Good afternoon, this is the operator. Welcome to IGD's presentation of H1 2023 results. Let me remind you that all participants are in listen only mode. After the presentation, the Q&A will be held. To be assisted by the operator during the conference call, press zero on your, on your phone. Let me turn the conference over to Mr. Zoia, CEO of IGD.
Good afternoon to all of you. Thank you for attending the conference, despite it being August the first with a very hot weather. We have just approved the half year results. I mean, the board has just approved the half year results, and I'm going to share some more info as well. I'm sure you already read the press release. I will walk you through the presentation, and then we will have a Q&A session.
At the beginning of the presentation, well, we have introduced where we want to head. That is to say our priorities, what we want to do with the company. We want to increase core business profitability. We want to enhance our financial position, meaning refinancing our maturities, and we want to generate additional value through our businesses service for third parties. For the first time in this quarter, it will be presented through a slide, just to give you a flavor of what we are doing with it. In this half year report, we tried to show you all of our operations with reference to the focus we have.
We have a strong focus on sustainability, and, in our day-to-day business, we want to focus on sustainability [audio distortion] for the environment, and, whatever pertains to the ESG [audio distortion]. Let's move on to highlights, the financial highlights. The first thing I'd like to share with you is that net rental income, a disposal that was completed in April, a very strong disposal. We're talking, a hypermarket, a shopping mall, and a retail park. So we see that net rental income is flat, down 0.1%, 0.01. And, on a like-for-like basis, we have, net rental income equal to -- well, it would be up 4.5%. EBITDA, core business EBITDA, we've a 5% increase with an EBITDA that was restated, generally speaking, as a positive trend.
As we said before, I'm not going to further dwell on this, the financial position, 92% previous year, and, this of course affects our FFO, which on the one hand has nothing down and if we compare that to data on a like-for-like basis, considering, an impact on our, real estate. We're talking about EPRA NRV is also declining, but the interesting thing is the value. As we said before, the objective, the target of the disposal, tactical disposal, as I said before, was exactly this. That is to say, to cut our LTV and therefore give us the opportunity to face up to the market with a loan to value that would be, lower than 42%-45%.
If you look to page six, let me stress the fact that it's still a long way to go, but we've started our journey in this Q1 of new governance, of this half year new governance, with data that make us hope for the best looking forward. End of March, we had in renewables a downside of 3.5%. In this Q2, we have a 3.6% upside, but it's all zero setting, completely offsetting the change, the negative result we had end of March. I've also mentioned how our one of the criticalities that I have identified once I was appointed was a WALB, and there too we are doing, we are really focusing and we're working hard to extend the maturity deadlines.
Again, we embarked on a good journey. We went from 1.78 in Q2, we went to 1.82 in Q2 2024. Please remember that the renegotiation or break options will happen stepwise. We renew contracts, but at the same time, we all want some maturity, and it's therefore a complex negotiation. However, I want to show you this signal that is, according to me, a positive signal after what we told each other last time on July 4, we are keeping our promises, and we're trying to focus on our side and well. We have a further target, that is to say, within the timeline of our business plan, we want to achieve full occupancy of our assets.
And in three months, if we take 20 basis points as average, and we take malls alone, it's 22-20 basis points. And Romanian occupancy went up 7 basis points. So the three main headlines, we are walking, somehow we're headways, we're walking. On the property side, we have a very sizable effect that was divided by the total. And I can finally give you the result. Valuations, property valuations, asset on our portfolio are very small, were slightly, went slightly down, 0.5% was the write down. Mainly driven, as you can see on the slide, the delta between -0.21 and - from malls, -0.8 with hypermarket.
That's the data we are looking at, because all indicators in September were pointing towards a much higher inflation, and inflation was then lower than expected, and that of course has an impact on rents. And therefore, even without considering rates, we have this minimum impact. But what I'd like to stress is that the first half, on a like-for-like basis, was a very positive one indeed, compared to the write-downs we have seen in the previous years. And the curve is indeed a performance curve, indeed. As we also told the board this morning, we're starting to see somehow a light at the end of the tunnel, so to say, the tunnel we've been going through over the last couple of years.
In order to calculate the loan-to-value indicator, taking the net debt that we have, you compare that to EUR 1.7 billion of freehold properties, and then there are two leasehold properties, EUR 13.5 million, and there are two equity investments, which are the juice and the food fund, which we will talk about a minute from now. So as you can see on slide seven, the freehold, the property portfolio, had this EUR 8.5 million, which is the result of lower inflation than expected, but I believe that this is going to change towards the year end. Then we have the leasehold portfolio with a structural write-down related to IFRS standards.
Basically speaking, where we have asset rents, we have to calculate the right of use, and this too is an item that will go down to zero, half of which will disappear in 2026, and the remaining part will indeed go down in 2027 and be eliminated. And I say so because in a few months we will present our business plan, and you will see that in 2026, you will no longer have this effect, and in 2027 everything will be down to zero. Let me talk about the goodwill impact that the disposal we carried out. It's a very important impact, EUR 29 million. Let me say that it is a one-off effect.
Let me try and explain what it means very rapidly, and then of course, we can drill down if needed. You all remember that we disposed of this portfolio. We contributed that to a fund, then we disposed of 60% of the fund stakes, and we kept 40%. Now, our first assessment was the following: so we sold 60, and this leads to deconsolidation. Once we've carried out the assessment based on our governance systems and the accounting standards that we use, the portfolio was disposed of. We remained with 40%, and now we have to consider the cash flows-
... needed to actually improve the situation of equity, indeed of a lower grade compared with Class A Unitholders, these are within 60 investors. Now, since we have a postponed, the system that we used is the Discounted Cash Flow system. So we took our stake, we applied the business plan with the disposals. When the plan, we discounted the flows based on a rate with the IGD group rate, and this leads to a one-off effect. This will not be adjusted until the end of the business plan, which means that, once okay [audio distortion].
Clearly, when we actually implement the business plan, when it comes to the food plan, if everything goes as expected, that time we will get like the initial EUR 100 million of the stake, and there will be a potential capital gain, which will be booked at the time when it is actually realized. But today, we have this write down, which I want to repeat it once again, is a one-off effect. In the light of all these impact on our balance sheet, we obviously see a decline in the EPRA NRV, which goes to 8.92 from 9.22, and this is given by the impact on the FFO and the impact on the asset and stakes valuations.
Purely commercial and performance terms in our slide 9 now, you will see that we have a footfall growing compared with the previous year. This is not something that we should take for granted, because we've had opportunities to say that footfalls take a little bit more time to recover. Whereas we saw a positive performance, we have - 0.5 on tenant sales. But let me say right now that this basically concerns a specific product or type, electronics, which has been growing at 19%-22%. In 2019, 2020, and also until the first part of 2023. Of course, the weather did not help, but anyway, I believe this is fully in line with the benchmark.
This morning, the Italian daily, Il Sole 24 Ore, provided figures from the CNCC EY Monitoring Center, and - 0.9% for the general shopping malls, but we went a little bit better than that. Now, collection rate, we remain on a high performance level, 95%, which is an improvement compared to the Q1 for Italy and 96% for Romania. We keep opening new shopping centers and we keep opening new stores. We are actually ranging from services to catering, restaurants, and regular stores. We had several openings, and the most important one, which will be opened on the fifth of September, concerns the Notorious Cinemas, which we have a very strong partnership.
We are already partners in Milan, in Centro Sarca. We will open a UCI in Ferrara, and this is indeed something that bodes well for the whole asset. Let me now say something about Officine Storiche. There was a positive impact in terms of valuation, and this is because the new leases are coming on stream. On Sunday, we successfully saw the opening of Sinsay, a Polish chain which is growing considerably in Italy. We made a joint communication with Primark. We communicated with opening in September. That was the first Primark store in our network, the second Primark store in the region of Tuscany. And Primark's problem was actually organizing the queue of people who will want to actually visit the store on the fifth of September.
When presenting the business plan, we said that we would focus on digital activities. You will see on slide 12 that out of the six shopping centers of the seven-year plan, the app is already being widely used, which allows us, as we said, at long last, to have the what is known as the IGD ecosystem, where in cooperation with individual tenants, we are offering promotions for new products, which are immediately submitted to the attention of our clients who are registered users of our app. And this is an excellent opportunity for shopping, as well as for getting to know the shopping center and the services which are offered there. So this is really very interesting.
... As to our services for third parties business unit, we've given you some press releases, possible press release about it, but also we've already given some figures we are expecting to achieve for future going forward. On the food front, for instance, we have a minimum fee, minimum guaranteed fee for our facility management properties services, but we also have some lever that we can use on variable compensations. In this quarter, on behalf of the fund, we've been performing a major leasing activity, and we've been re-leasing two lease sites: OVS and Scarpe&Scarpe . And we performed the full renegotiation with tenants activity, and that will of course lead to a valuable fee that will be paid to us and will be rounding up our improvement for business results.
From an IGD point of view, and I'm moving to page 14, we have completed a further photovoltaic plant system. It will be ready, up and running as of September. We are connecting it to the grid, and at that point, we will have 12 plant systems with a sensible peak power, and you can read it on the slide. And then I am very happy to share this with you, because it's been a journey that myself have embarked on, and together with the board, because we want to somehow do something for our coworkers as well. So this is a very important step in our journey. As I said before, we joined the renewal of the national collective labor agreement that was promoted by Coop Alleanza, and all the other Italian co-ops also joined the same agreement.
We're very happy and satisfied. It's gonna cost us something at a corporate level, but this is, I think it's an excellent way to improve, relationships with our coworkers, with our people. That's why we wanted, to show you this step as well, this renewal as well, that we think is very meaningful, also for our human. Let's, dive into figures. I like this page very much, because it's page 16, by the way, and, we have a net rental income starting from EUR 59 million in, H1 2023, and we disposed EUR 2.6 million worth of net rental, but somehow we recovered that both through the growth in our hypermarket mall and also through our, our growth as a whole.
If we look at this time frame, we started from 69, we disposed of some assets, then we and yet we are back to 69. That is very interesting, because please note that at least for the time being, we have not cut our revenues so much. The downside is very minor. Look at core business, EBITDA, we have 53.8. We disposed of assets. We disposed of EUR 2.6 million worth of EBITDA, and yet we are back to 53.9 thanks to the opening of Officine, and then we grew our experiential portfolio. We were at 53.8, we are now at 53.9. And Italy's EBITDA is 73.9.
Romania is slightly less, but EBITDA margin, we're talking, and it's mainly two costs that are being in chart and zero set. EBITDA margin, if we just consider our freehold, that is landing at 75.8%. Let's now look to page 9, point 18 now. We talk about our financial position, and we were affected and penalized in our because of our financial position, which doubled practically. So it went from 17.9 to... Well, we've recovered some ground. It's 17.9 against EUR 30.5 million, and then 1.3 were of non-recurring items, and now it's 6.4. So this this net financial position is really affecting us negatively.
But despite that, our FFO, page 19, which was slightly higher than 10 in Q1, we are now at 18.3, but we have to consider the change in the scope of consolidation.
As well as the increase in the financial position, which accounts for EUR 12.6 impact on the FFO. So we have a little bit less of change in EBITDA with the portfolio sold, -EUR 2.6, which is basically offset by our core business, then EUR 12.6, -EUR 12.6, because of the difference in the financial position, down to an FFO of EUR 18.3. On slide 20, you see the group net results. We started off from a net loss of EUR 47.1. We changed our scope, the real estate perimeter by EUR 2.6. So the group net result, reviewed after the disposal would have been, restated after the disposal, would have been EUR 49.7.
Here we see a positive impact of lower, write-downs and also, an increase in the financial position, EUR 46.9 million, EUR 17.7 million financial position, and EUR 29.1 million, the food impact, which I mentioned before, which leads to a net result of EUR 32.5 million. And here, too, I'd like to emphasize the following: net of the one-off, write-down of EUR 29 million, despite this very, very expensive financial position, we would have gotten close to zero. This means that in the second half year, since we will no longer have this one-off effect, and hoping that valuations have stopped declining and can start growing again, then clearly we will have results that will be more consistent with, a group the likes of IGD.
Importantly, despite the financial position, the core business holds well and remains resilient and can lead to positive results, very positive results. I'm on page 21 now. Now, on the one hand, we have lower net revenues. On the other hand, we have a lower net debt. Let me say that once again, the food disposal had one single purpose: we wanted to cash in EUR 155 million, we wanted to adjust the loan-to-value, and we wanted to provide and send a signal to the market showing that we are able to repay debt as soon as possible. We have an LTV, which is at 44.9%. When presenting the Q1 results, we had a pro forma of 44.4, but after the write-down, the food impact, that accounts for 0.5.
But here, again, this is mostly driven by the food deal. And anyway, we are still below 45. Average cost of debt, as we saw in previous slides, it has a weighing impact. We went from 3.86 to 6.05, whereas, for the covenants for the various loans, we are absolutely in a comfort zone. Last but not least, I'd like to show you for the third time, for the third consecutive time, slide 22, with the 2027 cliff. I keep it by my bedside at home. And we've been working a lot on this over the past few weeks.
The idea which we announced is that we want to reshape the maturities profile, we want to reduce the cliff, and I'd like to say right now that the banking system was quite positive about this. They welcomed this. We over the past few weeks, we've met more or less all the banks that are counterparts to our loans, the EUR 215 million unsecured loan, the secured loan by EUR 250 million, which went down to 190 million. The pool appears to be interested in our ideas. We keep having conversations, in particular with Fitch.
The idea being, wherever possible, to maintain an investment grade rating, and this because today we will turn to the banking system a little bit more, but in the future, maybe for smaller situations, not the EUR 300 and EUR 350, but perhaps a EUR 100 or a EUR 150, we might decide and not to give up the possibility of turning to the market. But as a priority, we want to reduce the 2027 cliff, we want to lengthen maturities, and we want to have a maturities, though, that becomes a little bit more linear and less wayward than it is today. That being said, and despite the major impact on financial charges, and in the light of the fact that the core business is beginning, we will make small steps in the right direction.
We shouldn't be in a hurry. For me, having these three months with all classes in terms of net rent, WALB and outside, is indeed something important. We want to confirm, therefore, once again, what we had already stated on the seventh of May, so FFO of EUR 34 million. Lastly, we have a series of events and dates, and we will have the results that will be presented on the seventh of November for the Q3. We've already confirmed a series of initiatives with the market, with the aim of describing everything and sharing everything we're doing. I'd like to stop here, and I would like to leave room for possible questions. Thank you.
This is the first operator. Let's now start the Q&A session. If you want to ask a question, please star and one on your phone to be removed from the Q&A queue, press star and two. Please ask your questions using your hands. If you want to ask a question, press star and one now on your phone. This question comes from Lorena Varriale with Intesa Sanpaolo. Go ahead, madam.
Thank you very much for your presentation, and sorry if I logged in later than expected. So I'm going to ask a couple of questions. I hope you're now ready for the presentation. Can you give us more color on the valuation, the 0.5% you mentioned on, on your portfolio? Could you have some more color about, could you elaborate on this? Also, we talked about a month ago, you gave, could you give us your debt refinancing, please?
Very well. So the 0.5, which is actually it is 0.83 and 0.31, malls. The other one was hypermarket, but the, the opposite as in the past, is the result of, lower inflation. In November, we had, a slightly, higher inflation in the first year in our DCF. At the end of the first six months for the first year, we see 1.7, in, at the end of June 2025. This is a little bit lower, and this at a DCF level, has an impact on flows, and this is why you see this little decline. Interestingly, it's differentiated 0.9, 0.80 is the hypermarket.
They have a very long duration, you know, that they end at 12.22 years, so after 10 years DCF. So hypermarkets, in terms of rents, grow only with inflation. When there is an inflation forecast which is lower than expected, then of course, revenues are affected. Malls are at 0.31 compared to 0.80, which means that remarketing activities were done on a market level, so there was a growth. The +3.6 of this quarter for the leases that were renegotiated, which are worth about 4% of the total rent. And then there was a slight decline.
The discount rate did not include all the 25 basis points of the ECB rate reduction, but only part of it was reflected, and this is the effect of the actual write down, the decline. Then a few assets actually declined a little bit more. Others actually increased in value, in particular the two assets in Tuscany, the Officine. But that is a mathematical effect because since we see a Sinsay and Primark providing revenue and they are two large surfaces, and this applies to the half year period, we are considering this leads to an increased cash flow on an annual basis, hence the effect. Maremà, which is a shopping mall in Grosseto, is doing very well. Therefore, I mean, we see growth there. There might have been a few losses, but everything very small. So...
This is for the actual write down. On the renegotiations, well, I've mentioned this already. Together with colleagues, we've had conversations with all the banks which are currently involved in the two banking loans. We saw a positive sentiment. Then of course, they're all expecting to see how our accounts are going to perform and how the business is going to perform. Well, but it's a good environment. So by the time we present the business plan or by year end, I guess I can give you more color on this negotiation activity. Let me also add something. Net of the fact that repaying the bond is, which is the most expensive instrument, there will be a benefit also in the financial position, but right now-...
Priority is given to making our maturities a little bit more linear before we even start talking about, having considerable savings, related to rates. And therefore, this is it. So we, we, we are highly focused on this. We're working hard on it, and we believe that in the next few months, we will have, the possibility of providing more color on, this refinancing activity.
Thank you very much. The next question comes from online, Simonetta Chiriotti with Mediobanca. Go ahead, madam.
Thank you very much. Good afternoon, everyone. I have a question on your sales in Romania, asset sales, I mean. You've drawn up a new strategy, and last month you shared with us when you gave us info on your new business plans, and I have two valuations. Do you think, well, now the inflation assumptions should be aligned, while there should be a rate increase that should be favorable or favorable for you? So could there be any write back in second half of the year? And also concerning valuation, as far as I understand, the item which is worth EUR 29 million for the food JV, this has nothing to do with net asset valuation. So it has an asset write down or impairment in the JV product.
And then the last question on your today, is if we can expect the second half of the year some kind of improvement, considering that you're going through EUR 50 million of, most expensive part of your debt, of your loan?
Thank you. Let me start from the easy ones. So the JV food write down or impairment has nothing to do with the assets. In fact, the assets, the properties which were assessed and evaluated by the fund, are absolutely in line with the valuation which had been done for the contribution. It's really on cash flows, given that we have subordinated Class B assets. We considered that this equity could be recouped in about five years. These cash flows were discounted, as I said, with a discount rate, which is equal to the Group one, hence the write down or impairment. It has nothing to do with the asset. Of course, it is not very intuitive for me, too, but I will explain this very well. It is the result of cash flows which have nothing to do with asset valuations or property valuations.
It's just a valuation of the stake. Then there was a question on the cost of debt. Well, of course, we're beginning to see something, but more in the retail area or mortgages for residential homes. In our case, it will be slower. Clearly, though, the idea is that this cost of debt should go down. We will not see a major decline, and a lot will depend on the refinancing deal that we will make. Romania, the process is ongoing. We have started a series of conversations, quite fruitful, as I have already said, and I can confirm that the fact of selling individual assets, single assets, encourages private investors or family offices to go very close to the book value.
So, there is a lot that is sort of being in the pipeline, but we will communicate it when we have news. But let me point out that we're not talking about sales worth EUR 100 million. We are talking about individual items, individual assets with whereby you're selling making sales worth EUR 8 million-EUR 10 million assets at a time. We consider that this could take a couple of years, but it will be very important to me on when we meet next, to say that we actually proceeded with the first disposal. We are highly focused on this. We're working a lot on this. So the idea is refinancing and disposal of Romania. It's quite hot topic.
And then, of course, first of all, rates will tend to go down, so therefore, in the appraisals, models, at least the discount rate should go down in the valuations, which means an increase in the discounted cash flow. Secondly, we saw that the market is beginning to do something. In the first half year period, retail performed much better than offices. I believe that by year end, there will be other transactions. I believe that there is a positive environment. Let me say once again, the retail area is the one that has 150 points more in terms of yields as compared to logistics, not to mention offices.
Which is why I believe that—well, I can't tell you whether there's going to be a write-back or an improvement in values, but as I said before, when I said, when we looked at the group results with EUR 37 million loss, if you deduct the EUR 29 million one-shot, we would have landed at -8. Plus the FFO, which is produced in the second half-year period, and we hope we can have a positive effect on valuations, which means that the minus sign on the bottom line should be a thing of the past. I'm rather optimistic, and I'm optimistic based on the figures I'm seeing.
Today, my perception of the market is that today there are other asset classes which are slightly more worrying, whereas the retail part appears to have gone back in, that's become interesting for investors again. And then, of course, there will be an improvement in the future if the conditions are right.
Let me remind you that if you wish to ask a question, you may press star followed by one on your phone keypad. The next question comes from the line of Federico Pezzetti with Intermonte.
Good afternoon to all of you, and thank you very much for the presentation. I only have a couple of questions, a very, very short one. So the first one is about the increase in rent on a like-for-like basis. It's 4.5% you mentioned. Could you break it down better? Could you mention the underlying drivers, indexation, et cetera? And then the second question on your collection rate, 95%, from 91% in the Q1 to 95% now. Was there any specific effect leading that or giving this upside, and then what are you going to do in the next quarter?
Thank you, Federico. I will address the second question first. We said that when communicating the results of the Q1, this is something quite cyclical. It's quite cyclical to have lower figures in the Q1.
This 95 tells us that there are no major issues. Of course, we need to keep monitoring the situation. You should not be tolerant, so to speak. And our peers have a target of 95, 98, 97, and knowing that the Q1 is always the rather more negative one, and the last one tends to be the most positive. So let's say that this 95% is a good balance, something that can shows an improvement, like for like. But there are two components for revenues. The first is inflation growth.
Inflation is growing less than expected, but when compared to the last year, and you saw what happened in the second half year of 2023, and then what happened in the first half year period of 2024, when you see the effect of indexation, the contract, you see a growth. There was an impact on the upside. And then there is something that is going to play a role in the coming year, in the coming quarters, too. I'm referring to the steps which are granted with the renewals or new marketing activities. For example, a new tenant, in particular, if they have to go for major investment in their stores, would ask for the following: "Well, we will pay you eventually EUR 100.
Perhaps you can help me with 10 the first year, 5 in the second year." So it's sort of step rent agreement. So it's a virtuous circle because, little by little, the actual step rents become. They were granted in 2021, 2022, 2023, when the full rents are being paid, at that point, you see an advantage and you see an increase in the overall value. This is an excellent driver, and we are using it in order to increase our worth. What we're trying to do, and I have to say, this is really a painstaking job, but it's giving results. We say: "Well, your contract or your lease is up for renewal. I can help you for the first year, granting you a discount on the first year.
But if in the past you had the break option at 36 months, now, you will have it at 48. You need to accept that it's 48." So the right balance between helping tenants, in the start, start-up stage, while at the same time, lengthening, the duration of the lease. And that is beginning to bear fruit.
... consider that we renewed, as I said before, 4% of our total rents from 1.77 to 1.82 in, in world, which means that in all the deals we've entered into in the Q2, not only did we have a little bit of upside, but we also managed to have break options which are slightly longer. So it's a balancing act, really. And we also added digital for good measure. So today, in the leasing and digital department, we are actually considering the possibility of, the start up effect on the rent break options and digital activities, which can lead to a partnership between the shopping center and individual tenants. The app is one of them.
But then, of course, we are working also on very many other initiatives in cooperation with our tenants, for example, in terms of events as well as communication. To build customer loyalty, too. So it's a joint action where we said that as a sort of a slogan and motto in the past, but I'd like to repeat it here, because I like actually to start negotiations when needed. We talk about everything, and lease values are indeed, rental values are indeed important, but they're only a part of a partnership agreement, which has to be a lengthy one. We have a lot that we can improve on. We have +5.3, we have positive upsides. We have a WALB which improved. A lot remains to be done, that we start off from a level where you can only improve.
That is my impression, and this is the impression I wanted to share with you today.
Now, the next question from line four, actually, Simonetta Chiriotti with Mediobanca. Please, madam, go ahead. Mrs. Chiriotti, your line is open. You may ask your question.
I would like to take advantage of your point of view on retail. How do you view the credit consumption in the second half of the year, based on your tenant performance also? If you look at the first half and then the outlook for the second half, your peers do not seem to be very positive about the outlook on consumption going forward or as far as payments are concerned. So what do you in this respect, as to somehow the health check of your tenants, and what is the trend you expect on their revenues, on their sales?
Okay. We are monitoring them very closely, our tenants, I assume.
I look at Italy as a country more than at individual geographies or malls, because there are different countries in the different parts of the country, but I see a shrinking somehow of consumption. What we can say about the outlook is, and that may to change our approach, is in the field of electronics, in the picture of electronics, which really boomed with incentives first for the sale of set of decoders and then with COVID, because we've all been buying a lot online and we've been seeing a lot of electronics. It's a product category that has to be kept under our radar somehow. The size of stores will shrink going forward, not just because we have only channel approaches as well, but also because they will want to save on rents, on personnel within the store.
I think that has to be—we have to keep an eye on that, because, and although luckily in our portfolio, we don't have very large large stores, like in electronics. We always bet on 1,500, maximum 2,000 sq meters, whilst MediaWorld, in the golden age, say they wanted 4,000 sq meters. That all those stores have to be downsized. Then clothing and footwear. Clothing suffered a lot, and footwear as well. Now, Scarpe & Scarpe, also these tenants, they went almost bankrupt in the past, and now they are trying to move on, but focusing on a different segments, because they have to have novelty, they have to have low prices.
Deichmann, for instance, one of our tenants, which is a medium low footwear product, is performing well and they are opening a lot of stores. So, it very much depends on individual factors. Then fashion. The fashion team is standing its ground somehow. For the kind of market we have in our shopping malls, I don't see it as a criticality, and restaurants in shopping malls are doing really well. As to services, we are really working on it, and we're doing a lot of work. There, too, you always have to come up with new ideas, going from healthcare to services to citizens somehow.
For example, something that comes to mind, we are going to have some of these tenants enter our shopping malls, where we are shopping malls with no IKEA nearby. There's a store where you can buy, and you can be helped, you can buy something, and then you are helped by personnel. It's 200-meter stores, and they provide services. You buy things, and then in cities where you don't have IKEA, you have these small stores within a shopping mall, where you can buy furniture, and then you have it. You are assisted by personnel once you've bought it. And in our portfolio, we don't have assets with 300 stores, of which 90% are shopping. We are not so worried about consumption, but you need to be very dynamic.
You really have to change your product categories. Even when it comes to restaurants, the work we are doing is to find new brands all the time, because who goes to these restaurants? Those who go and have lunch there, but if you have five different types of offerings, by the end of the week, you've had enough. So today, I see that rotation turnover, also in restaurants, it's a plus for the minus. It's really not a con. The more I change, the better, going to go back when that inflation really took out a lot of consumption, because prices went up a lot. And I think that if inflation is going to decline a bit, we should not experience too many problems in our shopping malls. But this, again, is an item that has to be monitored.
We never have to be too focused on one product category rather than the other. Clothing in our malls, at peaks of 70, now we are around 50%. But, it's something that it's an exercise we constantly run on a product category by product category basis.
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Perfect. Very well. I would like to thank you all for joining us, and have a good summer if you're going on holiday. Talk to you next time.
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