Good morning, everybody. Welcome to our Q3 update. First of all, this quarter will always be marked as the summer of the sudden passing away of our beloved Tony De Pauw, my compagnon de route. Together as a perfect complementary couple, we built WDP together since the IPO of 1999, based on the fundamentals of his father, our founder. I can assure you that together with the family, we will continue to build our European dream, a €10 billion+ core Western European logistic and industrial real estate company with an add-on in Romania, based on our everlasting principles: being effective, creative, and sometimes a little bit contrarian.
In order to create our dream, we added the last missing element onto our financing strategy: a full operational EMTN program based on our new updated A3 rating of Moody’s and our inaugural green benchmark bond of €500 million with a unique margin of only 80 basis points. Once again, we show that we do not only create value with our assets, but also with our liabilities, and this is not included in our NTA. We are sure that this rating and our EMTN program have not only a value for our debt investors, but also for equity investors, especially the generalists, since our new credit rating brings us in the top five balance sheets of E.U. REITs. Special congrats to the long-term discipline of Team Finance.
Besides that, of course, we also delivered once again on our promises: a clean sheet across the board, an EPS of €1.50, 5% year-on-year, fully in line with expectations, full-year guidance of €1.53 EPS confirmed, and as mentioned, of course, supported by a unique balance sheet with liquidity and autofinancing in place. We also continue to demonstrate the strength of our commercial platform in a stable but calm market within a volatile world, probably for longer, and we will have to cope with it. Volatility will be the new normal. We realized 400,000 sq m of new leases signed this year across the existing portfolio, ongoing pipeline, and new developments, with an occupancy of 97.4%, slightly higher, with all maturities in 2025 resolved, 90% renewed, 10% released or in current vacancy.
An investment activity of €475 million, bringing the total investment pipeline in execution to €700 million at a 6.9% NOI yield, 83% pre-leased after, of course, the deliveries of the running developments and acquisitions. As mentioned this summer, we have now all the building blocks in place to realize BLEND2027 and confirm our 2027 guidance of €1.7 EPS. Almost halfway through the four-year period, we now have to build the house, which means executing and letting. For those who doubt, let us be clear: BLEND2027 is not the end. Our ambitions to create profitable growth with strong total return go far beyond 2027, based on the following foundations: the solid long-term fundamentals of the logistics and industrial real estate sector, and by internal value creation, especially through the E in BLEND, extracting value out of the portfolio by the land bank, rent reversion, indexation, occupancy, upgrades, and so on.
Now, first time for Q&A with Alexander.
Good morning, everyone. We're now open for the Q&A. There are two options to ask a question, either via the chat or by phone via the teleconference. To ask a question, please dial Pound or hashtag T5 on your telephone keypad to enter the queue. If you want to withdraw, dial pound key six on the keypad. The first question is coming in from Steven from ABN . You can unmute yourself.
Hi, good morning, team. Thank you for taking my questions. I have several questions on occupier demand. First, a general question. What do you see happening in occupier demand? Maybe second, two more.
Steven, can you ask me them just one by one? Apologies.
Yeah, sure. Maybe start with the specific ones. The news that Amazon will invest €1 billion in the coming two years in Belgium. Do you expect that to be in existing assets or expand only in their existing, or for their existing assets or in new space? That's one on Amazon. On Amazon, I think Belgium is the Benelux, first of all. It is across the board in different things. They have some small buildings, which of course they will use first. Above that, they will also stay working with partners like Bpost and PostNL. It will be very broadly. Let's say it will be a little bit everywhere, but in their total supply, in their website, in their infrastructure. It's not €1 billion in extra space.
I think in the end, if everything is successful, they will need more space, but it will be very broad and it will take some time.
Okay, clear. Another news item.
It is always a good sign that a new player, because Amazon is almost not active in our region, that a new player is entering the market.
Yes, very clear. Thanks. That's good news. Maybe another news item is that different countries, including the Netherlands, but also France and others, want to add additional costs for small e-commerce packages to target the Chinese e-commerce players. Maybe already as of 1st of January . Do you think that would materially impact demand for logistics warehouses?
No, this will have no impact on the warehouses. That can make that some players, who are just importing, it can only make the existing European e-commerce business bigger.
Okay.
We don't see any negative impact on that.
Clear. Maybe zooming a bit out just in general, so occupy demand, is it better today than three months ago, six months ago?
Like we said, I think let's look last year after summer. Then everybody came back from holiday and everybody was looking internally. Okay, we go towards the end of the cycle. Maybe go into a little storm or a more heavy period. How can we protect what we have, protect our supply chain? Let's say everybody looked inside. Now, since June, let's say, since the summer, now people are indeed, they reorganized, they optimized, and now they are ready to look forward again. They look forward again. They are looking, how can I optimize further? How can I invest in my supply chain? Of course, they wait for consumer spending to really make the decisions. Everybody is looking forward again. I think this is the big difference versus, let's say, a year ago. Indeed, we have to wait until consumer spending is really getting up here.
On the contrary, for example, in Romania, you see that consumer spending is growing. Then we can do developments like, for example, Action, who is there entering that market.
Very clear. Thank you so much for answering the questions.
Thank you, Steven. The next question is coming from John from Kempen.
Hi, good morning. On your credit rating, your latest month-issued demand was quite strong. Like you said, I think it was 80 basis points credit spread. What's the difference in the spread between being A-rated and BB B?
The difference between the previous rating, BB B+ , is around 5- 15 basis points, and it will be around 50 basis points versus a BB B.
Okay, 5- 15 basis points. How does it compare to your underwritten cost of debt in your BLEND27 plan? I suppose this upgrade to A's rating is not necessarily part of the BLEND27 plan.
No, but indeed, it will not change the 2027 outlook. There is a financial cost synergy to be captured because our existing debt has a credit spread of around 120 basis points and for an average historical duration of seven, eight years. Now we signed based on the A- rating. We did, on the A3 of Moody’s rating, a benchmark bond of five years at 80 basis points. There is some synergy to be captured, but over the horizon of the maturity of the debt, obviously.
It's like a rent reversion. It will come, but it will take time.
Okay, clear. Just on your commentary, I think in the press release, you're talking about that momentum is healthy for smaller units of up to 10,000 sq m. Would you consider adjusting your pipeline with the product that you're building to capture this demand?
Yes, but it's broadly. It's also in the existing portfolio. It is in the new demand, like for example, the development in Prince Hill, which was all more urban high-end logistics spaces, but less than 10,000 sq m. There indeed, we feel that I would say almost a normal market. It is in the bigger demand that there is still very selective. Yeah, a lot of our sites are indeed constructed to be able to rent them. Let's say if we have a 30,000 sq m or 40,000 sq me building, sometimes it's really already foreseen in the building that we can split it up. For example, four cells of 10,000 sq m. We have always been flexible to, let's say, to capture the demand.
I think this is very important that we are, as a company, as a commercial team, and with the buildings, very flexible, able to capture the demand of the moment.
A good example is the building of Ericsson, where we had the break of Ericsson just prior to the delivery and for which we were fully indemnified. That was the news of the end of last year. Look at that building. It's a top-notch building, 30,000 sq m, and we can split it up in units of 10,000 sq m. We can use it for standard logistics operations or for semi-industrial. That's a good example of how we build multifunctional warehouses.
Okay, clear. Just as you alluded to the demand for the existing portfolio, you signed 1,000 sq m in Q3. I suppose part of it is also on the existing portfolio. What reversion did you capture on that?
Everything is signed at ERV. It's not a question about price. It's a matter of does that client need to take a decision already? Everything is signed at the ERV. For the units signed in the existing portfolio, that is consistent with the reversionary, so + 10%.
Okay, clear. Thank you.
Thank you, John. The next question is coming from Marios from Bernstein.
Great. Thank you very much. Good morning. Thank you for taking my questions. I've got two questions. I'll ask them one by one. Firstly, as we approach 2026, can you make any comment on the progress with lease renewals for the first part of next year, or is it always still a little bit too early?
It is still very early. We just ended 2025, let's say the end of July. That's when you close 2025, and then you start up 2026 in the beginning of September. Let's say we just started up on that, and we start talking with our clients. Based on those first clients, on those first talks and conversations with our clients, we expect today that we can keep the normal retention rate around 90%. Above that, for next year specifically, there are no large concentrations in our tenants. The largest contracts are around €2 million, so only 0.5% of the rental. Based on that, we have the confidence to keep the minimum 97% occupancy as mentioned earlier. Of course, it is very early. We will be able to give a first real detail and a first real forward-looking in our full-year results at the end of January.
Thank you for the additional color there. Just secondly, I see there are a couple of projects in the Netherlands that have been delayed to the end of 2027. Is this isolated, or is there a risk that that could extend to others as well? Thank you.
No, that is just linked to the connection with the grid. In the Netherlands, it's very difficult to get grid connections. We are, let's say, now in good talks to get the grid connection, but it will take longer. That's specifically for Schiphol the case. Yes, it is a little bit lower, a little bit further, but only due to grid connection.
Very clear. Thank you very much for taking my questions.
Thank you, Marios. The next question is coming from Francesca from ING.
Hello, can you hear me?
Yes, hello.
Hello, good morning, everybody, and thanks for taking my question. I would like to have your thoughts on Germany because you are halfway to your 2027 plan, and you clearly reiterated your German ambition. We see other companies, other competitors pointing to Italy and Spain as an interesting market at the moment for acquisition. Also, you had some time to get familiar with the Nordic markets via Catena that you entered in 2022-2023. Can you share your thoughts on these markets besides Germany? Thank you.
In the BLEND project, we said that we would, let's say, enlarge the Benelux with France and Germany. We are fully focusing on those markets. For the rest of the year, of course, there are a lot of good markets besides that. Within every market, there are good places and less good places. We focus on our strategy. Indeed, we cannot comment on, let's say, all the other European companies or European countries, sorry.
Do you see interesting opportunities passing by coming from Italy and Spain, for example, or is that something that is totally?
We are concentrating, Francesca, we are looking to deep. We are making a team in France and now building up a team in Germany. Let's say we have no people in other countries. We don't look at those countries. We are fully concentrated on our own operations. Let's say we don't look at all the other 20 countries in the European Union where there could be, there are good things to do everywhere in every market, but we concentrate on ours.
That's fine. I'm asking just because it seems Germany is difficult, not just for you, but also for other players. That's it.
Yeah, of course, Germany is difficult, but it's not because it's difficult that we don't have to continue. Romania was also difficult 15 years ago. The first 10 years, we did 100,000 sq m, but the next eight years, we went up to 2 million sq m . You have to continue and persist in your long-term strategy, even when it's difficult.
Do you think that I saw that you opened the office and you hired the country manager? Do you think you have enough resources to cover such a big investment market?
One by one, we do it. We start at the beginning of the year with one person, the Country Manager in France. In the meantime, we have a fully equipped team of seven persons. There we are, let's say, in full force. Yes, indeed, in Germany, we have only two persons, but we started now as from the 1st of September with our Country Manager. For the moment, he is fully assisted by the Dutch team. He can do, he can start up. We will also, let's say, go for a full team in Germany. Let's say now we can start. If I say two, it is already three because we have also already a third person now for Germany. Yes, our country manager will build up his team full by now
Okay. Do you see the investment market changing over the latest months, or is the situation similar to the beginning of the year?
I think the situation in Germany is still the same. It's still very, very difficult, and very difficult because prices stay very high. You know we want to grow, but only in a profitable way. We don't go for growth for growth. With the team, we will come to... We have a basis. We are building up the team. We have time, and we want to do it in a good way.
Okay.
In the meantime, we have France.
Yes. Another little question about the prolactin ratio because I see it seems to be stable compared to Q2. Is that impacted from the summer season? How do you see this evolving by year-end, for, let's say, the coming months? Thank you.
Pre-letting in the existing portfolio, in the pipeline.
Yeah, the preletting, I think the preletting stayed the same. Of course, the third quarter is always, let's say, the quarter with less activities. You finalize, let's say, Q2, the end of July. August is holiday, and September, you just restart. It is indeed, we are with the same prelettings, but we could add a new nice development in Romania. That's also then, it was not in a higher pre-lease, but a higher with a new prelet development.
It is difficult to forecast on a quarterly basis. What is important is that we believe in the projects. We have confidence in leasing of the projects. You should rather see towards the end of the project. Everything that we have delivered so far has been fully occupied, fully leased up at delivery. It is also a very limited portion of that pipeline versus the overall portfolio.
That's it. I am all set. Many thanks.
You're welcome.
The next question is coming from Vivien from Petercam.
Yes, good morning. Thanks for taking my question. I hope you can hear me. I wanted to have a follow-up question on John regarding the smaller units. I just wanted to understand from your vacancy how is the share of small units? To that extent, on occupancy, where do you see occupancy going by year end? I think that you improve it from the low point of Q2 that you referred in the Q2 result. Could we expect further improvement by year end? I know that your target is 97%, but I would assume that a quarter of letting should improve the overall occupancy by year. That's my first question.
It depends on, for us, it is, it doesn't matter where a client rents, if it is in the occupancy or as a new pre-let in the developments. It will depend on where we can sign things. Yes, we are negotiating different files with different clients, but it's difficult to say now if this will be in the existing portfolio, in developments ongoing, not let, or in new developments. That's too early and too difficult to foresee. On your other question, indeed, which is the portion for smaller units and bigger units, that's also, like we mentioned before, very flexible. It can be a whole of 50,000 sq m , can be rented as a DC of 15,000 sq m, or can sometimes be leased as three times 5,000 sq m or 10,000x 5,000. We can adapt those buildings. That's the flexibility and the power of our commercial platform.
We can put an extra wall in it. There too, we cannot say, and we can change that depending on the place, on how the building is. It's not that x% is smaller units, y% is bigger units. It really can depend.
I have another question on the investment market and the opportunity in value-add or core plus assets. Do you see any increasing competition that could put pressure on price? Is there any sizable portfolio you see on the market? Just feeling about how much opportunity you see currently on the market?
The good thing is, of course, we look at the market. We see things happening in the market. The big advantage for us is that we don't need to do anything. We can look at it if there is something interesting, complementary, value-adding to the portfolio. We can do it, but we don't need to do it. We can concentrate on the existing portfolio, the pipeline. Indeed, there are, yeah, value-add, then it also has to have a complementary value within your portfolio. It is the normal competition and that did not change, let's say, versus a year ago. It's the same market.
Okay. I have a final one. We'll kind of address everything in the room here as we are pushing out the year and that BLEND27 is fully secured. You put forward the autofinancing capacity to see the additional opportunity beyond this plan. What will happen if you see very large, attractive opportunities? Do you think you could raise capital at this stage and at these share price levels?
I will quote a famous Belgian politician who said, "It's a hypothetical question and we will deal with it when it comes." We will do like we have always done. Can we create value? What is the return we can achieve? What is the EPS creation we can achieve? What is the total return we can get on this deal? Is it complementary to the portfolio? What is the marginal cost of capital to fund it based on constant capital structure? That's how we look at it. That's how we have always done it with a strict discipline to allocate capital and with a strict discipline on the financial side.
Okay, thanks.
Thank you, Vivien. The next question is coming from Suraj from Green Street.
Hi, thank you. Good morning all. Just a quick couple of questions from me. The first one is just digging into this 2026 lease expiry a little bit more. I know you gave some color. Is it possible to share what kind of splits are across your markets or maybe asset types if possible? Just any color there. That's the first question.
It's really broad-based and very general, a perfect representation of the portfolio, I would say. It's also, as you said, in the 14% of leases maturing, really scattered across the portfolio, across types of buildings. The maximum rent in one building of one client is 0.5% of the rental also. It's really very much distributed.
A normal year.
Okay, perfect. Thank you. The second one, it's more of a general question. Is it possible you provide some color perhaps on how construction costs are trending in real time? It's across your key development markets. If you've got any sort of anecdotal sort of information you can share there, that would be very useful.
Let's say as there is in general less new developments, there is less construction work for the construction companies. They are all very well willing to build. I could say that there is a little pressure on the prices, but not that it will really change the yields of our development yields. It's not negative, it's more positive than negative for the moment. It won't change the NOI yield on developments, or not really.
Okay, perfect. That's very, very helpful. Thank you very much.
Thank you, Suraj. The next one is coming from Wim from KBC.
Yes, hi. Good morning. I have some additional questions on the project that's now being auctioned or that's being negotiated, which is called the Audi site in Vorst. Maybe first to start off with, can you give kind of a status? Are you in it? Do you expect this to be finalized this year, middle next year? Let's start with that one.
As you know, when there is a file, we have to sign NDAs. Of course, we can never comment on running tenders like this one and others since we are forbidden to do that due to the signing of NDAs.
Okay, so I note down that you signed an NDA. That's already interesting. Now, maybe just generally, yeah, because you have a big site in the Renault site, the old site. Is there anything general you can say that this is either different, whether you are maybe better placed for this one than the other one? Mainly, how do the two of them compare? Is that anything you can?
They totally not compare. They are not comparable. Let's say Renault Vilvoorde is 20 hectares in the north, and that's fully let. There, the factory is closed 25 years ago, and that's fully let. There we bought a yielding land bank with, let's say, now after 25 years, for the next 25 years, and we have to redevelop it. It is an enormous redevelopment potential in time. In the meantime, we have a 7% income on that land bank. It's a very interesting yielding land bank. Audi, that's just, they are still closing the factory. You have to restart from zero. Audi is three times bigger, and that's 60 hectares. Vilvoorde is north of Brussels and not in Brussels City and the big Brussels region. It's north of that. Audi is fully within that. It's fully within Brussels, which is also a different dynamic and dynamism there.
It is, let's say, you buy empty spaces without any rental income. Those are the two big differences between those two sites.
Yeah. Can I just.
So non-comparable.
Just some technical. Yes, yes. What I'm trying to understand about this site, the Audi site, is, and you explained it well, there's no rental income. Obviously, prices will be a lot lower because it's not yielding. I wonder, because it was an operational factory not so long ago, whether if you compare it to other, let's say, real old brownfields, like if you visited recently from CTP and also VGP, which have to be completely deconstructed, can you say about what % would have to be deconstructed? Is it a total deconstruction, or would you be able to use buildings as they are?
Like I said, we signed NDAs, and I don't know the details of the site, but if you look at the location of the site, the question is, what will you be able to do there? It's in the middle of Brussels. Don't forget it. It's not in the middle of nowhere. Like you have some brownfields, and I think you referred to Germany, where you have some brownfields on the countryside. This is a brownfield in the middle of Brussels, just the other side. For people who sometimes take the Eurostar to Brussels, it's just the other side of Brussels South. It's an inner-city location. It's not a brownfield, a big industrial brownfield somewhere in the middle.
Okay. All right. Thanks a lot for that information. Looking forward to this, and yeah, thanks for taking my questions.
Thank you. We have one more person in the queue, which is coming from Frédéric from Kepler .
Hi, good morning, guys. Just a few questions on my side. Maybe the first one, can you comment a bit on the acceleration of the revaluation from my appraiser in Q3 versus ETRA?
I don't think, Frédéric, that's a real acceleration. The underlying, I know it's in absolute terms, it was a bit higher, the revaluation, and in total, it was, let's say, 0.5% for the first + 0.5% for the first nine months. What you see in terms of trends is that the underlying portfolio has been year-to-date flat in terms of ERV, in terms of yields applied. What you see is either we had a small minus in Belgium because we had a bit more vacancy in Belgium, but we could do more pluses through active portfolio management by leasing up vacant space, by capturing rent reversion, by doing small upgrades. It's really the plus you see that is really through active portfolio management.
Okay. Can you comment maybe on the ERV evolution year- on- year in your respective market?
The ERV has been year-to-date flat.
Okay. What's your view going forward regarding ERV? If you have a flat portfolio valuation, in terms of yield and flat ERV going forward, is your portfolio in organic terms going to underperform the inflation, I would say?
No, that's something we don't think. No, that's something we don't think because if you look at the supply-demand dynamic, that's looking favorable over the long term. Yes, there is a bit lower demand today, but also construction has slowed down massively. There is still a lot of land scarcity. We believe that after the strong rise in ERVs over the last couple of years, we are going now, because of the short-term market backdrop, a bit through a stabilization phase in the short term. In the midterm, in the, let's say, one to two years, we should, for the next one to two years, we think it should grow again in line with inflation. Beyond that, we definitely believe it will grow with inflation plus because of the supply-demand dynamics and because of the scarcity element that is at play.
Okay. Maybe just three small also questions, just on the corporate governance. I'm sorry to ask, but is there any news regarding new members for the De Pau family in the board?
There is not news yet, but we can say, like we mentioned before, that Tony will be replaced by somebody of the family by the annual shareholders' meeting in April. At that moment, he has to be replaced, and he will be replaced. The family is now preparing and is looking internally who will take this role. As from the moment that is finalized, we will come with the results. Indeed, they are well preparing it, and he will be replaced by a new family member in April.
Okay. A question, you saw probably there was a big deal in the Netherlands, DSV being the seller of a large portfolio for, I think it was close to €300 million+ . Have you looked at the portfolio, and why haven't you made a move if this is the case?
Like I had to say to Wim, when we are looking at the file, we have to sign NDAs. As having signed an NDA, we cannot comment on running tenders.
Okay, it's not over just in the race.
I have not, I think me like you, we have not seen a result in the market. I think it is not done. It is not finalized yet if I look into the press. Indeed, we have to follow the rules.
No, absolutely. I know too much on that.
It should not be logic. It should not be logic for such a building. We should not look at it. Of course, in our existing markets, we look at every deal, and sometimes we go deeper, sometimes we do not go deeper. That's the difference between our existing market and the other 20 markets in Europe.
Okay. Clear. Maybe a very last one, but that could be our recurring question in the coming quarter as well. You are obviously becoming bigger and bigger. Today, with a portfolio of €8.5 billion, you want to reach obviously €10 billion at some point in time. I'm just willing to know because in the past, of course, adding €500 million out of a portfolio of €6 billion, €7 billion, €8 billion is relatively consequent. As you grow, adding only €500 million will not move too much the needle. Still a big advancement, but not moving too much the needle. Just wanted to pick your brain on what you think going forward and is your current geographical footprint enough to maybe as a plan to grow much more aggressively in the year to come? Long question, sorry.
In any way, the existing market, by adding France and Germany, our market is big enough to go above, let's say, €10 billion. That was the idea: we go from the Netherlands, from the Benelux and Romania, to we add France and Germany. With these two new markets, we can easily go above €10 billion, and we don't need any new markets to do that. Indeed, we have an autofinancing capacity of €500 million a year.
Yeah, this €500 million is what we can already do each year, standard, without impacting our net EBITDA because we have, let's say, rounded numbers, €100 million of retained earnings, €100 million of scrip dividends, and €50 million, give or take, contribution in kind each year. That's €250 million with including leverage. You can already invest around €500 million at the current returns we invest without impacting your net EBITDA. That's a very good model. Also, do not forget that yes, in the past, for, let's say, the last 20, 25 years, until the start of this growth plan, we were more dependent on volume growth, but with a connotation of profitable volume growth, of course.
Now, as from this plan, and that's what we tried to explain over the last two years already, is that to create further value, and value being defined as earnings per share, consistent earnings per share growth, and realizing strong total returns on a risk-adjusted basis, then you need to blend. That's the slogan of our growth plan. It's just not because of it. It's because it's actually necessary to create further value in this market with higher cost of capital and with the market going through a normalization phase. The good thing is we will then be dependent on not only one driver, but on multiple drivers. We should not only look at what's outside WDP, and yes, that external growth we will continue to do and will be a very important element, preferably pre-lease developments supplemented by value-add acquisitions.
We also need to look at what's in front of us. What's in front of us is a portfolio of more than 8 million sq m, which is underrented and of which you can, repeating your source, extract more through indexation, rent reversion, sustainability-linked upgrades, upgrading of buildings, energy investments. It will be a combination of internal and external growth. That's how we see also the way forward, and this in a bigger geographical market by having added France and Germany.
For us, it's not about going as fast as possible to €10 billion, €11 billion, €12 billion. No, it's not about growth. It's about profitable growth, profitable growth, earnings per share growth.
Absolutely.
Absolutely. Okay, thank you very much.
If we finalize this with €9 million, we do it with €9 billion.
Perfect. Thanks.
Thank you, Frédéric. We have three more written questions that we will go over to. The first one is coming from Shita from Deutsche Bank. As we mentioned, there were two projects with a delay due to the congestion of the electricity grid. Is there any further risk that we currently see in the existing pipeline in execution that could have an impact on the timely execution of the overall pipeline?
No, those are the two. Just those two to get a connection.
The next question is coming from Nadir Rahman from UBS. How confident are we that the occupancy indeed had bottomed out in the second quarter following the 10 basis points improvement we saw in Q3? We saw a similar + 10 basis points rise in Q1, which was followed by a - 80 basis points in the second quarter.
Yeah, but I want to add that that’s a - 80 basis points in Q2 was largely guided well in advance because last year, one year ago at the Q3 results, we also already warned for that because we said that we had had some notices in the existing portfolio end of last year in Q3, which some units falling vacant in Q2, and that that would mark the bottom in the occupancy rate. That has happened. Based on, as Joost explains, based on our conversations, which have only now started after summer with clients for 2026, we see already the normal retention rate of 90%. We’re confident in our message. We can confirm that message that we see the occupancy rate of 97% having bottomed out at Q2.
The + 10 basis points are just mathematically. They are just because we added new rented space. We bought something during Q3, and we delivered some projects. Based on those extra buildings fully let, automatically, your occupancy goes up. As a matter of fact, it was stable, but the 10 basis points are thanks to acquisitions and finalized developments. We have a final question from Michelle Plick, who's asking whether we see any opportunities as a result of the increasing congestion on European highways from multimodal locations, so along railroads, because of tax measures that could be taken by public authorities. Yes, Michelle, I think everybody still hopes already for more than 20 years that railroad will be the future or at least part of the future. It stays very difficult. It's not flexible. It still stays difficult in Europe. It's not one Europe.
I think today it still works like so many years on fixed lines on long distances. For example, from Belgium to Italy, through the Alps, or from Belgium to Romania, long-term fixed distances with fixed full trains. You always need a full train on a fixed distance. It will not help congestion, let's say, between Antwerp and Limburg, because there, for example, you cannot work with railroads. Yes, it can have a possibility that it stays very limited. See at the results of Linias. That's also, it's one of the biggest cargo rail lines in Europe, and it stays very, very difficult. I think there is more to say, and there is more flexibility along the water with container terminals along waterways. With that said, there are no further questions at this time. Joost, unless you have any concluding remarks. Thank you all for listening.
I think we can say that we finalized 2025 as promised, and we just started up 2026. Let's focus on that. We will come with the first outlook at our full-year results at the end of January. In the meantime, we will focus on our clients and our operations. Anyhow, our balance sheet is ready for the future. Thank you, and see you all soon.