look at also all the socioeconomic and macroeconomic dynamics, and when you look here on this slide, we have just three elements to share with you. If you look to the first one, you see that the index of GPP per capita is in Luxembourg more higher than in every other country in the European Union, and if you see the Belgian one or the Netherlands one, the Dutch one, you see that in Luxembourg, you're at the double, almost the double of the Dutch one,
and the double of the Belgian one, which means it's also very interesting for a retail owner. Second, and that's also important because it gives you a competitive advantage at the existing shopping centers that the legislation entails only new shopping developments, not only with a local approval, but also for national approval, which means that you, with these two centers, we're quite well installed in the north of and middle Luxembourg.
And last but not least, on this slide, you see the average housing prices, which are increasing and are increasingly high in Luxembourg. You probably know about that, meaning that there is a shift in the families which are moving from the south of Luxembourg more to the north, increasing the, in the catchment area, the presence of families, which are the goals and the targets of both shopping centers.
Of course, and that's also very interesting if you see to our Life Central strategy in 2019 for the group and also for Belgium, meaning that Belgium, Luxembourg, and Netherlands are now part in one single market. On the right-hand side of the slide, you see why it is that we believe, and this is also why we agreed with Wereldhave NV, that Wereldhave Belgium will manage both centers because we see that there is a lot of overlapping between these two markets. First of all, we're close to Belgium.
More than 50% of the footfall comes from Belgium in both shopping centers. Second, we see that the legislation in Luxembourg and Belgium are quite comparable. If you see, we saw that the obligation to share the turnover data, not only that, but also the lease agreement are quite similar. Proceedings, the procedure of leasing renewals and so on, which makes it for Belgians easier to do,
and last but not least, it's very important that it's a very high overlap of the brands that you see in both shopping centers. I believe 2/3 of the brands present in both shopping centers are also present in our Belgian portfolio, meaning that for us, it gives also a competitive advantage towards these brands in negotiations.
Thank you, Nicolas.
And then we have the various, yeah, the characteristics of Pommerloch Shopping Center. You see on the left-hand side that it's quite similar to the shopping centers that we have in our Belgian portfolio, like a Nivelles Shopping Center with almost a little bit more than 30,000 sq m , a huge parking with 1,200 parking spots. Another KPI, which is very important, is the occupancy rate. You see the 100% at this stage in Pommerloch, which is naturally can't do much better than that. We will keep that in the coming years.
Another KPI is the footfall increase. You see 2.4 million people coming there with an increase almost of 4%, which is also the increase that we noticed in our own portfolio last year, but which gives, well, us an expectation to grow that figure in the coming years. On the middle, you see all the tenants present. That's what I told you a few minutes ago, that if you see the brands appearing here, we have them in our portfolio in Belgium, but also in the Netherlands.
And last but not least, at the right side of the slide, you see an important figure, which means that in 2029, 34 lease agreements will have to be renewed. So it gives us the time to integrate the shopping center in our Belgian portfolio before again trying to grow, to make our rents grow and to improve our management, to have a good management of this center in the coming years.
Thank you, Nico. Then on Knauf Shopping Schmiede, the overview, you can see the center is a little bit larger. I would dedicate this center as a convenience center. Why? You can see at the bottom of the slide, Daily Life is 75% of the rental of the center. That's very high. So it comprises of the Delhaize, a Medi-Market, a Pronti discounter, those kinds of stores. That's the offer of Knauf Shopping Schmiede. A little bit less footfall, 2.1 million, but very dedicated footfall.
As we also see in our Belgian centers like Nivelles, for example, these are not centers with five, six, seven million footfall, but the people who come are coming as a destination and they spend. And we see that in the turnovers. Also here on the right-hand side, you can see there's a lot of overlap with the different brands that we have in the Dutch and Belgian portfolio.
Then focusing back on the strategy, on the left-hand side here, you can see a couple of KPIs that we basically, criteria that we identified when we launched the Life Central strategy back in 2019. I think you can see here with Pommerloch and Schmiede, I'm not going to read it all out, but they tick the box. For example, control. You might remember in December 2023, we acquired in Hoofddorp Shopping Center, Polderplein, because it was the other half of the center we already owned.
For us, with our strategy, with the investments that we do, it's important that we're only, that it's only us benefiting from that. And there are no other real estate landlords in the vicinity. Now, in this case, I already told you we will be the 100% owner of both centers and of the surrounding land. Also, from an IRR perspective, the deal ticked the box financially. We get to 8.9% unlevered IRR for Pommerloch and 9.6% for Schmiede. In both IRRs, we have included about EUR 4 million or EUR 5 million of one-off CapEx.
We've also included about EUR 300,000 per annum for each center of maintenance CapEx . We have not captured the reversion in these models. So any reversionary potential, and we certainly believe it's there, will be on top of these IRRs. And lastly, we've only included a minor part of yield compression, 30 basis points for Pommerloch and 70 basis points for Schmiede in order to get to these unlevered IRRs, which I think screen very attractive. Then from a Full Service Center perspective, F&B, leisure, well-being offices.
There is already F&B, but we think we can do more and we think we can do better. Leisure and entertainment, you see on the bottom right side of this slide, you can see an example of the Arcadium, which is a game hall in Knauf Shopping Schmiede, with also a bowling, laser gaming. So that's a good destination for the next Capital Markets Day.
We think there's an opportunity to implement fitness and also offices. In both centers, there is a significant amount of office space. It's fully occupied. We think there might be room to expand it. With that, I'd like to hand over to Nico.
Yes, we believe that there is potential for growth in rents in the coming years because if you look at this slide, we have indicated with the red line there the average level of rents for the various tenants that we identified on this slide and various categories, which is fashion and also health and beauty.
What you see there is that given that the fact that there are higher turnovers in Luxembourg than in Belgium, we see that the rent levels are lower than in Belgium for both shopping centers, so we consider that there is an increasing possibility there in terms of rents in the coming years, and second, we are specialists in management of shopping center management, and we strongly believe that there is still potential for reversion in these three categories.
First of all, it's mentioned we also acquired an undeveloped land in Pommerloch on which we believe that there is a possibility of expanding the shopping center furthermore. Second, and you see the three categories where in Belgium we are quite active at this stage, specialty leasing, for instance, we strongly believe in specialty leasing. It is very huge, becomes a huge part, a huge part, an important part of our figures with approximately 1.7% of our total result and of our GRI.
Second, we have our ESG strategy. We will start rolling out our electric vehicles charging stations in our Belgian portfolio. We will do it there in Luxembourg too, additionally with solar panels on both assets. And last but not least, we have The Point, which is our service hub, which is gaining more and more profitability and which has been with a proven track record in Belgium. We will roll it out also in Luxembourg.
Thank you, Nicolas. Then on the financing, in total, it's a EUR 167 million deal, including all the cost there. So there's no transfer tax, but a little bit of consultancy fees if you wish. I've already explained that. Then Wereldhave NV is financing EUR 35 million through a contribution in kind. Again, those shares have been issued to Nextensa and have already been sold in the market. Next to that, Wereldhave NV draws EUR 28 million from existing credit facilities. Wereldhave Belgium has raised EUR 100 million of new debt with our core banks.
It's all unsecured debt, important to mention. The duration is 4.5 years and the spread in Belgium is 137 basis points. I think very compelling because you end up with an all-in cost below 4%. Lastly, a small amount of EUR 4 million from the existing facilities of Wereldhave Belgium. Then the impact on financial leverage, important for us. We start with the EPRA LTV for Wereldhave NV. What you can see in the middle bar here, that first of all, there is a slight increase after this acquisition, but we do believe there will be valuation synergies.
We do believe there's potential for value creation in the upcoming valuations. If you include EUR 20 million of valuation uplift, you'll end up at 47.9%. You also know that we're in process of selling our second Dutch asset. We announced two days ago, we are three days ago, we're selling, we have sold Winkelhof in Leiderdorp. We're in the process of selling a second center. Then the EPRA LTV will come down to 46.2%. For the net LTV of Wereldhave NV, there's a similar pattern.
There's a slight uptick, but I think after the second disposal, we will be lower than the net LTV of year-end 2024. For Wereldhave Belgium, however, as you all know, this company has always been at a pretty low financial leverage. I think 35% or even less than that is still a very conservative financing ratio. Net debt- to- EBITDA for Wereldhave NV, I think the 7x post transaction versus the peers at 8.8 is very still very conservative. Then the financial impact on Wereldhave NV, the unlevered IRRs I already mentioned, our threshold is 8%.
You know that, so they tick the box. The WACC obviously is super low, partly thanks to the cheap Belgian debt, also partly thanks to the fact that our share price did a very good job over the past couple of weeks. So our cost of equity landed quite a bit lower than what we anticipated. So that's good.
Of course, we also use a disproportional amount of debt in this transaction, which is pushing down the WACC. If you purely focus on the equity, 8% net initial yield in the middle bar of the sheet versus what we say here, 7.8% implied net yield on the stock as per the Green Street data from the beginning of February. But if we look at the share price today, it's more 7.5%. So I think that is a clear signal to buy at such yields. Our EPRA NTA is actually going up a little bit, EUR 0.06 per share because of this transaction, because of the value creation.
And then lastly, before we go into the Q&A, the equity financing of Wereldhave NV, EUR 35 million. We've issued 2.2 million shares, about 5% of our capital. Issue price is EUR 15.86. That is materially above about 10%, I think, above the price where we issued equity a little bit more than a year ago. So I think a very good performance from our teams. And again, these shares have been sold in the market at a 2.5% discount last night and this morning. The receiver of the shares is Nextensa, a Belgian listed company.
And the new shares, important to notice, are fully entitled to the 2024 dividend. Here you see the summary, but I'm not going to read it all out because this slide is exactly the same as the first slide. So we'll keep it on the screen and we'll go straight into the questions. Again, if you have any questions, please type them in your text box at the bottom of the screen and we will treat them.
We already have two questions from Rahul Kaushal. I hope you pronounce your name right. First of all, did the unsecured debt raised to acquire Pommerloch occur post the 2024 results? The answer is yes.
Yes.
So it's not reflected in the balance sheet provided a few days ago. I think that's correct, Nico.
Yeah, that's correct.
Please could you provide some color on the interest rate at which the new debt was raised and on the debt drawn from the existing credit facility? I think we already touched upon that. Below 4% for Belgium, 137 basis points margin. For the Netherlands, we draw from the existing RCF, which is at a margin of 170 basis points versus one-month Euribor. I think if you do the math, you end up a little bit below 4.5% for the Dutch, EUR 28 million debt. Then we have two questions from Steven Boumans, ABN - ODDO .
Please comment what the valuation synergies are and why a just acquired asset can be valued higher than what the market price apparently is. Furthermore, do I calculate it correctly that the valuation synergies are estimated to be EUR 20 million-EUR 25 million? I think I already mentioned the EUR 20 million figure, Steven, that is correct. I think if you read the press release from Nextensa and the EUR 29 million valuation loss that they report, that should also give you some indication.
Of course, this is an estimation from our side, but we are quite firm that this will occur in the upcoming valuations, also given the high yield of the assets, 8% versus 5.9% on the Belgian portfolio. Another question from Steven, could you please quantify the development opportunity here? So CapEx per year, expected increase in rent and valuations and timing. Good question, Steven.
I think the honest answer is that, of course, we have our ideas out of the data room and out of all the due diligence we did. We certainly have some high-level plans already. We don't have the exact data yet. I already mentioned the CapEx we will spend on the assets, about EUR 4 million or EUR 5 million per asset. Some of that is also commercial CapEx, but for example, in Pommerloch, that will increase the rents, Steven. I think in total in Pommerloch, there's about 20%-25% long-term reversionary potential to be extracted.
So I think that in itself is already interesting. Secondly, we also buy the land surrounding the assets. There are conversations with some larger chains to build big boxes on that land. Given the fact that we have that land at zero valuation in the books, I think it speaks for itself that we can achieve very nice cash- on- cash yields on those developments.
And a last question from Steven. Wereldhave Belgium was restricted to dispose given the concentration limitations from the Belgian GVV REIT legislation. That's correct. What does this transaction mean for this? And could you provide some color on the probability to dispose offices going forward?
Yes, two questions. Thank you. The first question is that we, with this acquisition, we will increase the balance sheet. And if you look to the Belgian legal criteria calculation for the concentration, how bigger the balance sheet is, how smaller the different elements of the balance sheet are. So this means that we have still potential either to acquire and also to look for potential disposals if it would be decided, which is not the case up to today.
And second question regarding the office portfolio, that's indeed our main focus is retail. So at a certain time, we will consider, well, selling and disposing the office portfolio, but at this stage, there is no decision regarding to this.
Thanks, Nicolas. Then we have a question from Peter Schutte. Is it correct that Wereldhave NV issued the new shares at a 0% discount to Nextensa? Yes, that is correct, Peter. You did the right math. Then we have a question from Arthur Talarico. Hello, could we see some simplifications between Wereldhave Belgium and Wereldhave NV? The idea behind the acquisition by Wereldhave NV was mainly to increase capital?
No, Arthur. Right from the beginning, about a year ago, Nicolas, both Nicolas and myself thought that this would be a very complementary acquisition for our strategy and particularly phase II of Life Central. But we were struggling how to finance this. Again, for Wereldhave Belgium, it would make sense to do the whole deal, but it was too big and we wanted both centers and also the vendor wanted to sell both centers.
However, to buy the two centers only with Wereldhave NV, in our view, also didn't make sense because Wereldhave Belgium will manage the assets. So I think in this structure, even though a bit particular, I think we have the right optimization. I don't know exactly what you mean with some simplification, so we can also talk about this after the call. But I think we have a very clear structure at the moment. Wereldhave Belgium will manage and the ownership is, as we mentioned on the slides.
Yeah, perhaps I can pick on that one. Matthijs is very too big to make clear that it was two separate transactions. There are two separate transactions, one with Wereldhave NV, one with Wereldhave Belgium. And they worked their own path in parallel. So there is no deal, global deal with Nextensa. There are two separate contracts.
Then we have another question from Jeroen De Molder. Can you comment on the share replacement that was executed on behalf of Nextensa and give a bit more color on that? I think we already sent out a press release this morning on that, Jeroen. The book was more than six times covered. So that is a lot of demand. We could have done EUR 200 million.
Thanks again for all the investors that are on this call that wanted or have participated. And thank you for your confidence, by the way. The shares were placed at EUR 15.40. That was only a 2.5% discount to the last close. I think we're very happy with that book, also with the names in the book. So that was a good performance. I'm looking at the screen to see if there are any additional questions. No, I think we dealt with everything. So I think we're done for now. Thanks a lot for participating. Thank you for your questions.
If you have follow-up questions at the bottom of this presentation, you see the contact details of both Jeroen Piket, investor relations of Wereldhave NV. You can also contact Nicolas Rosiers for Wereldhave Belgium if you have specific questions for Belgium. We're very happy to answer. I hope you have a fantastic Valentine's Day. Buy some roses for your partner or a nice dinner tonight. I don't know what you're up to. Enjoy it.
Thanks again for your confidence. Thanks for all the questions in the call, and I hope to see all of you soon. Thank you. Thank you.