Okay, good morning, everybody. I hope everybody hears us loud and clear. Welcome to the annual results presentation for 2022, 2023, sorry. That starts well. Starting, first of all, with some practical comments. We will walk you through a presentation as a first part of this conference, and then there will be time available for a Q&A after the presentation. The presentation itself will be based on a selected number of slides from the roadshow slide deck. The full slide deck is available on the website as of now. So I think that we can start without further ado, and I'll let Ingrid start with commenting on the 2023 results. Ingrid, the floor is yours.
So good morning. Probably you already had the chance to have a look on our press release that was issued this morning, but we will quickly go through the income statement. So we reported EPRA earnings of EUR 290 million, an increase of 21% compared to the previous year. When you take into account the increased number of shares following the capital increase, this leads to an EPRA earnings per share of EUR 5.02 compared to the 4.76 of previous year. So rental income was up with 15%. The EBIT margin slightly improved from 84.6% towards 84.9%, an increase of 16% in the operating results.
Then there was an increase in the financial charges, taking into account the increased interest rates, but the average cost of debt remained at a very decent level of 1.9%. Then we have the current taxes, where we have some unusual movements this year, related to the FBI status in the Netherlands. So we received a refund for the period 2016 to 2021, and this was reflecting an amount of EUR 9 million. On top of that, also for 2023, no current taxes were booked in the Dutch entities. As most of you are aware, this regime is expected to disappear from January 1, 2025. Then we start including the non-cash elements.
The most important one is the changes in fair value of the investment properties, -EUR 143 million. On a like-for-like basis, the investment properties lost 1.9%. We saw the most significant decreases in fair value occurring in the German and the Swedish portfolio, but also noticed a positive fair value change in the UK on the back of the strong rent cover of the UK operators. Then there is a decrease in the mark-to-market of the financial derivatives, so the hedging instruments, -EUR 50 million, related to the decrease of the long-term interest rates. We booked a goodwill impairment, so it's the goodwill that is outstanding on the shares of Hoivatilat.
The book, the goodwill impairment is related to the increased average cost of capital, and there was a deferred tax income of EUR 24 million related to the FBI regime that will lead to a restating of the tax base for the Dutch assets. So that leads to a net result of EUR 24 million, or on a per share basis, 0.56 EUR. On this slide, you can see the increase in the rental income, +15% on a year-on-year basis. So the most significant contributions in the increase of the rental income are related to the acquisitions and deliveries, mainly taking place in Finland and in Ireland. And there's also the impact of the indexation. On a like-for-like basis, the indexation represents 5.6% in group currency. So this you can see more into detail on this slide.
So here you can see the increase in rental income, so the 15% split out by country, but also the like-for-like calculation by country. For each of the countries, the number is presented in the local currencies, and then at the end, we have the group currency, the 5.2% increase in like-for-like rental income, which can be split, like I said before, into 5.6% regarding rent indexations, 0.1% rent renegotiations, and -0.5% related to the exchange rate differences. There are 2 countries, Germany and the UK, where there are caps in place on the indexation. Then we have the roll forward of the EPRA earnings, the increase of 21%, mainly supported by the increase of rental income of EUR 41 million.
Operating costs went up with the increase on the portfolio side, but we were able to slightly improve the EBIT margin. Then we have the in equity impact of the financial charges, and then a little bit of an unusual movement in the taxes, +EUR 13 million compared to the previous year, explained by the EUR 9 million one-off refund and also the current taxes that were applicable in 2022 in the Dutch entities, but did not occur in 2023, which is representing an amount of more or less EUR 4.5 million... Moving over to the balance sheet. So we are pleased that we can say that the debt-to-asset ratio at the end of the year is below 40%, so 39.7%.
This is well within the financial policy that we have set up, where we aim to have a debt-to-asset ratio around 40%, with a maximum of 45%. Theoretically speaking, this would mean that we could do additional investments for almost EUR 600 million before reaching the 45%, or we could absorb negative portfolio valuation of -12% before we would have hit the 45% threshold. This is actually something that you can see on the next slide. So this slide is giving an estimate on how the DTA will evolve in the course of 2024. It's the dark blue line. This is without taking any negative portfolio valuations into account, but it does take into account the execution of the committed pipeline.
You can see in that base scenario, that we are expecting that by year-end, the debt-to-asset ratio will be slightly below 41%. We did some sensitivity testings, assuming that for the coming quarters, first of all, there would be a negative valuation of -0.5%. In total, the portfolio would lose EUR 120 million. We had some scenarios which are a little bit more pessimistic, with more negative portfolio valuations. Main message is that we believe that the portfolio is resilient enough that even in a scenario where we would lose more than EUR 350 million of the portfolio value, by the end of 2024, the debt-to-asset ratio can stay well below the threshold of 45%. A couple of words on the credit facilities.
So we have a total financial debt outstanding at the end of December of EUR 2.2 billion. In the course of 2023, we were able to do a lot of refinancing with banks, in total, almost EUR 650 million. So we still have very good access to bank financing. On average, the credit spread that we is applicable on those refinances is around 150 basis points, and it's with a tenure between 3-6 years. So we can still show very strong financial KPIs. We have a BBB credit rating with a stable outlook with S&P, and we are very well within the thresholds that were set out to stay within the triple B space.
The interest cover ratio stands at 5.9 times, and the net debt to EBITDA ratio decreased towards 8.4 times. Average cost of debt at a very decent 1.9%, and in the meantime, out of all our financing, 50% is related to sustainability-linked KPIs. Almost all of the debt within the group is on an unsecured basis, so we have very little unencumbered assets that represent on approximately 4% of the total portfolio value. On the credit facilities, there is an average rate of debt maturity of 4.4 years. So at the end of December, we have EUR 911 million headroom available on committed credit lines to finance CapEx and liquidity needs. And this is even after deducting the replacement for the short-term commercial paper.
So in our business plan, when we take into account the execution of the committed pipeline, there are no financing needs that occur until the end of 2025. As you can see in the graph, in 2024, we have very little debt maturities to be handled, a total of EUR 170 million existing, mainly out of undrawn credit facilities. Then the interest rate hedging. At the end of December, 96%, the weighted average hedge maturity stands at 5.1 years. Also, in 2024 and 2025, we are expecting, that the unhedged portion of the, debt portfolio will be around 10%-15%. And then, starting from 2027, there is a decrease in the hedges that we have in place.
These hedges are actually the main contributors of keeping the average cost of debt around 1.9%, and also in the outlook for 2024, we are expecting that the average cost of debt will be around 2.2%. Our dividend policy. So in general, we distribute approximately 80% of the EPRA earnings of the company. For 2023, the announced dividend is 3.80 EUR per share, which represents a payout ratio of 76%. It also means that there are retained earnings that will stay within the company and reinforce the balance sheet. Currently, there is still a withholding tax, a reduced withholding tax of 15% that is applicable.
Following the Brexit, there is currently a transitional regime that makes that the UK assets are still included in the calculation of the 80% threshold of the portfolio in residential European healthcare real estate. This transitional regime will stay in place until the end of 2025. So we are expecting that until the end of 2025, the reduced withholding tax regime will be in place. Then, to summarize the outlook that we are giving for 2024. So there's an increase in rental income of 5%. We are expecting for the year 2024, rental income of EUR 330 million, and EPRA earnings of EUR 223 million, an increase of 1.5% compared to 2023.
Like I just explained, by the end of 2024, we are expecting that our DTA will be slightly below 41%, but this is not taking into account any assumptions on portfolio valuation changes. We still have the committed pipeline. In 2024, we are expecting that there will be deliveries of almost EUR 300 million out of this pipeline. And in our outlook, we also include an assumption on asset disposals of approximately EUR 100 million to take place. You can see on the slide the assumptions that we have made on the foreign exchange. And then maybe also a couple of words on the tax regime, because also in 2024, there will be some one-off elements, first of all, in the Netherlands.
So early February, we received the final tax assessments regarding 2022 in the Dutch entities, and therefore there will be a refund of EUR 4.2 million in 2024 in the books. And in 2024, we are expecting that we also will be in FBI, so no current taxes will occur in the Dutch entities. Then, since the first of February, the UK REIT regime came effective. So that means that in the UK, we will have one month of current taxes that will occur for the month of January, and also going forward on some limited activities that are out of scope of the UK REIT regime. And then the first distribution from the UK REIT HoldCo will take place in 2025.
There will be a net withholding tax on those dividend distributions of 15%, but this will occur for the first time in 2025. So in 2024, there is no assumption of withholding taxes on the dividend coming from the U.K. entities included in the outlook. This outlook is a bit of a conservative approach in the way that we have very limited assumptions on hypothetical investments. We have the execution of the committed pipeline, and we also assume that in Finland, Hoivatilat will continue the developments like we have seen in the past. This does not mean that we do not think there are possibilities for additional investment, but currently the probability is a little bit more or less to predict.
Stefaan will comment a little bit more on that during his presentation, and they are not included in the outlook so far. So this means that we are expecting EPRA EPS of EUR 4.70 per share for the full year 2024, with an increased dividend of EUR 3.90 per share. Handing over to Stefaan for the strategy.
Yeah. Okay. Thank you, Ingrid. What I will do is walk you through some of the main topics regarding the portfolio. Once again, this is not a full portfolio presentation. You will find that on the website. Maybe quickly starting with something that definitely will not come as a surprise, looking back at the investment activity of Aedifica over 2023. That was, of course, a quite limited activity given the market conditions in 2023, but mainly also pointing out here that we focused more on the Finnish market, where as a developer, we still see potential also in terms of... Well, both in terms of getting yields which are reflecting the cost of capital and allowing us to show some development margins in these projects. But that was the past.
Looking at the situation in terms of tenants, I think this is probably one of the main topics that we need to address nowadays, given that the market apparently still has some concerns about operator health. This is a slide that you know, showing our exposure to the operators. Maybe a couple of comments regarding some of the names that you see on the slide. Starting with Clariane, which is the new name of Korian, still our most important tenant in the portfolio, roughly 10%. With this being said, this is exposure toward the Belgian and the Dutch market. We only have one asset outside of these markets with Clariane, which is in Germany.
I guess everybody is well aware of the fact that Clariane announced that they are willing to sell the Dutch Belgian OpCo, as far as we can tell, but this is market gossip. They are working on it as we speak. Now, if they would be successful in doing this, our exposure to Clariane will drop to, I think, 0.3%, one asset in Germany. Another message in this regard is that we are absolutely happy with our Dutch Belgian Clariane portfolio, so that in itself, we do not consider it to be a risk at all. Then maybe one of the other names that needs some comments is Orpea. You will see that Orpea dropped from, I think, fourth or fifth position in the past, towards 3% now.
So our exposure was reduced on the back of the restructuring of the Belgian Orpea portfolio. You probably have read that we were able to sell the five assets in Brussels. That means that today, our Orpea exposure is roughly 1% in Belgium, 1% in the Netherlands and 1% in Germany. Once again, without anything specific to be mentioned, this portfolio is performing very well. Also, something worthwhile mentioning is that on the back of this restructuring of the Brussels Orpea portfolio, our total exposure to the Brussels market across the board, across tenants, is now down to one point—roughly 1.75%, so well below 2%. And actually, we also expect to see that percentage even declining further in 2024. So we think that we clearly de-risked the portfolio in that respect.
Then maybe one last comment: Specht Gruppe is now appearing as one of the, well, somewhat bigger tenants in our portfolio, roughly 3%. This is a result of the active management that we applied specifically in the German market, aiming at de-risking the German portfolio. What we did there is transfer some of the Ambia assets, which were ramping up assets towards Specht Gruppe, which in our view is first of all an operator showing a stronger balance sheet, so a better credit risk. But secondly, and even more importantly, also an operator with a much better embedded in the local market, so having better access to staffing and in a much better position to do the ramping up of these assets. So that was really a matter of proactively de-risking the portfolio.
So looking at this slide today, I think we can with some confidence say that we do believe that the portfolio is in quite good shape and actually, compared to the situation last year, de-risked. Then we made an effort to show to the market a bit more transparency regarding the operators and the underlying KPI of the operators. You know, you heard me explaining in the past that this requires a lot of effort in Europe. Not every country and not all operators are willing to be quite transparent, but we focus on occupancy, which is probably the indicator which is more easily to show to the market and to get the information from the operator.
So what you see on the slide, and this is the first time that we are showing such a slide, is the occupancy of the mature assets in the main countries of the portfolio. Mature assets, meaning assets that are under operations for at least two years. So we're not taking into account the assets under ramping up or at least for the first two years of, after delivery of these assets. Now, what you will see here, and we could go into full detail for each of the countries, but I'm not going to do that right now. And to be quite honest, the exact percentages that you see are in itself, not so important. The main message here is that we clearly see in all of the main countries, mature assets, showing occupancy well above 80%.
And I think you heard us explaining in the past that 80%, it is some sort of rule of thumb, but it is definitely, if you are above 80%, it's more or less the comfort zone where you need to be to show long-term profitability in this sector. And this is actually what we see throughout the portfolio. By the way, Finland is not on the slide because their operators are definitely not transparent, but we can refer to Attendo's reporting regarding their Finnish portfolio, and they are one of our main clients in Finland, and they're also talking about an 85% occupancy in Finland. Also important here, and perhaps the most important message, is the trend.
What we try to do is for these mature assets, based on the coverage that we have, and you see the percentages, is compare the situation end of September 2023 to end of September 2022, which is the like for like that you see. Also there you see an increased occupancy over that period. So the trend is clearly positive. Then switching to the next step, and once again, referring to what we have been telling you during these type of conferences in the past, what we try to do is monitor resident occupancy, but also what is happening with the revenue per resident, because that should go up for operators in order to compensate for the increased costs that they have been facing since 2022.
Now, first of all, starting with the one country where we do have almost full transparency, and where operators are performing extraordinarily well, and that is the UK. What we do see here is the evolution of the rent cover for the mature assets in our UK portfolio, both on a twelve-month period and on a quarterly basis. Now, if you look at September 2023, you will see an average rent cover for our UK portfolio, well over two. So that is actually quite exceptional in today's market, so a very healthy UK operator market. But talking then about continental Europe, I'm not going to repeat everything that we have been seeing in the recent months.
Just confirming that we do see positive trends also in terms of revenue per resident, which in most of the countries is going upwards. The country that was clearly lagging behind was Germany, and this is where today, for the first time, we can also be much more confident in saying that we do clearly see positive trends today also in the German market. And if I quickly walk you through a couple of things that are worthwhile flagging here. Now, first of all, and this is probably coming from almost all of the operators in our German portfolio, they told us that they are in the process or have finalized the process of renegotiating I-c osts, so investment costs, which basically are covering the building costs for them, and that they see increases of up to 25%, some cases even higher than 25%.
Now, this is anecdotal information, but it is something that we hear across the German portfolio. Clear increases of investment costs. Secondly, we hear from lots of German operators in our portfolio that they are also in the process of renegotiating care rates, and they are flagging that they expect to see significant increases also in terms of care rates. This has not been quantified yet, it's—I must confess, this is once again, anecdotal information, but these type of messages we didn't get from care operators until a couple of months ago. So we see both in terms of high costs and care rates, that apparently the German market is starting to react to the reality.
Three, in terms of staffing, and staffing issues, are quite important in the German market, also because the system is so strict, and if you do not comply, you immediately are confronted with admission bans. Now, there is a new Personnel Assessment Act in place in Germany since the summer of 2023, which could lead to the softening, a certain softening of the previous rigid quota for staffing. Meaning that it will be much more tailor-made for each of the individual care homes based on the care needs of the residents in a specific care home, and the available staffing in a specific care home.
Now, what the impact of this will be, remains to be seen, but it is a first start of, at least reducing the pressure of this staffing quota in the German market. It's once again, something that is quite new. And then maybe last but not least, is that we hear specifically from the somewhat larger operators in the German market and in our portfolio, is that they have been making huge efforts in terms of trying to deal with the administrative backlog of the local social welfare offices. Meaning they have been hiring themselves extra staff, to work more on the negotiations with these local social welfare offices, and to get finally, the payment of outstanding, claims they had. This has to do with the increase in the end.
Trying to summarize this quickly, as is related to the increased wages for German caretakers, which have led to higher rates that operators have to charge to their residents, and then residents that are not able to pay, having to switch from self-payer to social welfare payers. Now, the social welfare offices, they had a backlog in dealing with these requests, and what we now hear from German operators is that they are working on the backlog and that they see the money coming through, so the cash is coming their ways.
So basically, what we see in the German market, or at least what our operators are telling us, is that they are starting to see similar increases in their revenue as what we hear in other European markets, and that even as far as staffing is concerned, there might be a first step towards somewhat softening the very rigid system in Germany. So basically, looking at the market with much more confidence than we did in the past. Then going through the other slides, hopefully this will be much more quickly. This gives you an idea of who the operators are.
No surprise there, 90% are private profit-driven operators, 6% are not-for-profit operators, and 4%, which is actually more than it used to be, are public operators, and this is mainly in our Finnish portfolio, where today we are, I think, close to 20% of the Finnish assets for which we have municipalities as operators. By the way, on one of the previous slides, you probably have noticed that the Finnish municipalities in themselves already they are 4% of our tenant risk. Then walking through some of the slides, which probably will not come as a surprise, the WAULT of the portfolio remains at a very high 19 years. Occupancy rate remains at 100%. And then I think something which is more of interest today is what happened in terms of portfolio valuation.
Now, you will see on the left side of the slide that we are now at an average value yield of the portfolio standing at 5.8%. But I think that the right side of the slide will be of more interest. Looking at 2023, we have seen a like-for-like decline in the value of roughly 2%. But I'm going to focus also a bit more on the column showing you the change in fair value for the last quarter of the year. There you will see a -0.6%. First message here, that's clearly in line with the simulations that you have seen in one of the slides that Ingrid has shown you when we tried to predict what could happen with the debt-to-asset ratio.
So we're clearly in the better case scenarios here. One thing—secondly, also pointing out that in three of the countries today, we already see, well, what might be a sort of bottoming out or slightly positive, value, evolution, which is clearly the UK, where we have seen this now for three quarters in a row, but this time also in Finland and in Ireland. Moving then to the committed pipeline, this is probably the third main topic, to be flagged, to the market. If you look at the pipeline at the end of the year, it shows EUR 430 million of projects to be delivered in the future. But if we look at what really needs to be spent, then it is down to EUR 245 million.
EUR 168 million already was invested in construction sites that are ongoing at the end of the year. This is a portfolio, as you know, that is 100% pre-let. Once these projects will be delivered, that will lead to an extra EUR 23 million of rental income. If you look at the yield today, it stands at 5.6% on cost. No doubt that if you would want to add new projects, it will not be at these yields and at much higher yields. But what the impact will be on the portfolio is something I will give an indication when talking about our medium-term outlook. Maybe back to the pipeline itself.
Also important here is to note that where in the past we had a lot of exposure to the German market in terms of projects, now it's clearly shifted to the Finnish market. So 28% of the to-be delivered projects are located in Finland, and then to the UK market, so it's another 19%. Now, if I add to that, the Irish market, another 10%, and I come to the conclusion that 57% of the projects that are to be delivered in the near future will be delivered in countries where, and now referring back to one of the previous slides, valuation today has—or at least in the last quarter of 2023, was no longer negative. So that in itself, I think, is important to point out.
Then, and this is the second graph you see on the slide, and I'm switching to the next slide. It's also important to note, is that looking forward from, and this is on the right side of the slide, towards the end of 2024, we expect to deliver another, as Ingrid already mentioned, roughly EUR 300 million. So by the end of this year, the pipeline will be at EUR 120 million if we do not add new projects, of course. But this also means that the historic forward deals that have been made in the recent past and before the market started to change will actually all almost fade out in 2024.
Maybe also important to flag is, and that is what we see on the left side of the slide, is that there is also some room for us to actively manage this committed pipeline. Meaning that, and you will see in what we show in the roll forward from 2022 to 2023, that we canceled throughout the year, EUR 82 million of projects. They were committed, but there was a reason that allowing us, or at least an element allowing us to cancel some of these projects that could have been the fact that developers were not respecting deadlines in terms of building permits or were not able to deliver within the agreed budget. So that allowed us to cancel 5-6 projects. Those were low-yielding projects.
When I say low-yielding, it's really around 5, and in some cases, even slightly below 5%. Where on the other hand, we did add some projects, mainly in the Finnish market, where we're clearly talking yields on costs above 6%. So there is some room for some active management of this pipeline. Okay, and then, and this is the final slide I'm showing you. Ingrid has given you the outlook for 2024, which is a quantified outlook. What I'm willing to do here is just give you our idea of the way that we are looking at the medium-term future. So basically, what we do expect to see in the next three years, towards the end of 2026. No surprise that, first of all, we remind you of a strong fundamental themes of this, this sector.
You heard me explaining this in the past. Maybe just pointing out that we now start to see more and more signs in the countries, and certainly in countries also like Belgium, where professional associations of operators are really starting to flag to the authorities that they need extra capacity in the future to deal with the aging phenomenon. We're not talking in the next 10 years; we really are talking in the next, the H2 of the decade. So the pressure is clearly rising in the market. That is one thing. Secondly, when we then look at Aedifica, I think that we are in a good position to start thinking about future growth, meaning that we have the balance sheet allowing us to do so. The portfolio is performing very well right now.
We are showing an EPRA EPS and a DPS mainly, which is still only roughly 80% of our EPS. But even more important is that when we look at a base case scenario, and in base case scenario, I mean a scenario in which there would be hardly any investment possible for Aedifica. In that scenario, we still expect to see the EPS slightly increasing towards 2023. That is a scenario in which we execute the pipeline and have very limited additional investments, mainly in Finland. Even in that scenario, we do expect to see a slight increase of the EPS towards 2026. This being said, it is not the scenario that we think is the most likely or the most probable scenario. Why?
Once again, referring to the strong fundamentals, the fact that the pressure in this market is rising, but also the fact that we start to see opportunities in the market that could and will be accretive if we see these opportunities. You have seen two small examples in the recent past. Small deal that we did in Finland end of last year, and the fact that we were able to buy 50% of the JV from Korian in the Netherlands at conditions that we believe to be accretive. So what we are actually doing right now, and this is also explaining the way that we are looking at investment opportunities today. We are trying to seize some of these opportunities to show to the market that this is a market where there is still a lot to be done and to be expected.
But we're today not willing to push or stretch the balance sheet or to push the DTA to a level where the market would start anticipating new capital increases. So we do want to avoid that type of overhang. It is basically a way of showing to the market, and I think that will be the main message that we will explain to the market, that operators are performing better right now, that there are still opportunities, and there still is a lot of demand in this market, so that we actually are looking with a lot of confidence towards the future and towards the medium-term future. I think that we can conclude here, and we can switch to the Q&A part of the session. Okay, maybe quickly, because I see some people are raising their hands, so we'll switch to them immediately.
You have the possibility to either drop questions into a chat box, I was told, or to raise your hand, and then we will unmute you and let you ask your question. Now, I'm going to do this in the order that I see appearing on the screen, so maybe starting with Frederic Renard. And now looking at Delphine. Frederic, you are unmuted, so please.
Yes. Can you hear me?
Yeah.
Okay. All right. Good morning. Thank you for the presentation. I would have three questions. Maybe first, you have transferred some assets in Germany, as you mentioned, from Ambia to Specht Gruppe. There, I understand that you managed to transfer the assets at the same conditions, right?
Yeah, if you look at the deal that we did with Specht Gruppe, so is that basically the rent levels, they remain intact. So we did not change the existing contracts. We made some arrangements with Specht Gruppe to help them digest these transfers, but then we're talking limited, well, limited efforts from the company, but the contracts themselves and the rent levels, they remain intact.
Okay, that I understand. Then maybe another question. I think in your press release, and I think it's on page, let me check. It's on page 13. You show the valuation of the portfolio by countries, and you are mentioning a total amount of EUR 130 million, EUR 123 million, sorry. Whereas in your presentation and also in the press release, you are mentioning an amount of EUR 144 million as the valuation. Is it still to a loss of value linked to your development operation?
Yes, it is.
Yeah.
Okay. And then how do you look at... So you were mentioning some countries are seeing some kind of stabilization in the yield. Maybe my question would be, I still see some countries, for instance, Ireland, Germany, where the net, EPRA net initial, sorry, is below 5%. Do you feel comfortable with that level of valuation, the current market?
I'll answer it in terms of what I do expect to see happening, and this is to a certain extent, of course, a crystal ball question. But looking at the countries that we are in today, and you actually see it also in what happened in Q4, I think that once again, this is my guess, that there might be some further yield decompression in the German market. So that would not surprise me. But in some of the other markets, if we look at the situation today, and this is also based on what we see, the appraiser is doing is actually, well, below 0.5% or close to 0%. So we do not expect right now a lot of impact in the other countries.
Okay.
This is what I have to say today. Let's see what happens, so yeah.
So would you buy an asset today in Ireland, for instance, at 4.5%?
That's another matter. As I said, what we are trying to do right now is, first of all, we are very selectively trying to buy some assets where we do see very strong opportunities, also in terms of accretion, taking into account the cost of capital of Aedifica today. So we're looking at our cost of capital and based on that, making decisions. So if the question is then, am I willing to buy today in Ireland at these levels? I don't think I would do that.
Okay.
But this, I'm not the market in Ireland, of course.
Right. And last one for me. You were speaking about medium-term outlook, which is interesting, and I'm not well arguing against the strong demographics, which is playing in favor of the sector.
Yeah.
Just looking for Aedifica, as a company. You know, in the past, you have been able to enjoy a premium to your NAV, which has allowed you to take on equity on the market, to allow you to grow. Today, you are at a discount-
Yeah
... which is, obviously limiting a bit, or it's a bit harder for you in terms of your future growth. So my question would be, how can Aedifica avoid the use of equity in order to continue to grow?
Okay. But there's two different, well, maybe two, couple of elements here. First of all, the thing that we are now absolutely trying to do is to restore the confidence of the market in this sector, and to by pointing out that there still are fundamental deals, that there still are investment opportunities that even at today's cost of capital, can be rewarding, and that on the back of operators whose performance is clearly improving. So I think it will be, first of all, a matter of restoring confidence of the market and to see the share price re-rate. That's one thing. Secondly, if you would go into a scenario, which once again, we do not consider to be the most likely case today.
If you would go into a scenario, where we have to work within a closed envelope, meaning available equity is the only thing that we have, and we will not add any more equity, then it will be much more a matter of capital allocation and of switching between certain markets in the portfolio. We have quite specific ideas in that regard. If you don't mind, I'm not willing to communicate too much about it today, as we do not consider it to be the most likely case, but then it will be a matter of capital recycling and reinvesting in more rewarding markets.
Thank you, Stefaan. Indeed, interesting.
Sorry, switching to the next one, Steven Boumans. Steven, you're on mute. Steven, are you still with us? Okay, then maybe we'll first switch then to... I'm just going down the list here. Ben Richford? Can you see that?
Yeah, can you hear me? Can you hear me now? Yeah.
Yeah.
Okay. So, I guess I'm just looking for a bit more clarity on values from here. I think you're saying there's some geographies where you're seeing values bottoming, but we still have a number of portfolios that are looking to be sold in the market, including Deutsche Wohnen and Clariane and others. Given that they're taking time to find buyers, could there not be a negative read-across to come and a further move up in yields, and impact on valuation to come? So that's the first question. And then, just secondly, a question around the withholding tax post-2025. What will that mean for investors if the UK falls out of your European operating asset portfolio, the 80% required for the lower withholding tax rate?
And then, thirdly, you've said you'll accelerate capital recycling if you can't access equity markets. Should you not be doing that anyway? Should you not be seeking disciplined disposal of the lower returning parts of your portfolio anyhow?
Yeah. Maybe first of all, taking the last question, yes, of course. And it's also what we are more and more doing right now, so... Okay, but yes, that is what we are doing. And when I said that we have very specific ideas, they also apply to the situation today anyhow. On that, we totally do agree. But this also means that when we are talking about our asset rotation or disposal program, that we are also focusing a lot right now on solving issues in the portfolio. So we are trying to get rid of buildings that we do not see as long-term holds in the portfolio because they will lead to too much CapEx. So these are things that we actually are already doing today.
Then, of course, the more financial approach is, at a certain point in time, you want perhaps to well, recycle low-yielding assets to try and invest into higher-yielding assets. But the thing there is that you do not want to sacrifice the quality of your portfolio. So it's a bit more complex exercise, but that is basically what we already are doing today. I'll let Ingrid deal with the withholding tax question, talking about value and distressed sales. Yeah, once again, to a certain extent, this is a crystal ball question. What I can tell you right now is that the two, and albeit be it somewhat smaller acquisitions that we did, they came with a quite important fair value gains.
So these were opportunities that we were able to seize, and we did not see our valuers, appraisers react to that as if this now is the market standard and not just an opportunity that I did think I was able to see. So we do not for today see the impact of distressed sales reflecting immediately into fair value gains. We still see assessors or appraisers that is making a difference between the two, being the market and being the distressed seller. Of course, I cannot exclude that if at a certain point in time, the market would be flooded with distressed sales, then that will then become evidence for appraisers to change their view. Yes, that is a scenario that could happen, but we do not see it yet today.
And then again, I think this is just one element among others. It also will happen, depend a lot on what will happen with operator performance. And we do see, for instance, in the U.K., which in the end is basically facing higher interest rates than the continent, that, in the U.K., the value has shown a very strong track record, and I think that is on the back of the very strong performance of the operators. So that is also an element to be taken into account. And then thirdly, okay, we'll see also what the central bankers will do, later on in the year. That probably also will have an impact on the way appraisers will be looking at the market. So it is one element among others, but to date, it's not been decisive.
That's the only thing I can tell about this, and I'm maybe switching to the withholding taxes.
So regarding the withholding taxes, there we believe that, most of the institutional investors, that they will not be affected by a change in the regime, regarding the withholding taxes. It will mainly have an impact on the retail shareholders, which currently represent 25% of our shareholders. What we can say is that this regime has changed multiple times in the past. It's becoming more and more specific to, to currently two companies, I would say. And it's, as it is a, a purely tax regime, in that way, it's difficult to manage a company, regarding pure, tax impacts that it might have. So we will try to manage it in the best way, also protecting the interests of the retail shareholders, but most likely, the withholding taxes will go up to 30%.
Understood. Thanks.
As of 2026. Okay. Switching then to Céline.
Hi, Stefaan. Can you hear me?
Yeah, we can.
Yeah. Hi, Stefaan. I got three questions, if you don't mind. The first one is about all the one-offs that are going into your guidance this year. So can you tell us what exactly is one-off and how much it is? I'm talking about taxes-
Yeah.
And I'm talking about the Orpea surrender premium. And then secondly, my question will be around the Clariane deal that you have done at the start of the month. The 50% stake into a portfolio of six care homes in the Netherlands, EUR 25 million. Can you talk about the cap rate there and how it compared to the book value of the 50% stake you initially own in the portfolio, i.e., did you buy it for cheaper or more expensive than what you had already in the book? And then, my third question, I think it's going back slightly on Frederick's point, but what is preventing you today from raising equity through an ABB? Because you are talking about market reopening could be opportunities, although it's not in the guidance, so that could be the upside there.
Is it, is it just a discount to an ABB that's preventing you from doing that? Thank you.
Yeah.
So maybe I will start with the one-offs. So the one-offs that we have in 2024, and the outlook, they are purely related to taxes. So regarding the Orpea disposals that took place in 2023, it's already included in the books. So the indemnity received there is part of the disposal price in the presentation of the accounts.
Yeah.
Then for 2024, the taxes, the one-offs that we have left-
Okay, sorry. Sorry, can I, can I just confirm here? So in your guidance, to get back to some kind of more recurring earnings, I should just remove those EUR 4.2 million of one-off taxes?
Yeah.
Okay.
For 2024, if you let me,
Yeah
... me finish my sentence. So first of all, you have the EUR 4.2 million. That is a one-off regarding the refund of 2022 in the Dutch entities. Then in 2024, we will not have any current taxes in the Dutch entities because we are still in FBI. That's a change you will see starting from 2025. That has an impact, I would estimate, around EUR 4-4.5 million. And then in 2024, there's no withholding tax on the UK because there is no dividend distribution, so, and that represents more or less EUR 3 million. So if you ask me the questions, what are the one-offs in 2024?
Then I would say the EUR 4.2 million refund in the Netherlands regarding 2022, and the fact that there's no withholding tax in the UK representing EUR 3 million.
Okay.
Yeah. Maybe then quickly about Clariane and the JV that we have with them in the Netherlands. Okay, what we disclosed is that we were able to do the deal, buying back 50% of the shares that we did not control in the JV at a cap rate reflecting a cap rate for the underlying real estate of 6.5%. This is definitely, well, from a difficult perspective, a good deal, because if you look at the historic value and the book value, we did make a fair value gain on that deal. Now, we never disclosed the underlying fair value yields, and we also have to take into account that Clariane still is a quite important client of ours.
If you don't mind, I'm not going to go into full detail, but this definitely was a good opportunity for Aedifica.
Okay. And in that case, because it seems to be higher than the yield for the Dutch portfolio, did you mark down the 50% you owned?
Nope. That is first of all, that's not up to us, that's up to the independent appraiser, and we don't have any indication that that will be the case today. Knowing that these are very brand-new assets, very high-quality assets, so I do not expect, and we don't have any indication today that appraisers would use the fact that we were able to buy at a certain rate now to mark down or to review their idea of the valuation.
Okay, once again, I do not expect, and we don't have any indication today that appraisers would use the fact that we were able to buy at a certain rate now to mark down or to review their idea of the valuation. But okay, without going into detail, we had a similar experience in Finland when we bought these two small assets operated by the city of Oulu and the city of Rovaniemi, end of last year, at 6.5%.
They entered the books at a fair value yield well below 6.5%, and these appraisers, they knew exactly what we paid for the assets. In fact, we're talking about one potential small deal in another country, which is not concluded and done yet, but it's a similar situation. It is an opportunity that comes out of our network, allowing us to perhaps make a very good deal, and we already talked to the appraisers to make sure that what their idea of value will be, and we see a similar thing. So there are some limited possibilities to seize opportunities in this market without appraisers immediately using that as evidence to change valuation.
... Okay, okay, got it. And-
We'll see how, when, if the market at a certain point in time shifts. But yeah, I can only tell you what I see happening in the market today. Yeah.
Well, I guess, like, the pushback here is that if you bought it cheaper, then you should mark to market the bit that you owned, because you're creating market value effectively. But, I mean, that's a different debate. Can you, can you comment on my third questions on raising equity today? What you mentioned-
Yeah, I think raising equity today is... Well, first of all, the very simple answer is that we believe that the stock price is too low, and that it would come at too high of a cost. So that's the reason why I said that what we're trying to do today is show to the market that there are opportunities that we can seize, but without stretching the balance sheet. So don't create overhang and have the market speculating about a potential capital increase. That's what we're trying to do today.
But if I look at the other side of the spectrum, and to explain to you how we look at the market today, now, if there would be a major deal possible, and now we're talking more M&A-wise, which would be so accretive that you even could raise on the back of such a deal capital today, then it is something that we definitely think we can do. But I don't think it would be a good plan today, market being as volatile as it is, going having to go to the market, having to raise equity just on the back of a promise that we will deploy the capital afterwards.
So either you work within the existing equity, and you show to the market that there is a lot possible, and you try to make sure that the stock price goes up again, or you come with a very big and strong deal, which in itself, accretive enough to raise the equity today. So that's the way that we're looking at it right now.
Oh, that's clear. Thank you, Stefaan. Thank you, Ingrid.
Maybe, Steven, I'm going to try again if you are in the call, but you should be in the call, yeah.
In the meantime, we have received written question.
Okay. Sorry.
You still have Eduardo?
Yeah. Eduardo, yeah. Eduardo, you're on mute, so if you want, yeah.
Hello. Hi, can you hear me?
Yes, we can.
Yes, we can.
Perfect. I've got two questions from me. So, the first one, so thank you very much for sending the, sort of the occupancy data. I think this is very helpful. Do you have a sense of how much of your rent roll is below a 1.25 times rent cover? So you shared that data for the UK, but do you have a sense, across your pan-European portfolio?
No, I don't have a number top of mind that I can give you. Because as we... Basically, also, if you want to see the flip side of what we've just shown you is that there still are a certain percentage of assets for which we don't have the info. And what we've shown you is occupancy. When we dive deeper into EBITDAR margins and rent covers, then it even well, the percentage of coverage is also already somewhat less than what you've seen in terms of occupancy. So I'm afraid I cannot give you an answer top of mind. Yeah.
What we do see with the major operators is that they're all, well, in most of the countries, major operators are above 1.25, but then again, it is a vague answer. I'm very much aware of it, yeah.
No worries. Thank you. My second question is, so back to the external growth and cost of capital conundrum. Sort of in history, healthcare REITs have been the marginal buyer, right, in the space, but very large buyer across Europe. So today, if your implied cap rate is not the right one, who is bidding more aggressively than you are for acquisitions, M&A? Why haven't values moved to your implied cap rate, considering it's much better to be a buyer today, considering there are many motivated sellers across Europe? So I'm just trying to solve that equation of how come you can't find deals at sort of 6.5%-7% in your-
Yeah
Cap rates today?
Okay. Yeah, okay. First of all, what we're trying to do is to show to the market that we can find deals, but okay, that's to a certain extent. Secondly, if you're really talking M&A, and you're starting to look at the implied deals of certain parties in the market, you will also find implied deals that are well above cost of capital. That's... Then the third, so basically, there are already opportunities available. That's one thing. Secondly, who is buying today in the market? Well, first of all, there's not a lot happening still right now.
We do see, I'm aware of some deals that might be completed, perhaps in the H1 of 2024, where we do see mostly some private money stepping into the market and trying to take advantage of some of the distressed deals. But once again, it seems to be very opportunistic. And when we look at the market today, you mentioned yourself, it's more of a buyer's market, not so much of a seller's market. We do see more opportunistic players in the market, but sometimes with expectations that I'm not so sure whether they will be, whether they are realistic. So we come across sometimes parties in the market that really dream of buying high quality assets at incredibly high yields, but that is not what we see happening in the market today either. So-
Do you see that changing, sort of maybe second part of this year? I mean, motivated sellers, they're, they're motivated, right? It's not that they have a choice, really.
Yeah, motivated sellers. Yeah, motivated—probably will mean if you are a motivated seller today, that means probably you are to a certain extent distressed or facing quite important refinancing issues. So at a certain point in time, they will have to make their move. But I think that most of them, as long as they can afford to wait, they probably will try to wait and probably are speculating that the market will improve towards the H2 of 2024.
Understood. That's very helpful.
Yeah.
Thank you.
Yeah. Sorry, Edward, if you don't have any further questions, I'm just walking through the people that raised their hand, and then we will go to the written questions. Damien Marichal? Damien, yeah, you're unmuted.
Can you hear me?
Yes, we can.
Hi, Stefan, Ingrid. Coming back to the one-offs that Ingrid referred to, correcting the guidance for this year of these one-offs, I come to 4.55, stripping out the EUR 7.2 million of tax-related one-offs. And your intention, which I understand is not a real guidance of going back to five-ish EPS in 2026. That would mean over 2 years or roughly back-of-the-envelope 10% growth. I was wondering, what were the ingredients to this growth, bearing in mind that I suppose that you will face gradually higher cost of debt. So is that through rental growth, better less cost or a better EBITDA margin?
Just curious to see a bit of flavor on how the ingredients would be to go back to, to a five euro EPS.
Yeah. Yeah, I think-
First of all, I don't think that,
Yeah, but I think-
Yeah.
Maybe to answer the question, I think there's two different elements to it. If I mentioned at a certain point in time that we do see a slight increase, even if we do not add a lot of new investments to the portfolio. Now, in that scenario, and then I think this is what you want going to answer, it's a matter of it's the need to rent increases, so that we still, we are still taking into account some inflation. The pipeline will be delivered, so the EUR 23 million I just mentioned will also be added to the portfolio. And yes, we do also see and we are working on a slight increase of the EBIT margin or an improvement of the EPRA cost ratio, if you want to turn it around.
So these are the ingredients that if you really take a no-growth scenario as a base case. But as I said, we also think... That is what made me say we still do see a slight increase in EPS. But I also said that we hope and think it's not the most likely scenario when thinking about a three-year cycle. Then, of course, at a certain point in time, we will start adding, hopefully, much more new accretive investments. This is where I say we do already see some potential today, but the question to ask is much more a timing issue, you know, when, when-
So in other words, you would hope to do better than
Yeah.
Just matching back the 2023 EPS of around EUR 5? So it's the.
Yeah, the EUR 5 is a number that you mentioned.
Yeah.
We didn't mention that because we didn't quantify it, and I'm not going to do it, because-
Well, I'm just looking at the chart on the screen, which is 502, so I'm rounding it at 5.
Yeah.
So, and even you are mentioning the 2023 EPS.
Yeah. There, I would like to say that this 5.02 is also including one-off items. They represent EUR 0.20. So I think a more fair comparison point-
Okay.
would be the 480.
Okay.
And take that as a comparison point.
Yeah, yeah.
Okay. Okay, then it's... Okay.
Yeah.
Clear enough. Thank you.
Okay. Thank you, Damien.
Yeah.
I think Amal. Yeah, sorry, but you, yeah, the last one in this... Amal, I think you're on mute now. Okay, but maybe I will try first-
Can you hear me now?
Okay, yeah. Okay, yeah, Amal, we hear you.
Yeah. Good morning, Stefaan and Ingrid. First, thank you, yes, for the disclosure of operator occupancy. That's, for, in my view, first step to restore confidence on the, on the operator, healthcare operator financial health. So that's well appreciated. I have a few remaining questions on the investment strategy. So we understand that you are looking selectively at attractive acquisition. Can you provide us more color on the minimum investment yield that you are now requesting for this acquisition? And I would have a second question about the scrip dividend, given the share price. Do you intend to offer this option for the dividend to be paid in May? And perhaps a last question on the disposal. So I understand that capital recycling and disposal will be part of your strategy going forward.
Can you assume that you will have more or less EUR 100 million at your disposal every year in the coming years?
Okay. First of all, the indication of the yields that we're looking for, I think that if I, I referred a couple of times to the two small recent deals, the one in Finland, the one in the Netherlands, and this we, we all, in both cases, published a yield of 6.5%. So I think that is a good indication of what we are looking for. Now, there are differences between countries because we're also taking into account tax leakage, et cetera, but I think it's a really, a good indication of what we are looking for. Capital recycling, yes, we gave guidance EUR 100 million for 2024. We have a pretty good idea of what exactly it is that we want to sell.
But to be quite honest, we're also keeping an eye on what is happening in terms of valuation, what is happening in terms of the DTA of the company, and if we are in the better case scenarios, there will be less pressure on us to really sell a lot. If there would be more pressure, yeah, then we are definitely going to make a bigger effort, but also a bigger effort to get to EUR 100 million, for instance. That but it is an indication, once again, of what we think is feasible in terms of normal asset rotation. We haven't decided yet whether that will be the number recurring for the forthcoming years. But looking at the asset rotation program, and asset rotation, it always, for us, it is based on the quality of the portfolio.
We're now not talking about protecting the balance sheet, but that could be a number that you could see also in the future. Yeah. And then there was a third question, and you have to remind me because I think it was-
It's about the scrip dividend.
Yeah. Yeah.
Scrip dividend.
Yeah. For the scrip dividend, we have not taken a decision so far, so it will depend on the evolution that we will see on the share price, also the valuations at the end of Q1, and how we perceive the investment market and the opportunities for us to add new investments to the portfolio. So, so far, no decision has been taken on the scrip dividend .
Yeah. Okay.
Thank you very much, Becky.
You're welcome.
Thank you.
Then quickly scrolling to... Because there's some questions in the chat box.
Yeah. I think some of them we have already answered, but, you take the first.
Yeah. Okay. So, Lynn, your question about where do we see the EUR 100 million disposals? What is the underlying strategy for these disposals, as your data is under control? Okay. Now, first, where do we see them really spread out across the portfolio, so it's not in, in one specific country. Secondly, when I just mentioned that we have a pretty good idea of what we want to do, this is really coming out of our condition measurement program that we have, and which allows us to identify assets for which we do not see a long-term future in the portfolio. So it's really based on that type of analysis that we're selecting assets in the different countries.
Also, bearing in mind ESG, of course, and that we will have to, at a certain point in time, make sure that we reach the targets that we have set there. So that is basically what is happening. And I already indicated that EUR 100 million is an indication of what we're willing to do this year, but we're also keeping an eye on the DTA in a positive and a negative way. So if there is hardly any fair value loss, there will be much less pressure on us to really go for the EUR 100 million compared to the other situation. So it is basically, well, keeping an eye on different indicators and parameters here. Switching to the next question, Veronique, any interesting portfolios in the market that you're looking at, for instance, Domus Vi in Spain?
Now, if the question becomes too specific, we definitely cannot answer it. Are there portfolios in the market? I think, Ben also referred to it. Yes, there are some portfolios in the market today, or at least we expect to see some portfolios in the market. And are we looking at certain things? Yes, we're constantly monitoring the market, but I'm also referring a little bit to what I just said in terms of the way that we're looking at managing the balance sheet and how to think about raising equity, is that, if we would make such a move, we want really to make sure that we can bring a very creative deal to the market, a deal that remains accretive even after raising equity. So it is really... I think I mentioned the word timing before.
It is also a matter of timing, to a large extent. I don't even read the question.
The next one was on scrip dividend, so I think we already answered that.
Yeah.
Yeah.
Okay, Steven. Yeah, we have your questions here in the chat box then. Sorry, read it.
So I think there, the question is regarding the Clariane JV stake at a yield of 6.5% and how it compares to the EPRA net initial yield in the Netherlands of 5.1%. Well, first of all, these are very different concepts. So the 6.5% should be compared to the fair value yield that we have in the Netherlands, on the Dutch assets. So this is more like a 6%. As explained by Stefaan, we did a good deal. So that's the reason why the fair value yield, you have the difference. Then what is explaining the bridge with the EPRA net initial yield, yield?
It's mainly related to the fact that in the Netherlands you have a lot of transfer taxes and transfer costs that are taking into consideration and deducted in the calculation of the EPRA net initial yield .
Yeah. I hope, Stefaan, that was helpful. Yeah? Scrolling down. I have one last question from Lynn, but I'm not sure, an indication of the like-for-like growth or country like-for-like growth of-
Yeah, I think, then Lynn, you should be a little bit more specific-
Specific, yeah
... on the question. What exactly you are referring to with the like-for-like growth in January? So I suppose it's evaluation, but,
That we don't have to be quite honest.
Uh.
Maybe Lynn, because... Well, feel free to reach out to us after the call-
Yeah
... because, maybe scrolling down. Yeah.
... So, operator, have the next question and the operators that we monitor a little bit more closely. I think there you can make a comment.
Which one is that? Sorry.
Veronique.
Okay. Yeah. No, I was-
So we have-
Yeah, sorry. Yeah. So yeah, I was scrolling through the chat box. Véronique, yeah, your question about our watchlist, I think it is. Where we said in 2022, there was a small part of the portfolio that we were monitoring more closely. I think that the message here is quite straightforward, is that when we look at the watchlist today, it actually almost dried up. So it is really a much, much reduced watchlist compared to what we were talking about in the course of 2023. Now I'm touching wood in the hope I didn't jinx it, but there we also definitely see, we see that also as an indication that apparently the situation for operators is improving. But okay, that is, of course, anecdotal information. And-
Then you have the question of Steven Boumans on the expectations for the investment market for 2024.
Meaning, could you please run current? So are you, Sorry, are you currently in any sizable acquisition processes? As much as I would love to answer that question, Steven, I cannot, for the obvious reasons. But for the sake of clarity, as I said, we are clearly looking to smaller, very accretive, investments that we can add to the portfolio on the back of the existing equity position of the company and keeping an eye on what happens in terms of valuation. But we are clearly also, and I confirm what I said in the past, we do have also an eye on somewhat more sizable acquisitions, and we're thinking more in terms of M&A.
But if and when this would happen, that, yeah, always difficult to predict and definitely not for me to talk about because then I will make it impossible just by talking about it. Then too more color on the portfolios that are or will come to the market like Clariane in the Benelux. Okay, but Clariane in the Benelux is an OpCo deal, so they're what Clariane is doing in the Benelux is selling the operations. And as far as what I heard, but this is market gossip, is that they're much more targeting family offices and private equity rather than industrial solution, meaning another operator taking over that portfolio. So and okay, as far as I can tell, but once again, based on market rumors, is that they are in the market today and talking to interested buyers.
But once again, these are, these are market rumors. The Domus Vi portfolio in Spain. Yeah. There is a portfolio in the market in Spain, for which somebody is now sending out NDAs. So I just can confirm that there probably is a portfolio out in the market. There's really nothing more I can tell about it. And then any idea of the quality of the assets, pricing, and timing would be appreciated. Yeah, but to, to be quite honest, it's a bit too soon to, to, give an answer to these type of questions. So once again, referring to the, the very simple fact that the more I talk about potential deals, the bigger the chance that we will never do them.
Going down, let's see, we have Stephanie Dossmann, you said, "What is your assumption on portfolio asset value change for 2024?" Okay, I'm willing to give an answer, but this is very... It is a very personal estimate and just me thinking about the market. Basically, what I expect for 2024 is to see something similar as what we've seen in the last quarters of 2023, and then I'm thinking in the line of fair value depreciation around -1%-0.5% on average per quarter. Question is whether that will go on until the end of the year or that it might go on until summer of 2024 is an open question to me. So that is actually what I expect.
Okay, I'm aware that you, there could be other reasons to be either more optimistic or more pessimistic, but if you ask what I do see as a base case assumption, but once again, this is a very personal answer, I just mentioned it. Yeah.
Then you have the questions on the line.
Uh, acquisition.
It's regarding the like-for-like growth of the indexation. And the increase of the rental income for the portfolio as a whole, we assume that like-for-like indexation will be around 3%, but you will see variances between the countries. For instance, in Finland, we already had the indexation in January, as most of the contracts in Finland are indexed at the beginning of the year. So there, it was around 3.6%. Sweden was much higher. They were about 6%. But for the portfolio as a whole, we are expecting around 3% for the full year, 2024.
Okay. There's a question from Christopher about the scrip dividend, given the shares are trading substantially below discount, discount to NAV. Do we expect to recommend the scrip dividend for this year? Yeah, maybe, Christopher, to put it into perspective, this is a discussion that the board will have in May, when we will pay the dividend. But this being said, bear in mind that the dividend is split into two different coupons, so that in the end, if we would do a scrip dividend, it would only apply to the coupon which is still attached to the shares, and that's roughly 50% of the dividend. And that in normal times, we see success rates or take-up rates of scrip dividend around 30%.
So the impact in itself will not be that big, in terms of amounts, but also in terms of dilution. But once again, it is a decision that the board will have to make in May, and at that point in time, looking at the stock price in May. Yeah. Did we go through all the questions, or did we miss anything?
No, we handled all of them, I think.
Yeah?
Yeah.
Okay. So, unless anybody has really a final question, which I do not see appearing right now, then, I just want to thank you for the time you spent with us, and wish you all a pleasant day. And probably, we'll be talking in the near future to each other. Thank you very much. Bye.