Good morning, everyone. Welcome. Thanks for accepting our invitation to the presentation of our 2025-2027 Business Plan. We start the morning, and let me turn the conference over to our chairman, Mr. Antonio Rizzi. Thank you very much.
I would like to thank all of you on behalf of our company, of the board of directors, and my personal thanks too for attending this presentation. This is a pivotal moment in time for the company, and it's a time in which we expect to draw up projects for the future to go forward. The contents of the business plan will be disclosed to you by Roberto Zoia, our CEO, and he will tell you about the basic lines along which we are going to move forward. Let me add something that sometimes may go unnoticed because we focus on something else. It's the following: this business plan starts from a completely different base, against a completely different backdrop. It's a business plan that lays on different foundations, if you wish, from the previous ones, and it involved the entire company.
This is something very important from a quality viewpoint. The very roots of this plan are to be found in the actions that are performed day in, day out in our company. Let me give you a detail that's small but meaningful. Last night, the board of directors met to approve the plan, and we met not at the headquarters of IGD, but in a shopping mall here in Milan, in our shopping mall here in Milan, the Centro Sarca. It's a small signal, it's a small sign, but it really gives you the idea of somehow it's a sign of discontinuity from the past, of a discontinuity our business plan is showing. It's a decoupling from the past, and we have a very strong tie with our company in all its components, so to say.
Again, a sign of discontinuity is, again, the fact that each and every employee of IGD received an invitation to take part in the meeting we organized. The business plan is the outcome, is the offspring that all of our employees and coworkers, together with us, have really created, so we wanted them to be fully involved in the plan, so I would like to thank them very much for all the hard work they've done so far. They put a lot of passion and commitment to what they've done so far, and let me add something else, because of course then you all want to hear about the plan, the nitty-gritty, so to say. Yes, the nitty-gritty of the business plan. Let me just add one more thing. During the business plan design process, governance played a major role. You've been following us, you know what we do.
The board of directors did not just meet to give the green light to a business plan that was drawn up somewhere else. No, we were involved from the very beginning. Ever since we received our mandate, we decided to somehow change things, and we have done so over time and to change course of action, and most of the board of directors are involved, or all board of directors are involved, and I'm very proud to say that here we have the entire board in attendance, and it's not that they're here just to be taken for granted, but we are here to give a sign, a signal, meaning that we have been involved from the very beginning, from the very start, with commitment, dedication, and enthusiasm. This is the key word I would like to share with you. Thank you very much.
Very well, this is Mr. I've been here when I was appointed seven months ago, and I really feel like having been here for years, having been a CEO for years, because I've been with IGD for 18 years now. So from the very first conference call, I told you when we first met on May the 7th, sharing Q1 results, I told you what the issues at stake were too, basically what the main issues at stake. We were getting out of a first quarter with a downside on renewals and contract renewals down 3%, down 3%, and a net financial position that we were all aware of, so to say. So at the time, in May, I already said these are the issues at stake.
Then on July the 4th, with the presentation of the disclosure of our guidelines, I told the markets what the levers were to actually improve things. What have I done over the last few months? I listened to all of you. With many of you, we had one-to-one meetings. I really tried to grasp these suggestions that were made by you to enact change. I talked to analysts, I talked to investors, past investors, current investors, and I hope future investors as well. We talked about the company. And first and foremost, as our chairman said, I really want to say that we changed the way we work. And when I say we changed the way we work, it's not just filling the box in and it's not having an organizational charge and filling all the boxes, but it's really paying utmost attention to day-to-day operations.
In order to get to these results, we had 1,400 contracts revised, 62 assets, freehold assets, and 28 we manage on behalf of third parties, 28 assets, meaning we've been focusing on with the same utmost care and attention and will to improve, not just for us, but also for our clients and on behalf of our clients. We interact with the financial world, with the banking system. We've been working with both universes, and I'll give you more details in a minute. Over the last seven months, I think I have witnessed a strong consistency, a very unified front when it comes to a strong focus on IGD and a unified focus on our part. As our Chairman said, with a very strong commitment by the Board, last night we finished the meeting. We looked into the plan once again. More eyes looking into the plan.
We looked at each and every figure we will be presenting today, and I am confident to say that we have a highly motivated team, a team that is willing to go for these results, to deliver on these results, although very challenging. It's going to be a long journey, but every step of the way, we are going to really do something meaningful to get to the final goals, that is to say 2027 targets, hit and deliver on them. And let's now dive into the business plan. Today, the market, the retail market, and I always say, retail is back. Retail real estate is back on investors' radar.
The transaction volumes at the beginning of the year are much higher than 2023, and it's true that we have a high-street Via Monte Napoleone deal underway, but there were two deals as well over the first six months and a very recent one, always talking about retail investments. We engaged in a tactical disposal, as you all know. We could have avoided it, but we had 49% LTV, and so we had to really engage in that transaction. Klépier, the main European player for shopping malls, acquired the Roma Est shopping mall, and the main transaction, the main deal is the very recent one. It's Kryalos who was involved, and it was in Palermo. What does it tell us? That it tells us that retail real estate is a different asset class. What matters in that asset class are fundamentals.
Think of an American investor, for instance, buying an asset in Palermo. Think about that. It's not something easy, but I know that asset very well, and it's a fantastic asset. Its performance is really good. The occupancy level is one of a kind. The turnover, again, is unique. In order to understand retail, you have to understand what the underlying assets are. You see, there's no Milan here. You have Rome, Roma Est, the eastern part of Rome. It's Palermo, and this really makes us say that if you manage your assets well, you generate a positive performance, and then eventually markets really understand what you're doing. The chart below that tells you that retail is the asset class providing the higher returns, higher returns than logistics, residential, or hotels.
And it can become a very important lever to action for transactions going forward in the coming years. I hope that the repricing we've made over the last few years. You know that IGD, unfortunately, we had a lot of write-downs and impairments in excess of EUR 200 million. But let me give you, I want to give you my word that today we are sitting on assets at market value. We did not play the role where we had to defend our positions. We paid a lot. We paid because we had to sell. We paid a price in that respect, but the yield in our portfolio today has stabilized, and I can say that it's higher now and therefore more appealing than other portfolios you can find around the industry.
Let me say that I'm sure many of you know that in addition to being the CEO, in addition to my role in 2020, I looked at all the properties, well, properties Italian and international. Why don't you become the chairman of the shopping mall national council, the CNCC, it's called in Italy? At the time, they were telling us you're dead because of COVID. Everyone will be buying from their couches, from their sitting rooms, and you'll be dead soon. But we reopened with a lot of effort, working hard after COVID. We started growing constantly in 2021, 2022. By the end of 2022, we had to face up to the energy shock, which meant, again, more pain, meaning condominium expenses and costs for our tenants. But we still made it.
Today, the e-commerce share for products, because you often read surveys saying, "Believe me," etc., we're talking about online commerce. But out of that, if we take services, we strip off services, it means I'm buying a train ticket, hotel accommodation. The products and goods have been flat for three years, and they account for 11% of the market. So peanuts, footfalls are back in our shopping malls are back growing. There are features that are very, very appealing. For instance, the growth in movie ticket sales. We all thought that films were only going to be watched on Netflix, but if you have a good product, people still go to the movies. Provide that. It's a very comfortable movie theater with reclining chairs, with popcorn, drinks, and people serving you while you watch the movie. People really want to socialize. What are the challenges?
The challenges are, let me say, we didn't know where to start from, but start meaning listing the challenges. I know that markets, for all of you who are following markets, our financial position was the thing we had to tackle first and more aggressively. Today, we want to optimize our financial profile and position. With our operating performance, we want to be best-in-class players. Best-in-class for me means looking up at Europe. We are small players, small IGD. We account for 70% of the listed real estate in Italy. So I have to look ahead. I have to look at my peers from a different perspective. So first of all, optimizing our financial profile, maximizing value creation from our own operations, and also maintaining our assets as attractive as possible in a sustainable way, making our assets more sustainable. This will be crucial.
All of this because we want to go back to growing. We want to launch a new growing period, and obviously, we want to pay out dividends. And I really listened to what many of you told me. You want our dividend policy to be consistent and sustainable. We cannot get up to dividends that are uncorrelated to the price stock or to our financial profile. But this is something we want to do as all European rates are doing, paying dividends. We also want to be attractive for investors who are interested in investing in a continuously dividend-paying company. Our dividend yield, of course, will change depending on where the stock price is. So that's our priority: sustainable and continuous dividend payout. But let's go back to the figures and let me get some water because, of course, these figures are challenging. The current malls' occupancy is 94.5%.
Well, in 2027, we want to get up to 98%. During our first call, I mentioned our contract duration, particularly when it comes to break options the tenants received that are a legacy of the COVID era, and they're also dependent on an inflation that at that time was a double-digit inflation. Back then, our retailers told us, "You know, I want to keep staying, but I want to have a payout, a break option." Well, what we will try and do will be to make the WALB, the W-A-L-B, longer. So we will maintain a break option, but we want to make it as long as possible. And that's not a trivial feat because having the break option rolling, well, it will take a lot of work on our side. Well, I should take a sip of water again, but I will not.
The net rental income on a like-for-like basis, well, our objective is to grow by 16%, which means a 5.2% CAGR. EBITDA 98. But if you pay attention to the chart, again, if you look at the EBITDA of operations, it will entail a 16% growth from EUR 101 million end of 2024. You have to strip off the effects due to the disposals that will take place. In 2024, you have three months and 23 days of the food portfolio that has been disposed of on April 23rd. So as you can see, this is organic growth, 16% organic growth. And with the revenues increase and also the reduction of debt and the reduction of the cost of debt, we will get to an FFO growing by 41%. On November 7th, I confirmed the guidance at EUR 34 million.
We will be at EUR 48 million FFOs likewise. But all of this takes investments. If you want to attract good names, good brands, you have to change your malls' layouts. You must create what is called the shell and core, meaning the shell and core. So the shop will have this and that fitting. So it's a total of EUR 50 million. And this is both commercial investments, ESG investments, and maintenance. Extraordinary maintenance of our buildings, which means 0.50% every year out of the total portfolio value. If you own a house or a flat, you know that every year you spend much more than 0.50% of the total value of your home. So you see, we have been painstakingly looking at where this EUR 50 million will be spent. The total loan-to-value will be 40%, which makes us feel very comfortable as our peers.
Well, there are some few names that are fairing slightly better. Some of them are at 41, 42, 43. But this Loan-to-Value will make everyone sleep nice at night. Well, we all have a priority, a clear priority. You know that IGD has a EUR 570 million maturity in 2027. That's our maturity wall because of the investments that we did in 2022, 2023. Well, we had some time ahead of us to think it through, but we decided to make it our own priority, our first priority. We wanted to reduce this 2027 cliff.
We wanted to extend the maturity because this will help us look at the world with more rosy lenses. We also want to reduce the cost of debt. The most recent transactions, for example, the 2023 bond, were quite expensive. But, of course, there is the banking sector, but there are also other opportunities, market transactions.
I think that what happened last week was very important. Our investment-grade rating has been confirmed. This investment-grade rating allows us to finance ourselves as an investment-grade company with the banking sector. At the same time, if the conditions are good, we will grasp the opportunities and go to the market to reduce our cost of debt. We also want to reduce our net financial position. For the first time, IGD comes to you with a business plan, which includes a number of disposals. I'm highly confident. I was chit-chatting with some of you over coffee. I've spent the weekend in Romania, and the market is highly dynamic. It's a non-institutional market. It's a family office market mainly, and they're keen on individual assets. So it'll take a lot of work.
I came back on Monday morning on Wizz Air from Bucharest, and it was so I was exhausted, very tired. But I felt that there was a lot of appetite for this type of assets. And I'll give you some more flavor in a minute. Now, so I want to extend the maturity walls. I want to lengthen our duration. The first objective is to pay back our two bonds. One, it's 120. The other one, 58. As you know, the financial terms of those two bonds are quite burdensome, and the contract structure is also difficult. So I would say that we want to pay out dividends, which means that, of course, those two bonds must disappear. So now we have 1.1 billion EUR of unencumbered assets. So we are working with banks, with a pool of banks, quite a big number of banks, including Intesa Sanpaolo.
Intesa Sanpaolo is the lead bank, and we are working hard with them. I mean, this is a long journey. These are complex transactions under different points of view. But today, I'm here to say that the refinancing, which means early repayment of the bond, is something absolutely in our cards. I'm quite confident that we'll be able to do it. Well, with these two transactions, refinancing and also repayment of the bonds, we will be able to extend the maturities, and we will be able to reduce our debt position. And then disposals, this will take care of our LTV. I said that we will keep a sharp eye on the market. If we see opportunities, favorable tools, why not? Disposals. Well, Romania, as you know, and you've asked about it several times, you have been telling us this for a long period of time.
I said it in the past, but in this plan, it's written there, black and white. We will have a gradual disposal project, 70 million EUR in three years. I'm absolutely confident that by selling our assets one by one, we will get there to the 70 million EUR. And this will have two benefits. First of all, we will get money to reduce our debt. We will be able to reduce the costs, the running costs of the Romanian assets, even the headquarters in Romania, the overhead cost, because we have branch managers. So by selling the asset, we will also have to pay the headcounts. And then we will develop three major areas in Livorno. On September the 3rd, Primark opened in Livorno, and this opening really doubled the footfalls. And we are super happy.
We were able to sell 115 flats at a 30% higher price compared to the average Livorno residential price. I love Bricks and Mortar. I loved Bricks. Having a hotel, having additional residential spaces would be ideal. So it's not easy for me to sell it. We have started the activities and the works in the harbor. Some of the piers are complete. So that's a very interesting area. I love it. But unfortunately, we cannot afford to invest additional money on this without an immediate return. So these are the three areas we will be working on. The projects, the permits are dating back to 2007. So we are asking for permit renewals. It's not easy. There are some areas we cannot do anything about it. For example, the Medicean wall. It's not easy to have a permit, but we're working hard on it.
I think that these 20 million EUR in these three areas is something we can easily reach. And then there are some bits and pieces, old assets that we acquired years and years ago worth some 10 million EUR with very low yields and returns. So with some value-add transactions, we will be able to include them in the disposal package, which means having embedded in our business plan another 100 million EUR worth of disposals. Let me go back to Romania very quickly. Romania is not a product for investors. We have one premium asset, which is fantastic. It's Ploiești. It's a large city, 30 minutes from Bucharest. It's close to the town hall. There are international brands involved, 40 million EUR at book value. And then we have medium-sized assets and minor assets. So it's not easy to one single player to interact with.
The premium asset would be for institutional investors with family offices, private investors, or maybe some other more structured investors. We could look at single assets. These are the Livorno areas. After we worked hard, I think this is a recognition. Among the global projects that will be presented at the MAPIC exhibition for the best urban regeneration project, we are among finalists. And we are together with Potsdamer Platz in Berlin. But being finalists is already a reason to be very proud. And we completed the sales of the different flats with the opening of Primark. We more than doubled our footfalls at the Officine Storiche Mall. And the three premium areas that are close to water, let's say, they are part of the disposal plan. Let's have a look at the core business. As I said before, up 16% is the target.
You probably are going to ask me, how are you going to get there? I'm going to get there because our idea is to actually interact with our tenants in a different way. Today, retail is moving fast, and there's a different need to communicate and to communicate in a different way. We want to cooperate with our tenants. Of course, they're paying a rent, but there are digital channels. There's co-marketing initiatives. There are a number of actions and activities that can be put on the table when drawing up a contract, a rental contract, or a lease contract with tenants to get to 48%, 98% occupancy. We have to attract very important brands. Our merchandising makes it means we're very fast already. IGD versus other companies versus other players. We have a strong point.
Our weak point is that we are small, but our strong point is that regionally, we have our people. They have my cell number, and every time there's a transaction at stake or an action at stake, in one second, we make the decision locally, and so we are constantly changing our merchandising mix to really seize the most appealing opportunities. We are testing new formats. We are working a lot with temporary stores as well and temporary formats. Before we take up a commitment, we wonder whether or not that specific activity is worth it, and then we have some specific areas that are zero rent, and we pay common fees, but we have to really enhance them, maybe changing the destination of use. Target is 2.5 WALB, 4.2 malls, and we still have eight hypermarkets with a very long contract.
And of course, as years go by, it will be reduced from 12.9 to 9.5. And that requires a lot of work. What we are doing with our leasing division, as we get contracts come in, we exclude, we rule out break options, and try and extend the contract duration. As to data, of course, this will be of paramount importance. Recently, as CNCC, the Association of Shopping Malls, we had an agreement with Confimprese Grouping or Pooling for 150 brands. We have management guidelines where we mutually commit to exchange data, footfalls, sales, you name it, and they tell us where they sell online. Omnichannel approach is of paramount importance.
But if you want to succeed in marketing, you have to be able to know that, for instance, in the Forlì store, what the catchment area is, where they see maybe the product in the store, and then they buy it online from home. This is very hard work, but it will be beneficial in the end to get up to 98% occupancy, 7,600 square meters of non-attractive areas that have to be improved. We are changing them, moving from, for instance, sales areas to areas devoted to logistics. Sometimes we have players who have last-mile logistics facilities, and they have expressed their interest a number of times, especially for online operators and logistics operators. So really valuing, enhancing these 600 meters, even with a very low rent, but of course, sharing expenses that would already improve our net rental income.
So we want to be innovators, and we are more advanced versus other groups. We have the lead on them because we are a small group, lean, fast, fast-moving. And we want to turn these areas, these spaces, be it sales spaces for on or offline sales. We want to have an ESG vision, a long-term ESG vision. And I'll tell you more about it in a minute. We want to offer services to third parties. We talk about high-added value retail services. With disposals, we retained the facility management of certain assets, no investments required, and high profitability or very interesting profitability. And we launched partnerships with our tenants to have common co-marketing initiatives. Many are very responsive. Kiko, for instance, I'm thinking of many other brands who really want to work with us, not just to have a landlord-tenant contract.
But the real partnership starts from the day after the contract is signed. And we want to further strengthen our digital tools and communication tools. So we want to be a partner for our tenants, not just renting out spaces, but together with, as I said, with our retailers, we want to come up with project programs. We want to offer a range of opportunities to them. Yesterday, we were at the Centro Sarca with our board meeting. Top right, you see the typical example of what we are going to do. There's a very big LED wall. We have an app called MySarca. And Prodi is giving us exclusive products just for those who have downloaded the MySarca app, receiving a special discount. This is the future of commerce, of sales. If I don't offer anything interesting to my tenants, it could be VIP clients. Why are they VIPs?
Because they have our app. And unless we do something like this, we don't get anywhere. If you think you can sell without providing an experience or a service, otherwise people would go and buy a TV set online rather than from the store. And Zara and the Inditex textile group told us, told the clients, "If you buy online, you have to pay transportation and returns." In 2020, we all wanted to buy. We used to buy 10 different products, and then we would send back nine or all of them, 10 of them. And people started to change labels on the—and they would be cheating, but they would be discovered straight away. And they were wearing those clothes on Saturday night at the disco, and then they would return it on the Monday. So they would be found out.
Retailers have extra costs on online, so they have to somehow favor physical sales over online sales. We're offering apps. We're offering a number of services, as I said. It could be Tesla. Tesla is very fashionable. So we have these Tesla charging stations, and we have whatever can help wellness, restaurants, and catering is doing very well. You saw the data we disclosed. And then increased digitalization. For us, this is a must. We have two apps at the time. One, to talk to the shopping mall, well, the shopping mall manager talks to the tenant. You get turnovers. You have a much more modern communication between the shopping mall manager and the store manager to actually improve the visitor's experience. And also, we are very much working. We already have a CRM system. We have to further strengthen customer profiling. We have a very challenging target.
10% of catchment area contacts being fully profiled within our CRM by 2027. And we want this 10% to come to us every day because we will give them special opportunities, well-targeted offers because they were profiled. We need to use technology to improve our one-to-one relation with clients and customers. And we have to become one of a kind when it comes to relations with visitors and tenants. We have two master lease contracts. One expires in 2026 and the other one in 2027. In our accounts, they weigh a lot because it's a fair value impairment, mathematical fair value impairment. We have to somehow cancel them. We had three. One was. There was a resolution that was removed in 2021. We're retaining all services for the owner of the building. We have maintenance of asset property, facility, marketing, everything included.
We have Juice Fund and Food Fund with Savills SGR and the other one with Prelios SGR. Those are assets owned by third parties, but they are providing a very good performance. We were very much appreciated, meaning our service was very much appreciated. What can we offer to third parties? We offer a facility management that is all in-house. We have marketing. We have facility management. We have technical setups to do pilotage project and construction. We do so across the board. We manage everything directly across the board. We will be able to go to third parties and offer those services. Numbers, meaning net profitability is EUR 2 million by 2027 with zero investment and a lot of opportunities to grasp. Investments. We mentioned them. We will keep working on the digital. We will also invest in ESG-specific operations.
Climate change is, of course, a very topical issue. These are some examples of what we do with our assets, proving our passion for them. If you take the Livorno Primark, we transformed a garage area into an inventory area so that they could better manage their floors. We transformed another area into a gym in Bologna. Then we also did some remodeling of our hypermarkets. Hypermarkets now tend to be smaller, like medium size. And this proves the total flexibility of our assets. We've set some challenging targets. I think IGD is a one-off situation. We buy energy, green certificate energy, so renewable energy for the entire group. And this is possible because we totally manage our assets. And therefore, we have group-level purchasing contracts. That's why we can say that 94%-95% of the energy we buy comes from renewable sources. Photovoltaic, we have some 12 systems.
We're also working hard with the artificial intelligence. Artificial intelligence enables us to really optimize consumptions depending on outside temperature, light. The AI system enables us to reduce our consumption. Of course, we will have to add new recharging station for EV vehicles. Challenging targets, reduce direct CO2 emissions by 40% and reduce our Scope 3 emissions by 20%. Scope 3 is indirect emissions that are somehow connected to us. These are challenging targets, and we can do, we can reach them only by involving our tenants and making sure our tenants have implemented best practices also when it comes to energy. We also want to reduce risks along the value chain. We want to involve our partners and our stakeholders all around. We've launched two policies.
One for the supply chain, which means that our suppliers must abide by this policy, which is mainly about human rights, safety in the workplace, etc., waste management, etc. And then with our tenants, you've got good tenants who, for example, Inditex, but many more are very keen themselves. And in our contracts, we want our policy to be a binding part of the contract. And we also want to develop a true diversity and inclusion policy. I told my people, "Please do not give me random numbers like 50-50, 50 men, 50 women." I think our policy will really show that gender equality is strong and paramount at all levels. And let me also take this opportunity to say that there are two main players for this business plan. The first one is Claudia Contarini.
She has been listening to you for many months, and she's taken your suggestions, and she has brought them to me, and then digital and innovation, Laura Poggi. We decided to give her a nickname last night, which is Madame 16%. Congratulations, Laura. You deserve the nickname, so this business plan proves that there are many women involved in the company. There are lots of female voices behind a business plan. We mentioned climate change. This is something that really impacted us. I lived through the Emilia-Romagna and Central Italy earthquake and then the floods in Emilia-Romagna, including the Cesena flood in May 2023. I've lived through all of them. Since 2016, after the earthquake that really impacted three major assets, we decided to have an insurance coverage where we waive on the minimum floor.
But at the end, the total value, I mean, the 100% insurance value is the reconstruction as new for 100% of the asset. This is not normal. This is not a risk all insurance companies accept, but we managed to get there. We've also included some timely warning systems. And then again, in May 2023, I was at MAPIC Italy here in Milan. And then in 10 minutes, I was at MAPIC here in Milan. And in 10 minutes, that's Cesena, Lungo Savio. And then in 10 minutes, we saw what happened also in Valencia. The underground floor got flooded, and the water got to the first floor. And it took us five minutes. The manager sent out an alarm text saying, "I'm evacuating." And I said, "Yes, please do." And this led to no victim, no incident. All the cars that were parked were out in five minutes.
Having an alarm system such as the one we have is so crucial, particularly with the current climate situation. We are fully equipped to manage it. Then again, we had an earthquake in 2016. Again, this is something the insurance company fully appreciated. We decided to make some renovation works. You can see, for example, the connection, the pillars and the floors. This is across the board for all assets. All our assets are earthquake-proofed. EUR 50 million in three years. That's our investment pipeline. Of course, we will work hard. EUR 16 million for commercial services, EUR 11 million climate change, energy. Then you see zero 50. I mentioned that earlier. As I said, we want to grow. For many years, we were forced to dispose of assets, EBITDA, and footfalls. That's the past. Now we want to grow.
This is a standalone growth plan. And we are confident on the good results. Of course, we have to manage some challenges. In the past, those challenges were against us. The cost of debt, some complex contract terms. That's over our shoulders. That's the past. We want to grow. We want to make our investors happy. Not just a dividend peak. We want a significant total return. And the total return happens only if you manage well your operations. So we will look at the big, including Klépier, all the big names. And we want to get their occupancy levels. We also want to have a better LTV. And I think that the new corporate organization and also the more favorable environment will help us. Well, the chairman mentioned it, and I want to repeat it. We've changed our governance model. There is a new governance.
This is something we absolutely wanted. When they asked me to become the CEO of the company, and I said, "I want to understand what the new governance is going to be." And the new strategic committee we've created is a fantastic support. I feel very comfortable with it. And the board, the board is absolutely united. We have met several times in 2024 since April. We have met more often in the last few months than we did in a whole year in the past. The financial profile position is changing. I mean, it's a journey that will require some time. We're talking about EUR 1.1 billion worth of assets. And it's many assets. It's not one single asset. So of course, the banking or the banks are looking at the portfolio with all the due caution.
But our commitment, the fantastic team we have, the strong board, and even myself, I guess you can feel my energy. I'm always up and running 24 hours a day, seven days a week. And so these targets are achievable. Absolutely. Thank you to all. And of course, I'm ready to answer your questions. Yeah, we need to allow.
So we can now open the Q&A session. There is a colleague coming to you with the microphone. And of course, we also get questions from Zoom. Simonetta Chiodi from Mediobanca.
I've got a couple of questions. The first one has to do with debt. So what's your cost of debt hypothesis in your FFO target? Second question, dividends. You said you want to go back to pay out dividends. So what should we expect in terms of dividend policy? Is the dividend payout included in your LTV?
Thank you for the question. So I said it. Today, our priority is to extend the maturity wall. We will immediately see a reduction in the cost of debt. You know that the EUR 300 million in the bond cost almost 8% rather than 7.8%. So we're talking about 300 basis points plus the spread. So we are at 6%, and it's going to be even lower in the long term. We're talking about variable rates. So we think the cost is going down. We have calculated the cost of debt using different curves. So the average cost is 6%. If things improve, we can even get better figures. So from this point of view, so that's as far as it. What about the other question? Oh, okay. Yes, it was about dividends, our dividend policy. Well, I said it before.
I do not want to tie myself to a percentage over the FFO. So we have to see how much FFO we get. And we also want to look at the stock price. And of course, the dividend we're thinking is a dividend we will be able to pay out. We don't want to have a fixed dividend policy. The market is quick, is volatile. We've done a few simulations. So the dividend is embedded in the figures you saw in the targets we mentioned. And then, as SIIQ, there is a fixed dividend. You know very much that 70% of the SIIQ earnings, meaning the exempt earnings, must be paid out over the years. We had lots of impairments. And despite our FFO was significant, impairments led to some losses. So we have three main things. The first one is the compulsory, mandatory dividend payout.
Provided we won't have major impairments, and you've seen our FFO target. Then we will see if we get to the EUR 48 million, we will see what the dividend with no impairments, which is a net earning, and then the mandatory dividend to be paid out. And all the rest, you have a discretionary basis. If the earning is lower, 70% won't be representative. It will very much depend on where the stock price is. The higher it goes, the more we will have to pay out, the more we have to please our investors. But we want to be cautious. I've listened to you over the month. I understand that there is a compulsory, mandatory dividend payout. And of course, there is a very favorable tax profile provided you have dividend. So that's the situation.
Good morning, Banca Akros.
Thank you very much. Thank you for the presentation, but I've got a couple of questions. The first question, the Loan-to-Value target at 27%, is this an optimal capital structure, or do you think that in the medium-long term, you will get even lower than that and having some more leverage? That is the first question. Second question on the dividend. I understand that you have the SIIQ legislation. How flexible can you be in paying the dividends in order to prevent volatility one year to the next? The third question on the market, the retail market, see the expansion of small and medium-sized businesses, particularly in the food segment. Is this a challenge for your business model, which is mainly concentrating on malls?
And also, can you give me an example of a mall where with a change in the tenant mix and in the merchandising, you've been able to increase your rental income?
Well, thank you. Right now, the 40% LTV is a good benchmark. Also, if we compare us to similar companies, so we think this 40% is quite comfortable. During expansive market, you might even get higher than 40% and going much lower than 40%. We don't think that's absolutely efficient. I think that 40 is a good level. Klépier is slightly below 40. I mean, if you get to 38, that's fine. But going down to 20 or 30, I don't think that's efficient. I don't think everything should be equity. And this provided that the market conditions are interesting. Being above 40%, well, it very much depends on the market situation.
What I can say today, that's our objective. That's our target, 40%. And until we get there, we won't do any asset rotation. Second question, dividend and the SIIQ legislation. Well, in the past, well, I don't understand if the appreciation is that important. If you appreciate your assets, of course, the LTV goes down, but then you have to make sure that those assets can be on the market. So unless we have a major appreciation, the earnings is very close to the FFO. Then if you strip out non-exempt margins, for example, service margins, i.e., the EUR 2 million I mentioned before, well, those EUR 2 million are taxed. That's not a part of the mandatory dividends. So it is part of the group FFO, but it does not contribute to the dividend. So I do not see major changes. And again, let me repeat it.
Based on what we're doing right now, I love to listen to you. I don't want to tie myself to rigid policy. We will see how much money we have year after year. We will look at the mandatory dividend payout. We will look at the stock price, and having seen all these things, together with the board, we will suggest continuous and sustainable dividends. Final question, retail. I said it during the presentation. Major hypermarkets, big hypermarkets are becoming obsolete. Hypermarkets are becoming smaller. In some areas, in some geographies, reducing the hypermarket's surface was not a success story. You have hypermarkets with food and non-food products, and those hypermarkets continue attracting people. However, currently, the most profitable model is 4,500 sales surface, which is a good equilibrium. It attracts more than the small surfaces, 1,000, 1,500.
You asked for an example, and actually, this is an example we mentioned during our board yesterday. In Conegliano Veneto, we reduced a hypermarket surface down to 4,000 square meters, a lot of food, some accessories, and then opposite, Aldi opened a store. Well, our little hypermarket keeps growing in terms of sales and in terms of margins, despite Aldi opening next door, and this proves that in that catchment area, clients ask for a wide product mix, so the reduction of the surface of the hypermarket, the change of the brand mix, we now have Inditex, Stradivarius, we were able to grow in terms of rent, food, footfalls, and sales, but you have to be careful. I mentioned Livorno. Livorno, it was at 1.5-1.6 million footfalls in 2023 up until September. Now we are at the 3 million. We invested in order, for example, to have Primark.
We know that having attractive brands is expensive. I do not believe so much in food. Unless you have offices nearby with people needing to have lunch break, for example, or unless you have entertainment, for example, cinemas. In Livorno, we have Wappy, which is a funny entertainment area. You can play bowling. You can play soccer, five-people soccer. This is for everyone, not just for young people. Those types of entertainment areas attract food. You really have to painstakingly analyze your catchment area. You can have food if you have a good catchment area. Small or medium-high, or low or medium-high. In Conegliano, it's medium-high. That's quite typical in the Veneto region. For many of us, Zara is a cheap brand. But for the overall population, Zara is medium, is higher than Primark, higher than Piazza Italia, for example.
But there are other catchment areas where low brands play out. For example, in Sarca, Pepco, well, Pepco is a Polish brand, and they're selling extraordinarily well. There are Deichmann as footwear for footwear, and they sell a lot. It very much depends on your catchment areas. I'm quite lucky with my people and my company. 30 shopping malls, 30 store managers, or shopping mall managers. And they are my ears and eyes. I get a detailed report on a monthly basis, footfalls, product mix, marketing activities, and initiatives. So when I was the director of the network, I always asked for those reports. And then when I became CEO, they asked me, "Do you still want to see those reports?" And of course, I said, "Yes, I do." And I spent a long weekend looking at those reports. And they find fantastic information.
For example, marketing initiatives describing what's required for that catchment areas. The report will say, "For this catchment area, you need this initiative." I meet often with Laura, even late at night. These are the things we talk about. In Conegliano, we must pay some good money, for example, for Zara. That's what's needed in Conegliano. In other catchment areas, we have to go stronger on food. Right now, there are some food brands with some good private equity funds, which are developing a lot. Sometimes we have to slow down them because before opening a food corner, we really must look at the catchment areas. We need residential areas. We need offices. There are some areas where even eating a pizza and a Coke will cost you EUR 18.
And in the same catchment areas, you can go to a simple osteria or trattoria, which will cost you even less than EUR 18. Take Southern Italy. There are areas in Southern Italy that having quick restaurants will be an expensive option. In Southern Italy, you go to any bar and have what they call an arancina, which is a fried rice bowl for EUR 2. So in those areas, having a restaurant in the mall is not a good idea. So that's a lot of things to do. For me, going to the malls and looking at them, analyzing them is fun, is what I love doing. I look at the leasing structure. So now we have a different way of working.
We used to have a steering direction with five people. Now we have committees. We have one committee, which is called Business Operation. So it's me, Laura, Gianluca. We also have the top managers. From those meetings, you always come up with a new idea, with a fun idea. For example, we want to listen to everyone's advice. It's not just ticking boxes. It's a different way of working to answer questions such as you asked about the tenant mix, about the merchandising mix. It's a mall-by-mall, asset-by-asset analysis approach. Good morning. Good morning. Good afternoon.
Good morning. Thank you. Intermonte. I have a couple of questions on your assumptions. For example, revenues. You were mentioning a 16% growth. Could you break it down? You mentioned occupancy. But what about upside? Some breakdown. Then portfolio valuations. What are your assumptions? Can you tell me something on CapEx? Do you think these CapEx are embedded in the valuations? I've got a difficult question, probably, on the two bonds refinancing. You have good assumptions there, good expectations. What about the timeline? Anything you can share with us? Short-term, are you considering paying the dividend in 2024, being paid in 2025?
So that's the question. These are my. Oh, I'm happy that you stopped. Thank you, Federico, anyway. Oh, talking about revenues, we considered slightly less than 2% in 2025, and then again, 2% in 2026, 2027. But that's not across the board. That's not for all the assets. Well, there are situations where we're not including the ISTAT increase. So in the 5-2% CAGR, you have embedded 1% inflation, and 4% is above inflation. And this is because the new contracts. So let's say if we sign a contract today in November, the first ISTAT increase will be in January 2026. So we have one year at the same level.
For all our 1,400 contracts, we've looked at them one by one. On average, it's 1%. All the rest is organic growth. Then refinancing, I would say first quarter, 2025. Of course, the sooner we close it, the sooner we will have the money. We want to go to the General Assembly in March with a clear dividend proposal for 2024. I think we will be able to do it. As far as the net rental income, you have the ISTAT growth, but we will pay a close look at the costs. On the one side, you have revenues growing, but then most of the margins depend on the cost reductions. There are two main items. The first one being the occupancy. The owner will not pay the vacant costs.
The new contracts where we will limit the number of contracts with a maximum cap for the tenant. So even the big names have accepted the idea that inflation and the cost of energies are not rigid and fixed. In the past, if your cap was at EUR 50 per sq m for condominium expenses, when energy doubled, those extra costs were paid by us. Now, this applies to ordinary expenses. But then when it comes to utilities, the tenants know that if the energy price goes up, they will have to pay for it. I mentioned the Conegliano example. We have done a very precise, detailed asset-by-asset analysis, and we are expecting some good organic growth. We have the Maremà Grosseto mall where we have Zara and other nice brands, Stradivarius, Bershka. We have Decathlon. We have a gym.
We have a nice supermarket which had a nice size, and whenever the contracts reach their maturity, we always have a nice upside. In Ravenna, we are working hard on re-commercialization with some upside expectations. Yesterday, as I said, we were at the Centro Sarca where we have some value-add work to do. There are some limitations in terms of the sales area, and we are getting rid of those limitations, so if we replace the current services with a textile company or a footwear company, there will be some nice upside, and then very soon, we will open a supermarket. It used to be in Ipercoop. It has been sold to a player who is a leader in Campania, and again, the assumption is that our revenues will grow nicely there, so again, it's an asset-by-asset approach. Impairments.
Again, impairments have been done painstakingly because there are assets with some nice appreciation. Other assets will remain flat even after paying the CapEx. And then we have some less attractive assets where there will be some slight impairments. So I mentioned the 40, and this 40 includes everything. And if tomorrow interest rates go up, if there is a world war, God forbid, that's our commitment. We want to get there to that LTV, of course, subject to AB. But that's our commitment, 40 LTV. And I'm saying we won't have major appreciations, but we will not have major impairments as it was the case in the past, which was quite detrimental to our LTV.
I have a question again from Intesa Sanpaolo, Arianna. So you were mentioning third-party asset management. Is the current margins replicable? Is this something you're happy with?
Yes, we are happy with the margins. And actually, we have been nicely surprised. There are two different streams of revenues. The first stream is the sales, the turnover of these assets. And then we have a variable part, which is the leasing part. For example, in Chioggia, which went to the Food Fund, we had some three renovations there. And there, we invoiced some EUR 90,000. And that was totally unexpected, but it was the result of our activities. So this is something I'd like to see, and it's included in the two million margins. Two master leases will be stopped, Fondi del Corallo in Livorno, and another one in Bologna. There, we want to become the service provider of the owners. So the master lease will be stopped, but we will stay there. And this is because of the relationships we have with the tenants.
Those are very good contracts margin-wise. And then, unlike other competitors, which usually have an annual contract, on our assets, the consortia entrust us with the management. Well, I don't know whether you know that, but the managers of the shopping malls, the manager, the assistant, the area managers, I mean, their wages are paid by IGD, but IGD has a contract with the management consortia, which includes the management mandate. So 50% of our employees are paid by the tenants with the condominium expenses. So in our properties, we have the shopping center management. And you have the area manager, the network manager, the director, and the assistant. We also have some more evolved services. For example, Savills on the Juice Fund, and then the Lugo Hypermarket in Romagna that was hit by the flood.
IGD has taken care of the reconstruction, and that was a variable cost, and it was very profitable. So when I mention service to third parties, these are the activities I'm thinking about. It's leasing activity. It's asset and facility management activities, meaning the most added value type of services. Clients love dealing with people that want to create value and have their own mind frame. So this is something we are really working on. And then as far as the leasing business is concerned, we want to increase the assets under management ratio because this will enable us to strengthen our relationships. We want to have more people to have a conversation with. So yes, it's an economic benefit because zero investment, lots of margins, but it's also networking synergies, better relationships with the tenants, with the retailers on a bigger portfolio. Any other question?
Good morning. Giuseppe Grimaldi, BNP Paribas.
I have a question which relates to operating performance, also with an eye on the ongoing negotiation. So you're basically going to the tenants. You are extending your contract. You are trying to remove the break option. What's the reaction? Any difference vis-à-vis the tenants depending on their merchandising mix?
These are definitely demanding negotiations. What we are trying to do is to renegotiate the contract by adding and offering them something more. For example, LED walls. You saw that on the picture. So what we're telling them is, "I'm investing in your space. I'm offering you advertisements on my total LED walls. You can use those ads to advertise your promotions or your offers. That's an investment for us. On your side, we want you to stay longer.
We want this marriage to last longer." So of course, we're not calling all of them one by one to extend the break option. But whenever there is the opportunity, maybe the contract is expiring, or maybe an opportunity arises, we suggest the change in the break option. Rotation is not bad, to be honest. Even in the past, we've seen that rotations gave rise to nice opportunities. In the notorious or famous monthly reports, sometimes we learn that there are stores that have been the same for 12 years. People that are happy keep renewing. But if you've restyled your malls, if you have been able to attract beautiful, attractive brands, those stores that have remained unchanged for 12 years will struggle. So if they decide to move out, sometimes it's beneficial for everyone. So rotation is not bad per se.
There are some examples of people that have been there forever and that are struggling because they're outdated. We do have brands that are dominant in their catchment areas. Take, for example, Centro Borgo. It's 30 years old. They have been there since day one. And of course, the manager would like to see a restyling from some tenants, and we do our best to nudge them to go to restyling. So it very much depends. However, our commitment is to have a longer WALB, longer than it was in March. We were at 1.78. We're now at 1.9. So if we improve something every month, we will get to the target I mentioned.
There is one question from the live WebEx. Should the refinancing transaction with banks be successful? Will you continue with the bond, or do you already have a call for May 25?
The bond contract or the bond terms already envisage the possibility of an early repayment. That's there. This happened in April after the dismissal of April the 23rd. We informed that we wanted to go for an early repayment of the bond. Indeed, that happened in November 2023. The bond went down to EUR 220 million. In case of a refinancing, this is what's going to happen in terms of early repayment. As I mentioned several times, over time, should conditions arise, well, we will go back to the market for similar transactions or deals. Any other question?
Let me remind all of you who are listening via streaming that you can also ask questions. Would you mind describing the macroeconomic picture in terms of consumptions? What are your assumptions in terms of consumptions and also the latest?
Yes. First of all, September and October went really, really well. I understand why people might be worried about consumptions. There is a lot of uncertainty. This is not a time when people see consumptions going up exponentially. However, in July I mean, in July, it is true that the sales season was not fantastic. But then in September, we did up 7%-8% month after month. That was good. That was nice. In terms of footfalls and in terms of sales, we think that we will have the same growth level of the Eurostat level, 2%. So we think inflation is 2%. Consumption will grow 2%. Then, of course, there are lots of differences when it comes to consumption. For example, electronics, it was going very well in the past, and now it's slowing down. However, we thought electronics was gone forever.
But then if we look at data from September and October, electronics went up. Same for home goods. Consumptions are growing in the beauty and personal care space. If you look at fragrances shops, extraordinary results that somehow are quite difficult to justify. And then, again, consumption. It's not easy to generalize, but what we must do is really grasp and intercept the most performing merchandising products. October went well. Footfalls are back, as I said. People are coming back to the malls. That's crucial. It's very important to be completely over the pandemic area when, in terms of footfalls, we're back to the 2019 levels. And in terms of sales, I think we are at the same pace as inflation. Any other question?
Again, I remind you that you can ask your question from the webcast. I don't see any question from the webcast. I'll give it one, two more minutes to see if anyone wants to put forth a question from the WebEx. There are no questions coming in, so thanks. We have a lunch break ready for 12 o'clock. There is time for a cigarette, and then we will meet at lunch. Thank you. Thank you.