Hi, good morning to everybody. Thank you for joining us for Aroundtown's Financial Year 2022 results call. You should have received our corporate news and can view this presentation on Aroundtown's website, either on the home section or under financial reports of the investor relations section. I am Katrin Petersen, Aroundtown Group Head of Communications, and with me today are CEO, Barak Bar-Hen, CFO, Eyal Ben David, Chief Capital Markets Officer, Oschrie Massatschi, Executive Director, Frank Roseen, and Investor Relations, Timothy Wright, as well as representatives from Grand City Properties. For the duration of the call, all participants will be on a listen-only mode, following our presentation, you will have the opportunity to ask questions. Feel free to please send us your questions via email, also during the presentation. The email address is info@aroundtown.de. Once again, the email address is info@aroundtown.de.
We look forward to receiving your questions. With that, I would like to pass you over to Oschrie now, who will begin and guide you through the presentation of our results.
Thank you, Katrin. Good morning, everyone. Welcome to Aroundtown's full year 2022 earnings call. Before we jump into the results of 22, I want to review some of the key macroeconomic points of the year that impacted our normal course of business up to this day. Shortly after lifting all pandemic-related restrictions at the end of Q1 22, the whole market, specifically the real estate segment, was at the grip of global macroeconomic challenges, from circulation to supply chain disruptions, volatile capital markets, and the war in Europe. As we watched cost inflation soar, nominal debt yields becoming volatile on an elevated level, and thus the access to new capital becoming significantly more expensive in a short period of time, preserving cash gained an importance for us.
The decision to accelerate disposals from 2020 onwards had a positive impact on our liability management efforts, and we reached nearly EUR 8 billion of disposals over the past three years. With no pressure to raise funds in the short to mid-term, giving us flexibility to adapt before we need to raise new funds. Although our operations remain stable, we see signs of a looming recession and are concerned about the future macroeconomic environment. A deterioration of the macro environment could impact corporate business negatively and thus impact office letting demand as well as the hospitality business. The residential real estate markets operations, on the other hand, especially on the affordable level, are less exposed. Here again, our diversification provides some level of protection.
Inflation remains elevated despite the efforts of the ECB, and further interest rate increases can be expected, which will put pressure on valuations and can negatively impact access to capital. As a result, to utilize one of our liquidity toolbox options, we decided not to distribute dividends for 2022. Starting on slide four, we summarize our KPI highlights achieved in 2022. On the operational side, our net rental income for the year increased by 13% to EUR 1.2 billion, and the like-for-like at December 22 of 3.5%. Whilst the EPRA NTA reduced by 2% to EUR 9.3 per share, flat year-over-year adjusted for dividend, we grew the FFO I per share by 10% to EUR 0.33 and achieved the guidance for the full year.
Note that we newly defined the EPRA NTA to exclude the real estate transfer tax. On the financial side, we continue to prioritize a strong level of cash and liquid assets to ensure an uninterrupted operational performance. The liquidity position at the end of 2022 amounted to EUR 2.7 billion, which reflects 18% of our debt level. This level is already after the net repayment of about EUR 600 million of short-term debt during 2022 and does not include any expected proceeds of signed disposals. The interest cover ratio remains stable at 5.2 x, and our LTV was at 40%. We will discuss each KPI in more detail throughout this presentation.
On slide five, we have listed our main action points that support our strategy to manage through the current market environment and the upcoming debt maturities without the need to access capital markets in such unfavorable times. To highlight just a few, we continue with our disposal activities to increase our liquidity and liability management exercises to further de-lever the company. Maintaining a very high headroom to all our bonds and covenants reduces pressure to raise funds in the short to mid-term. Together with our high unencumbered asset ratio, we are raising secured debt to extend our debt maturity schedule. In a downturn market, perpetuals carry equity characteristics. Not using our voluntary option to call perpetuals at significant unfavorable terms is a testament to the equity characteristics of this instrument. This enables us to maintain high covenant headroom and long repayment runway.
We are working diligently to maintain our operational strengths through new lettings, prolongations, rent increases, as well as increasing our rent collection while reducing our CapEx spending. Our large cash balance can partially offset the increased cost of debt from positive interest earnings. On the next few slides, we will look in more detail into each point. We start on slide six with the continued success of our disposal activities in an increasingly challenging market for sellers as yields rise. In 2022, we sold EUR 1.6 billion of assets at around book value, crystallizing a disposal gain of EUR 350 million over total cost. It has become more challenging in 2023, we continue to sell successfully and so far signed additionally EUR 150 million in disposals year to date.
These results show the attractiveness of our assets and our competitive advantage to dispose properties also in a challenging market environment. The team is working very hard and does a tremendous job utilizing our deal sourcing network in the disposal process. This has always been our competitive advantage in previous years through acquisitions and now more focused on disposals. We utilize the disposal proceeds accretively while strengthening our balance sheet. On the left-hand side of the slide, you can see the well-diversified disposal breakdown by asset class and geography. Our value creation efforts to identify development rights potentials and to successfully dispose them is confirmed by a share of 26% of all disposals. You will find examples of our recent development right disposed later in the presentation.
Whilst we recognized vital benefits to our liquidity position from the cash proceeds, we also see a decreasing volume of potential buyers in the market due to the more challenging financing environment for buyers and since many large market players are still waiting for prices to find their balanced level. As a result, and since we are under no pressure to sell quickly, we expect our sales to slow down this year in comparison to last year. On slide seven, we reiterate our strong liquidity position as of the cash and liquid assets at the end of last year, plus expected proceeds from already signed but not yet closed disposals and vendor loans, which have an average weighted maturity in Q3 of next year, amounting to close to EUR 4 billion and covering our debt maturities until an end of 2025.
This horizon has extended by an additional quarter thanks to the continuous disposal efforts. On slide eight, we illustrate the impact of the expected disposal proceeds in our leverage. Including these proceeds, our LTV pro forma is at 37%, which is one of the lowest LTVs in the European real estate sector. As we are repaying our debt at a discount, we are able to further delever. In our liability management, we bought back EUR 140 million nominal amount of the 2025 bonds at 15% discount. We initiate this morning an additional tender offer to buy back some of our 2025 and 2026 bonds as a result of our successful disposal activity last year. As bond covenants moved into the spotlight, we want to highlight on slide nine our significant headroom in relation to each covenant.
It's important to note that the perpetual notes are treated as full equity according to IFRS for all covenant calculations and remain so even when not being called. Aroundtown has one of the highest bond covenants headroom among listed European real estate companies. To emphasize a key covenant, total net debt to total net assets, you see at the top of the slide that we stood at 35% in December 2022, which is well below the 60% covenant threshold. In a stress test scenario, our December 2022 total asset values need to drop by around 40%, which implies EUR 14.5 billion decrease in value before this covenant will be triggered, all else being equal. Turning to slide 10, we continue to see bank financing currently more favorable than bond financing. We aim to benefit from our banking relationships.
2022, we raised nearly EUR 500 million of secured and unsecured bank debt from some of the many different local and international banks we work with, which you can see on the right-hand side of this slide. Year to date, we raised an additional EUR 160 million. Going forward, our EUR 22.2 billion of unencumbered assets place us in a strong position to leverage from further banking finance. With an average maturity of six years and a margin of EUR 1.3 + Euribor, the terms for these bank financings are materially better compared to unsecured capital market bond terms available these days. Although the demand for bank financing has significantly increased in the market, we believe the mortgage banking market, especially in Germany, is well positioned to provide this source of funding.
Turning our view on perpetuals, we provide a rationale on slide 11. We see perpetuals as a preferred equity instrument. Perpetual notes do not have any covenants and no default rights, same as common equity. Further, there is no repayment obligation. The option to repay or refinance is solely the issuer's decision. These are equity characteristics. Prior to each individual perpetual call date, we will assess our options in the market. In general, our plan was to replace the perpetuals with the new perpetual issuance, as we have done previously, as these are not meant to be repaid with debt or cash. As was the case end of last year, the group decided not to call the perpetuals in January 23.
The decision was taken after considering all options. The decisive factor was that the rate of a potential new issuance was significantly above the notes' reset rates. To our cautious approach, we also recognize the fact that the prevailing high uncertainty in capital markets could result in a deteriorating access to capital going forward. The reset coupons were adjusted at the respective call dates, which results in an annualized EUR 19.5 million higher coupon payment. We maintain the option to call these perpetuals every 12 months on the coupon payment date going forward. I would like to reiterate that we remain committed to retain perpetual notes as part of our long-term strategic capital structure. We're looking also for other options which will enable the company to keep the equity credit rating of these instruments.
The last key point is to continue improving our operations going forward. On slide 12, we summarize some of the key defensive measures by asset class also available to us to partially offset the ongoing operational cost inflation and further increase in interest expenses. The performance of our properties will be discussed later in the presentation. The rental contracts for our commercial properties mostly include rent indexation or step-ups in the rent. We managed to implement the indexation increases as commercial occupiers are able to pass on most of the indexations to their customers. The residential segment continues to benefit from the supply-demand gap in German metropolitan areas and captures the regular rent increases permitted under the rent regulation. London, on the other hand, has more frequent rent adjustments due to its less regulated nature and more frequent tenant rotation.
Our hotel portfolio continues to recover from the effects of the pandemic as we continue to improve our collection rate and hotels under renovation to resume operations again this and next year. Our expectation, therefore, is to achieve pre-pandemic collection rate level next year. For the portfolio as a whole, this year and going into 2023, we continue to be disciplined and selective with our CapEx investment as we want to maintain a strong level of liquidity. You can see the well-distributed commercial lease expiry profile at the bottom of the slide, with no material maturities in a year, which makes expiries coming slowly while allowing sufficient time to work on reletting. Rent expiries will also serve as a downside protection as we can relet above in-place rent levels. We will now discuss further about ESG and operation in 2022. Frank, please continue.
Thank you, Oschrie. 2022 marks a successful year for Aroundtown, achieving further milestones in our ESG strategy. On slide 13, we summarize some of these achievements. After the start of our pilot program for the Dutch portfolio in 2021, we accomplished a 55% share of BREEAM green certified, up from 30% in 2021. We aim to further increase our green certifications for our Dutch portfolio, and we have started utilizing the gained experience also in other locations. As we have a large portfolio and each certification is an individual and elective process, we expect a gradual progress over the next years. Turning to the social aspect, Aroundtown funded around 90 social projects last year and deal with the health and well-being of our communities, and particularly with the disadvantaged families and children.
As a result of our ESG improvements, we also entered the Dow Jones Sustainability Index and the Bloomberg Gender-Equality Index. All our existing awards and ratings have been maintained or improved further. If you'd like to have more details on our ESG strategy, our appendix holds more information to, for you to review on all our individual ESG elements. On slide 15 and following, we will present our operational results. After finalizing our most recent asset rotation, our portfolio split represent as follows: 43% in offices, 32% in residential, 80% in hotels, and together making 93 of our portfolio value. The remaining 7% are in logistics and retail, of which more information you can find in the appendix.
Equally, with 93% in value, our investment locations maintain its focus on the key European markets with a strong focus on to-top-tier cities in Germany, the Netherlands, and London. Berlin, London, Frankfurt, and Munich remain some of our single most important investment markets. We follow our long-term strategic investment plan and screen key European metropolitan regions for accretive acquisition opportunities from distressed owners. However, in the near term, we anticipate continue to be a net seller. On slide 16, you see the snapshot of our diversified strong tenant structure that is valuable part of our asset repositioning. Aroundtown group portfolio platform at the end of 2022 amounted for EUR 28 billion, with EUR 1.15 billion net rent income run rate and a rental yield of 4.5%. By from the previous quarter due to yield expansion and disposals.
The loan worth for the group increased slightly to 7.5 years, and the EPRA vacancy rate came in at a stable 7.6%. Our 10 largest tenants continue to account for less than 20% of the group's rental income, ensuring that there's only limited exposure to any single tenant in case of a financial distress or inability to pay rents. Our healthy commercial tenant diversity counts around 3,500 different commercial tenants from various industries and limited exposure to any single tenant. You can see at the bottom of the slide some of the high-quality tenant names. For the coming periods, we expect a slowing rental demand from existing and potential tenants in light of the difficult economic environment for many industries, which we expect that will be partially offset by and the capture of market trends through reletting. Barak, please continue.
Thanks, Frank. We break down our office asset segment on slide 17, representing 43% of our group portfolio value. We remain located in key European cities such as Berlin, Frankfurt, Munich, and Amsterdam, with a combined 62% of our office portfolio value. We were able to keep the average lease term at high 4.4 years. Instead, we continue to maintain a well-diversified tenant structure that reduces the risk of industry-specific volatilities. The slowdown in supply of new development projects has become evident in the market as replacement and financing costs continue to rise, providing support to the demand side. We recorded over 5% like-for-like rental growth for the full year, mainly as a result of indexation. For 2023, we anticipate more rental growth from indexations, but also headwinds to the occupancy level.
Therefore, we maintain a cautious outlook for this year, as cost-cutting may become a priority for many office occupiers in the current uncertain market environment. Slide 18 gives a graphical illustration of the ifo Business Climate Index in Germany over the past five years. As economic uncertainty remains on elevated level in Germany, office vacancy levels are expected to moderately increase further in line with our market view. Meanwhile, we see prime rents increase to record level over the last 30 years, fueled by inflation. We assume this trend to continue for most part of this year until the low development volume puts pressure on future office vacancy levels again and macroeconomic volatilities stabilize. Our strategic long-term investment in the residential sector through our holding in Grand City Properties is reflected on slide 17. This asset class represents the group's second-largest segment with 32% of the portfolio value.
At the end of last year, the effective holding in rate in GCP stood at 60%, excluding the shares GCP holds in Treasury. We continue to see material positive contributions from this residential asset located in key metropolitan locations of Germany as well as London. The diversification into the regulated and less cyclical asset segment allows for higher rental income stability in such uncertain macroeconomic times, when we see that our diversified portfolio reduces the risk exposure for any single asset class or location. Overall, Grand City's portfolio recorded a like-for-like rental growth in December of 2.9%, with a record low vacancy of 4.2%, driven by the continuous supply-demand gap in Germany and strong rental demand in London.
The recent inflow of Ukraine refugees into Germany further increased demand, and also in London, demand grew as the increased mortgage rates made renting the more affordable option. As new construction has become more expensive, the gap has further widened. With 77% value exposure in NRW, Berlin, Dresden, Leipzig, and London as organic growth drivers, Grand City is complementary to Aroundtown's investment locations and balances the portfolio between asset classes with different fundamental drivers. The top residential cities in GCP's portfolio are Berlin, London, the cluster of state of NRW, Germany's most densely populated state. These three markets alone account for 64% of the total residential portfolio value. The London portfolio counts about 3,900 units, including pre-market units in the pre-let stage.
Unlike in Germany, the rents in London are mostly unregulated, with short, shorter-term leases, which enables GCP to capture the inflation impact faster and allows for frequent adjustment to market rent levels. In the course of 2022, GCP improved its overall occupancy level to 95.8% due to its well-located assets within markets with long-term demand drivers and increasing demand supply gap. This represents GCP's highest occupancy level on record. On slide 20, we present, sorry, our hotel portfolio amounting to 18% in value of our overall investment portfolio at the end of last year. We maintain a healthy geographic diversification across over 30 operators and many hotel types.
Our hotel portfolio remains stable with a 14.7 year WALT and 87% in value in the four-star category, with a focus on top cities across European countries like Germany, Netherlands, Belgium, the U.K., France and others. Our largest tenant is Center Parcs, focusing mainly on domestic leisure, which continues to perform well. As you can see on slide 21, European hotel recovery is for most of Central Europe, not back to pre-pandemic RevPAR levels. Mainly U.K. and Southern Europe are back to pre-pandemic levels. Particularly, hotels dependent on business and conferences are behind the European average, while leisure hotels have fully recovered their normal revenue levels. Note that due to the ongoing cost inflation and shortage of qualified staff, which continue to weigh on the operator's profit margin, RevPAR needs to be 20% higher than pre-pandemic levels to achieve the same profitability.
Considering this, basically, no more market in Europe is back to pre-pandemic levels yet. Slide 22 is summarizing some key drivers to shape the hotel business in the year ahead. As the hotel business was hit hardest by the pandemic and resulting lockdowns and travel restrictions, we see upcoming trends providing tailwind for recovery, such as corporate and long-haul travel gaining momentum as well as conferences and fairs almost fully held in person again. For 2022, we achieved hotel collection rate of 69%, following a low collection level in Q1 2022 due to the travel restriction. Our full year prediction for 2023, however, is 85%-90% collection rate, followed by a full recovery of the hotel business in 2024, assuming no potential negative recessionary impacts.
We present on slide 23 an update of our development and invest portfolio composition, which accounted for 6% value of the total assets at the end of 2022. The strategy is to identify additional building rights in existing assets we already own by obtaining sellable building permits. Only for the most accretive development opportunities in our portfolio we might consider to develop ourselves if we see an attractive upside with a low developer risk and high pre-let ratios. Given the persisting increased material, energy and wage inflation, we're slowing down our CapEx and construction projects to preserve cash in the near term and we are therefore not materially exposed to the increasing prices. Ongoing projects are being completed and new projects are being selectively considered under the current environment.
The timing of new projects will be re-evaluated based on an updated pricing levels and liquidity available for such projects. This segment also includes properties which are under repositioning or heavy refurbishment with the aim to significantly increase the rent potential. Here, works will be executed in more selective and moderate ways. This segment provides an additional source of funds, especially from disposals, without harming our recurring operational profits. In line with this, we accelerated the disposals of such building rights and signed since 2021 disposal worth EUR 650 million. I will shortly present to you some examples of such recent disposals in Frankfurt, Berlin and The Hague. The geographic and segment breakdown of our available development rights is illustrated on the two pie charts.
Berlin, Paris, Frankfurt, Rotterdam and Munich are the dominant and most attractive single locations in Aroundtown's development and invest portfolios and make up 71% of the entire stock. In terms of our segment breakdown, 43% of this segment are designated for offices, 35% for residential and mixed-use, and the remaining 22% for hotels. Moving on to slide 24, we want to highlight four recent examples of our development right value creation and subsequent successful disposals. The first example is in Berlin city center, which is a 3,000 sqm low-rise retail asset. We received a permit to convert it into 11,000 sqm mixed retail and residential asset. We sold a similar project in Berlin, Warschauer Straße, near Media Spree about a year ago. We will continue to identify such low-rise retail spaces for further development rights.
The other example is a conversion right, which we sold in Niederrad, a suburb of Frankfurt and a popular location due to its proximity to the city center and airport. We obtained a permit for conversion for office usage to service apartment. In the Netherlands, we sold the permit to demolish an existing office of a 21,000 sqm in The Hague and replace it with a 37,000 sqm residential tower. We closed the disposal of an undeveloped land plot in Berlin-Lichtenberg on the back of significant supply-demand gap in the area. It can take several years to obtain building permits in some cases, as the cooperation with the municipalities continues to be slow. Land for development remains rare in top locations.
With 26% of the total disposal value reached last year, development rights have became an integral part of our value creation going forward. To wrap up our operations sections on the following slide, we present our CapEx investment for 2022. The CapEx investment resulted into EUR 408 million, or 1.4% as a proportion for the average portfolio value during the year, compared to EUR 433 million and 1.7% in 2021. Excluding GCP, the CapEx was approximately EUR 270 million in 2022 compared to EUR 380 million last year. Of the three CapEx categories, 48% went into expansion programs, of which around one-third relates to Grand City's pre-letting modifications. This CapEx allows us to create additional letting space or enhancement of existing space.
A further 24% of the CapEx budget was invested for tenant improvements that helps to keep the rents for new lettings and prolongation stable or even above the previous level. ESG related CapEx is included in all CapEx items, depending on the nature of the investment, but the majority is included in the other CapEx and will continuously increase over the years as we identify additional measurements to lift our asset quality to higher green standard, with the aim to reduce our carbon emission by 40% by the end of the decade. I'll now hand you over to Eyal to present you the financial results.
Thank you, Barak. Please move to slide 27, where we present the profit and loss results for the full year 2022. Our recurring net rental income resulted in EUR 1.2 billion, a growth of 13% year-over-year, and as seen on the chart, it is resulting mostly from the consolidation of GCP and is partially offset by disposals. Our like-for-like net rental income amounted to 3.5% in December 2022, of which 3.7% comes from in-investments and 0.2% from occupancy decrease. The strongest like-for-like increase was from the office portfolio with over 5% like-for-like, which benefited from CPI index leases.
Having revalued the entire portfolio again in Q4 of last year, we recorded the property revaluation loss for the full year to close to EUR 500 million, -1.8% on a like-for-like basis. As the hotel segment continue its recovery during 2022, the rent collection from the operators improved. We booked EUR 75 million extraordinary provision for the full year, mainly due to the travel restrictions during Q1 last year. 40% less compared to 2021. Administrative and other expenses increased slightly to EUR 63 million. Finance expenses were stable at EUR 185 million, mainly due to the proactive liability management. We booked in 2022 an impairment of goodwill in the amount of EUR 404 million related to the goodwill of TLG and GCP.
Other financial results came in at 109 for EUR 94 million, higher than last year, but mainly due to the impact of the volatile market on derivative instruments and the consolidation of GCP. Deferred taxes were added back with EUR 82 million, mainly relating to revaluation losses. As a result, the net loss for 2022 amounted to nearly EUR 500 million, generating a -EUR 0.58 loss per share. On slide 28, we present the valuation breakdown per segment. The valuation decline in the last quarter offset the positive revaluations in the first nine months. This quarter marked a turnaround in the valuation trend due to a higher CAP and this results of which partially offset by rent increases. Office value like-for-like decreased by 3.5% and hotels by 1.4%.
The residential properties kept value on a like-for-like basis, proving again the value of asset diversification. Given that we expect interest to remain at these levels or higher, longer, we anticipate some further weakening of valuations in the next 12 to 18 months of an additional 5%, depending on the segment and markets. As you can see from the middle of the slide, our average portfolio valuation remains conservative, showing a gap of nearly EUR 1,300 per sqm, or excluding land, around 50% buffer to the current replacement cost. On slide 21, we illustrate the adjusted EBITDA calculation. The adjusted EBITDA calculation is after excluding EUR 12 million EBITDA contribution of assets for sale, therefore referring to the recurring long-term portfolio.
Positive contributions continue to derive from a more proportional holding in Globalworth and other JV investments, which contributed EUR 59 million in total. Overall, the 2022 adjusted EBITDA increased year-over-year by 3% and amounted to EUR 1 billion. Looking at our funds flow operation on slide 30, we recorded an FFO I of EUR 363 million or EUR 0.33 per share for the reporting period, which is within our full year guidance expectations. Year-over-year, this reflects a 10% increase on a per share level as we see the impact from the share buyback programs kicking in. The total profits over cost from disposals in 2022 amounted to EUR 351 million as a result from the successful completed disposals of EUR 1.6 billion.
The disposals were executed around book value, thereby generating 29% margin over total cost, including CapEx. Year-over-year, the FFO II decreased to EUR 714 million from EUR 969 million. On the next slide, we provide an overview of our EPRA NTA NAV metrics.
Excluding real estate transfer tax. As per our updated definition, the total EPRA NDV reduced marginally to EUR 10.1 billion. On a per share basis, this results in EUR 9.3 per share in comparison to EUR 9.5 per share end of last year, remaining stable when adjusted for the dividend. Oschrie, please continue to conclude the final part of the presentation.
Thank you, Eyal. On slide 32, just before conclusion, we emphasize again our healthy balance sheet fundamentals and conservative debt metrics, which are a result of our disciplined capital structure. For the last 12 months, it has become more and more important to maintain a strong liquidity during these challenging times of lengthy geopolitical unrest and negative macroeconomic impact. Throughout 2022, we have been able to keep our LTV levels stable at 40%. EPRA LTV, which assumes perpetual notes fully as debt, stands at 55%. We see the LTV of 40% as the correct measurement of the company's risk level, as perpetual notes are equity in all aspects, which becomes more evident in times like this when issuers have the options not to call the perpetuals on their first call dates.
The average debt maturity stood at five years, with current average cost of debt 10 basis points higher year-over-year at 1.4%, and an interest cover ratio of 5.2 x compared to 4.9 x in 2021. Our 96% hedge ratio at the end of 2022 is expected to be reduced to 85% during the course of this year due to the expiration of some hedging instruments, unless re-hedged before. This will increase the average cost of debt at the end of this year to approximately 1.9% based on current rates. We see secured financing still more attractive than unsecured corporate debt, as we explained earlier in the presentation. Our high ratio of unencumbered assets supports to achieve secured financing at rates lower than current bond yields.
We still maintain 82% or EUR 22.2 billion of portfolio value free of lien, which provides additional sources of capital. The net debt to EBITDA improved further to 11.9x, down from 12.5x in 2021, as a combined result of operational growth on the one hand, and reduction in net debt on the other. On the final slide of the main part, we provide you with our 2023 guidance. For the full year, we guide FFO I to be in the range of EUR 300 million-EUR 330 million, and FFO I per share to be in the range of EUR 0.27-EUR 0.30. This guidance is taking into consideration a conservative rent increase due to indexation and improvements in collection rates in the hotel industry, which we expect will be offset by the impact of disposals.
We also see an increase in cost of debt and higher coupon payments to our perpetual note holders. Based on a 75% dividend payout ratio from FFO I, dividends per share for 2023 should be in the range of EUR 0.20-EUR 0.23. As usual, please note that the recommendation for dividend payment next year will be based on the prevailing market conditions.
Thank you, Oschrie. Before we invite your direct telephone questions, we would like to answer those questions that we have received by email prior or during this call. For simplicity reasons, we have grouped similar questions in order to answer as many of them as possible. Allow me now to read out these questions. First question: How is the current market environment impacting your office portfolio and your letting process? What are your expectations for the coming periods? Question to Oschrie, please.
In 2022, we have seen a mixed performance in our office portfolio, driven by solid indexation, but offset by looming macroeconomic uncertainties, which have made existing and potential tenants more hesitant to commit, particularly in the second half of 2022 and continuing today. As a result, the letting process has slowed down and therefore new lettings take more time as compared to previous periods. We have a WALT of 4.4 years, which makes expiries coming slowly and allowing sufficient time to work on reletting. The macroeconomic uncertainties have continued to increase in recent months, especially in other sectors, which increase the negative market momentum. We therefore expect continued pressure on the letting process as tenants continue to move their focus from growth to managing costs.
On the other hand, we do not expect a growth in supply, as many projects have been put on hold, canceled, and many offices are being converted to other uses. While we expect that this will have some positive impact, it is likely that the negative demand pressures will outweigh in the current environment. At the same time, inflation remains elevated and past inflation has not yet been fully indexed, which we expect will continue to provide rental growth in the near term. When it comes to our own operations, we recorded like for like rental growth of 5.2% in the office portfolio, which was mostly driven by indexation. We captured over EUR 20 million of rental growth through indexation in 2022, which will have a full period impact in 2023.
We signed and prolonged 420,000 sq m last year, which was comprised of around 140,000 new sq m of new lettings at an average in-place rent of EUR 13.5 per sq m and a WALT of 6.7 years. The remaining 280,000 sq m were prolongations at an average rent of EUR 13.6 per sq m and a WALT of five years. We see our portfolio well-positioned following the disposal of non-core properties in recent periods, resulting in a stronger focus in top cities. This is additionally supported by our strong tenant mix, with 75% of our tenants comprising governments, multinationals, and large domestic corporations spread across a diverse range of industries.
In case a deep recession will materialize in the coming periods, it is likely that this will have a negative impact on our letting performance as well.
Next question. Could you provide an update on your residential portfolio? Will Aroundtown increase its share in GCP?
The residential portfolio continues to show good operational results in Germany as well as London. GCP's vacancy continued to drop to historic lows and was 4.2% as of December, down from 5.1% a year earlier. The rent and like-for-like increase was nearly 3%. In Germany, the demand-supply imbalance continues to widen due to the strong population increase and the increased cost of new buildings, which is supportive for the letting achievements. The London residential market is experiencing an increasing demand as homeownership has become less affordable, with mortgage rates increasing significantly. However, we believe that the rent increase ability might be impacted in short term due to the significant increase in the cost of living on our tenants.
In terms of valuation, GCP ended 2022 with a positive 1% like-for-like valuation result in comparison to 2021, but saw a negative 1% like-for-like devaluation in the last quarter of 2022. We continue to see long-term value in German and London residential market and believe that the strong fundamentals will remain in the long term. We see GCP's current share price as very attractive, which is also negatively affected from the current market sentiment. In 2022, we increased our position in GCP to 60%, and we continue to increase gradually our position. We're currently not planning to make significant changes to our position.
How did the hotel market develop in 2022, and what were the impact on your portfolio? What are your expectations for the next periods?
In 2022, the hotel market developed broadly to the high end within our expectations. While the first half of 2022 continued to be impacted by corona restrictions, the summer period saw a strong recovery in leisure travel, supporting leisure hotels, which reached pre-pandemic levels in the second half of the year. Demand, however, remains asymmetric, and business travel, while improving, has not recovered. city hotels will therefore take more time to reach a fully recovery. Supported by an increased market demand, room rates have mostly returned to pre-pandemic levels, and revenues have recovered towards pre-pandemic levels. However, due to the high cost inflation, particularly in items which have a significant impact on the cost structure of hotel operators, profitability has not yet fully de-benefited from the increased revenue.
Hotels are particularly impacted by high energy costs and at the same time struggle with staff shortages, resulting in higher personal costs on the one hand and limited capacity on the other. This lower profitability also impacted our collection rates, but overall correction rates amounted to nearly 70% in 2022 as compared to about 50% in 2021. We expect a further improvement in 2023 and anticipate the collection rate in the range of 85%-90% and to reach full recovery by 2024. The current macroeconomic outlook remains uncertain. If we were to enter a deep recession, it would likely negatively impact the hotel sector as well. We remain cautious and keep monitoring all market developments.
Could you provide us with additional information regarding the revaluation outcome? What portion of the portfolio was valuated at year-end? What should we anticipate in the future? Specifically, which asset category is expected to be weaker?
We revalued all of our portfolio as part of the full year reporting, which gives the most updated snapshot of the portfolio valuations. In the full year 2022, we recorded like-for-like valuation decline of 1.8% and 0.4%, not accounting for CapEx. In the first nine months, the valuation remained positive. However, in the last quarter of 2022, the values have declined by 3%. The valuation trend has been reserved due to the increased yields, resulting in higher discount and cap rates, which led to yields expansion. On like-for-like basis, yields expanded by 15 bps in December 2022, which came into the last quarter of 2022, coming from indexation and rent increase, have offset partially this yield expansion impact on the values.
We have seen similar trend across all asset types, have seen less devaluations in residential and hotel portfolio and more in the office portfolio and in the development and invest portfolio. The elevated interest rates, cost of debt, and equity is contributing to the negative valuation trend. On the other hand, the lack of supply due to increased replacement costs and stable letting performance offset partially this impact. We expect further decline to be across all asset types and locations. We wait to see a larger transaction volume in the market, which would indicate better valuation trend. Currently, we expect this year that negative impacts outpace the positive impacts and to see valuation decline with further 5%.
Can you please elaborate on your rent like for like, how much of that was from indexation and what do you expect going forward?
We saw like for like rental growth of 3.5% in 2022. This was driven by 3.7% in in-place rental growth, offset by 0.2% occupancy decrease. We have seen over 5% like for like in the office portfolio, primarily from indexations, highlighting our ability to capture the CPI, which offsets the cost inflation we see in our portfolio. The residential portfolio rent like for like amounted to nearly 3%, coming from both rent and occupancy increase. In the hotel portfolio, like for like rents remained flat as we have postponed rent increases until we see higher recovery. Going forward, we expect to continue and see the like for like rent increases in the commercial properties.
Due to negative macroeconomic impacts, we guide a more conservative level than 2022 and anticipate like for like to be around 1%-2%. With the residential portfolio, which is facing negative headwinds due to the significant increase in cost of living, therefore a lower level of 1%-2% like for like is expected in the short term.
With interest levels remaining high, what is your financing strategy going forward?
We cannot assess how long interest rates remain elevated, but given our strong liquidity and no short-term debt maturities, we need to refinance only in 2026. We have a long debt maturity of five years, meaning that it would take more than 10 years for most of our debt to fully mature, providing us with the flexibility needed. We will continue disposing properties, which will enable us to repay debt early, currently at a discount and reduce interest payments. The time we have now enable us to be more selective on financing and give us the opportunity to choose the most fitting instruments. We started last year with an increased focus on secured financing, a trend which will continue going forward. At higher interest rate than our cost of debt, the secured financing assists to extend the debt maturity schedule.
With new financing, we may carry out a liability management program, which could also reduce our leverage.
Can you please provide details on your disposals, which locations, what types, to which buyers, and the pricing compared to book value? Do you expect to continue this strong pace? Will you consider selling at a high discount? Which type of assets and locations are you targeting to dispose?
We signed in 2022 EUR 1.6 billion disposals across various asset types and locations, which you can see in our presentation. We sold with a share of over 60%, mainly offices and development rights. Hotel and retail assets made up a share of over 30%. The majority of the sold assets are located in Berlin, Dresden, Hamburg, Leipzig, and Munich, and a large share in non-core location in the U.K, Netherlands, and Germany. The disposals were at book value at multiple over 21x, excluding developments. We utilize our strong deals sourcing network to dispose this asset through many separate transactions, mainly to local asset managers and developers, family offices, municipality, et cetera.
Going forward, we're aiming to complete the disposals of our asset held for sale portfolio amounting to EUR 900 million, of which over EUR 600 million are already signed. In addition, we intend to sell more properties on an opportunistic basis, and we can then utilize the funds for debt repayment or other accretive activities. Generally, it has became more challenging to find the right buyers, but our rents finance team is working hard to utilize our deal sourcing network. We continue to sell properties also in 2023 and signed after the reporting date an additional of approximately EUR 150 million at book value. We continue to dispose at around book values or with a small discount to book.
Are you planning to pay dividends next year, or are you entering a long period of no dividend payments to preserve cash?
Our dividend policy remains unchanged. We aim to distribute 75% of the FFO per share. We cannot assess how the market will develop until next year or thereafter. If the market will remain difficult, we have the option to suspend the dividend distribution further. The fact that Aroundtown is not a REIT and is not forced to distribute a dividend is safer in tough markets.
Can you please update on your progress with obtaining secure debt? What are the terms do you see lately?
In 2022 and 2023 year to date, we raised EUR 640 million of secured and unsecured debt. We didn't raise any capital market debt as rates are currently too high in comparison. We will just continue to focus on raising mortgage debt, utilizing our strong banking relationship and unsecured debt if the terms are comparable to secured debt. Current margins remain at the level of 1%-2% for five to seven years, which varies between asset types. Therefore, based on the current mid-swap rate, we see a total interest of 5%. Which is higher compared to our current cost of debt, but significantly lower than what we see in the unsecured debt capital market.
Although we are in no need to raise debt now, as we have all the cash for our debt maturities until the end of 2025, we are already preparing ahead of time as bank financing is taking longer than in the past, and in the current volatile times, we are more conservative by securing new funding now instead of waiting until our debt matures and we might be in a worse market environment, which might limit the access to this source of funding. The fact that we have a very large pool of unencumbered assets enable us to raise large amount of secured debt. We are in the process of obtaining further secured debt, which will increase our liquidity and enable us to further optimize our debt structure.
Can you please provide more information on your guidance? What are the reasons behind the decline in FFO, and what do you anticipate to be the primary drivers going forward?
We guide for an FFO of EUR 300 million-EUR 330 million, or EUR 0.27-EUR 0.30 per share, which is the low 2022 results. On the positive side, we see indexation supportive to the top line, with full year impact of 2022 indexation and a continuous indexation in 2023. On the negative side, we expect the market environment to impact the letting side. On a net amount, we anticipate a positive rental income like for like of around 1%-2%. In addition, we expect to see the collection rate for the hotel properties to improve to around 85%-90% in 2023 compared to 70% in 2022. Further, we expect to see a EUR 40 million increased coupon for the perpetual notes.
This is taking into consideration the January 2023 notes reset and under the assumption that the July and October notes will be either refinanced or extended at rates close to the recent coupon and current mid-swaps. In addition, we expect additional interest expenses coming from the existing debt, mainly from expires or expiring of hedging instruments and from increases under the interest caps in the amount of about EUR 50 million. Also, we have included in the guidance additional secured debt financing at current financing rates, which will also have a negative impact on the FFO, but a positive impact on liquidity. We assumed a net disposal activity in the range of the assets held for sale.
Can you provide us an update on your credit rating? How much headroom do you have? Are you at risk for a downgrade?
We have a very open dialogue with S&P and keep them updated with the business performance and our strategy going forward. Just recently in December of last year, S&P reaffirmed our rating at triple B plus with a stable outlook. S&P highlighted the quality of our portfolio and our strong liquidity. The report was published after we have announced our intention to extend the January perpetual notes and not call them at the first call date, and therefore, their assessment already includes this impact. We have a limited headroom after not calling the January hybrids. Please note, S&P acknowledges that the perpetuals keep their equity characteristics regardless, if not called, and do not focus only on the threshold impact. A continuous negative sentiment in the market will also reduce our headroom. On the other hand, the disposal proceeds of signed disposals and proceeds from future deals will provide more headroom.
Can you please comment on your intention to call July 2023 perpetual notes?
Our best case is always to refinance perpetual notes at the respective call dates with new perpetual notes, as we did two years ago. This has to make sense from an economic standpoint, as well as to maintain a solid position of the company, its credit rating, and balancing among all stakeholders. We decided last December to extend the perpetual notes with the first call date in January 2023, as the reset coupon was significantly lower than the expected refinancing cost. No final decision has been made referring to the July perpetuals, and we will analyze the situation prior to the call date. Nevertheless, the difference between the reset and refinancing expectation continue to be very high. We will continue to balance the considerations for all stakeholders and seek to find the most appropriate decision for the business as a whole.
You announced a new tender offer for buying back bonds. Isn't it more economic to buy back perpetuals which trade at a greater discount than the senior bonds?
We have always followed a proactive debt optimization strategy. For the past years, we have also further emphasized that we will utilize disposal proceeds for debt repayments. It is important to highlight that buying back debt with short maturities is in fact preserving liquidity. We are also buying the bonds at a discount, which is reducing our leverage and strengthening the balance sheet. The cash preservation is exactly for the ability to pay the next year's debt. The cash we intend to use for these maturities while buying back at a discount and saving. Therefore, we are able to preserve more cash through this proactive approach. The case is different with the perpetual notes, where the company is not obliged to repay to replace at the first call date. Perpetual notes are not designed to be replaced by debt, especially in very unfavorable market conditions.
The flexibility embedded in the perpetual notes instruments is defensive in case of a difficult market like today.
We highlight that the perpetual notes are an equity instrument and are clearly different from senior debt. For now, we allocate funds for buying back debt, which trades at high discount, which follows the cash preservation approach.
Can you please provide an update on your development activity? Are you planning to execute any large development projects soon?
We identified further development rights. We will continue with this pro-process and disposing such rights. We present our recent development disposals in our presentation. We are mostly selling our development rights. In the current environment, we are more selective to consider developing ourselves. We continue to execute our running projects on a targeted basis and expect to complete some major refurbishment for several hotels, which are expected to open this year. We remain selective on future CapEx projects and thus expect a lower amount of expansion CapEx spending going forward.
Okay, thank you. These were the questions that we received prior to this call. We can now start the open session for your questions. We appreciate if you can ask all your questions at once. We will answer them one by one. Looking forward. Thank you.
Our first question is from the line of Ellis Acklin from First Berlin. Please go ahead.
Yes, good morning, guys. Thanks for the very detailed presentation. Just one question from my side. You mentioned a couple of times about the high replacement costs for the perpetual notes versus the reset. Could you give us a hint as to what you're seeing in term, as far as the terms in the market right now? Thank you.
Hi, Ellis. thanks for the question. Look, we all see the screens and where yields of hybrids are traded. It's in the level of 14.50%. Now, the expectation is in somewhere in this range, which is significantly higher than the recent coupon. Thank you.
The next question is from line of Kiran Kumar from Barclays. Please go ahead.
Thank you for taking my questions. My first question is, how are you thinking about your hybrid coupons? Can you please help me understand how the ratings on those instruments will change if you were to defer the coupons? My second question is, regarding your stake in Grand City, are you in a position to freely move the cash and assets between the ground and Grand City bucket if needed, obviously through arm's-length transactions? That's all for me.
Thank you very much for the question. About the coupons, I think we answered that. Clearly, if we will continue not calling the hybrids, then there will be, let's say, lower headroom on our covenants with S&P. Referring to GCP and moving cash. GCP is a separate public company. There is no ability to just move cash as we want. If there should be any transfer of cash, it should be under arm's length. Thank you.
Next question is from a line of Ben Richford from Société Générale . Please go ahead.
Yeah, thank you. Hi. Good morning. Can you just talk about the overall cash collection on those disposals since the start of 2022 and why it's so low? There's obviously, seems like a long period between exchange and completion. There's the vendor loans as well, but the actual cash collection is very low. Likewise with the hotels, also a very low collection rate still. You've guided to a higher rate in the future, but is it partly just a case that the rents need to adjust down? Two questions on cash collection, please.
Thanks, Ben. On the disposals, the cash collection is high and is in accordance to the contract that we signed. From EUR 8 billion disposals, EUR 500 million vendor loans, that's not a high number. We can say that going forward, disposals might include, might continue to include a certain level of vendor loans, which are paid in accordance to the contract. Cash collection on the disposals is high. On the hotel side, last year, specifically, we suffered in Q1 due to restrictions of traveling. End of last year, we already saw in Q3 and Q4 an increased rate in the level of 80%, and we guide for this year to 85% and 90%.
I want to say again that we always refer to the contractual rents of 2019 without any reduction in leases like, we saw other peers do. We do see 2024 coming back into pre-pandemic levels. Thank you.
The next question is from the line of Paul May from Barclays. Please go ahead.
Hi, guys. A couple of questions from me. Just first one on your valuation assumptions. I know that your discount rates moved out 30 bits, your average discount rates moved out 20 bits, which is, you know, moving in the right direction relative to others. Just wondered why such a small move, given the 300-400 basis points increase in underlying financing costs or in marginal financing costs. Also within that, what is the driver behind the increased market rental growth expectation? Just trying to see your understanding there. The second question, you highlight throughout the presentation, you know, the strong financial position that you, that you believe Aroundtown has, but you're arguably acting as if you have a financially challenged position in terms of desperately selling assets, suspending the dividend, not investing in CapEx.
Just wondering if you could let me know the right way to be thinking about it, whether it's what you're saying on the, on the financial strength or what you're doing on the sort of more stretched financial position. Thank you.
I think that on the... Maybe I'll start from the last one in our expectation for the increase in interest rate or indexation. It's a combination of the asset classes. We feel the hotels are the collection rate will be 85%-90%, so we don't expect any additional like for like coming from that angle. GCP residential will provide and guided about 1%-2%. In the office sector, we see higher indexation on one hand, but we might see if we gonna see, let's say, stronger recession, we might see some headwinds in terms of occupancy or lagging letting activities. That's why the overall like for like that we see in guiding is about 1%-2%.
We hope to come with a much better news in practice. Okay. Paul, did you hear the answer? Because. I move to in the next section, question about liquidity and the way we're talking about liquidity and going forward. This is clearly not a sign of any kind of stress. It's just a sign of being conservative and seeing the market moves ahead of maybe of others. As we already start disposals in 2020 and in 2021, where others continue to buy, and we were being called net sellers at that time, "Why do you sell? Why don't you buy?" We saw, let's say, the potential deterioration in the market.
Today, we are waiting on the line and want to see how market evolves. That's how we act. We have the liquidity, we have a clean maturities until end of 2025. Maybe even more. Still, we want to see where the market is gonna stabilize or interest rates are going to stabilize before we take a long-term decisions about outflows of cash. Thank you.
Next question is from the line of Yadish Murthy from UBP. Please go ahead.
Hi. On the assets that you've sold, we'd just like to ask, what is the discount of the book value versus current market values?
The disposals that we have done were in average on book values. Clearly, there were some that were a bit above, some that were a bit below. The average was at book value. Thank you.
Next question is from Bart Gysens from Morgan Stanley. Please go ahead.
Yeah. Hi, good morning. In the report on page 82 and page 83, you helpfully publish a net LTV. Thank you for doing that. That's great. Not all of your peers do that. What I don't understand is that if I look at the total property value, it's unchanged for the year. If I look at the net debt, it's actually gone up for the year. You've sold a lot of assets, can you please reconcile that with your disposal activity? Thank you.
I'm looking at the page right now. One second. Please go up. Yeah, 2022. The number of investment property basically increased by the share of joint ventures, as you could see, of the EUR 1.3 billion, and we reduced the relevant amount which refers to minorities, especially coming from GCP. On the debt side, the number also changed. I will need you to guide me exactly where you what. In which line you see an issue.
If you look at the last column, proportional consolidation-
Yeah, yeah. Let me look for it.
The last line.
Yeah.
The last column, proportional consolidation-
Yeah.
at the end of 2021.
Yeah.
-was EUR 27.5 billion of total property value on page 83. On page 82, that's still EUR 27.5 billion, so that hasn't changed. If I look at the... Again, at page 83, at your net debt in the last column, proportional consolidation, it's EUR 15.0 billion. If I look at page 82 at the end of 2022, that EUR 15.0 has gone up to EUR 15.3 billion.
Actually, on a proportionally consolidated basis, your total property value is unchanged for the year, and your net debt proportionally consolidated has gone up by EUR 300 million. While you've been a net seller, okay, you've bought back some stock, but you've been a net seller, you retired some debt. Can you help me reconcile those numbers? You would expect that the total property value would have fallen and your net debt would have fallen as well. Thank you.
I think it comes from the consolidation of the increased position in GCP and in TLG. If you would see, the main change comes from the proportional consolidation, where in the minorities in 2021 position was significantly higher than the minorities that we have in 2022. Due to the fact that we increased the... For sure, the reflective LTV of each of the subsidiaries, this is basically the result. The increase in our position in GCP and in TLG, which has lower LTV, contributed in 2022 to the EPRA LTV. Thank you.
Our next question is from the line of Chris Roberts from BNP Paribas. Please go ahead.
Yeah. Hi there. Apologies for this. It's a sort of a credit-focused question. You've, you've spoken already about how you see the benefits of taking secured debt and what that would do for your funding costs. And also, I note your comments on, you know, hybrid tenders and so on and so forth. What strikes me is that given where your hybrids are trading, especially some of the, even the sort of the nearer dated hybrids, all the hybrids which have been extended, you could use your 10% allocation of total nominal hybrid debts to take out a larger portion of your hybrids, given where they're trading, and that would presumably have a beneficial impact on your sort of, your, your interest costs and therefore your FFO.
Are you not tempted to at least consider that, given that that actually might be supportive?
Thanks for the question. First, we clearly see that, yeah, as you can imagine. At current times where, as we detailed explained, the way we see the market and maybe further deterioration in the markets, we feel that at the moment, keeping cash and maybe directing it more to a debt repayment and delever is more important than putting out cash for an instrument or preferred equity instrument. Yes, we see it. This is also, by the way, an alternative that it stays for us. If we see market improves and maybe access to capital improving, we see more disposal coming, we can always go back and direct funds to repay this 10% and let's say improve FFO going forward.
Let's just also say that although it's accumulated cash-wise, the interest coupon is gonna be paid only from next year. We have, still have time if we see improvement in the market or additional disposals to go and use this 10% allowance to pay part of these hybrids. Thank you.
The next question is from the line of Alexander Totomanov from Green Street. Please go ahead.
Good morning. Thanks for taking my question. I wanted to confirm one point you made earlier about the hybrid that you didn't borrow this year. If I understood correctly, those two bonds are still considered equity in their IFRS. Just wanted to confirm they're not being reclassified as debt in your balance sheet. Also wanted to confirm the treatment of the annual coupon for those two bonds in your income statement. Does the coupon still fall under income attributable to perpetual bonds investors, or does it fall under finance expense? Essentially, does it affect your interest coverage ratio?
Thanks for the question. Hybrids are considered as part of the equity section, whether called or not called. There is no change if we don't call it. They are in the equity section, and they'll stay in there. Similarly, the coupon that we pay, it's not part of the finance expenses, so it's not part of the P&L. We deduct it. On our FFO, we do deduct it when we calculate the FFO and the FFO per share. Thank you.
Next question is from the line of Sofia Figueiredo from Alantra Equities. Please go ahead.
Hi. Thank you for taking my questions. I would like to better understand if you could give us more color on the impairment of goodwill. Could you please share the main reasons for such elevated amount with regarding to TLG and GCP? Another question on your cash flow statement. You have a line of transactions with non-controlling interest in the amount of EUR 340 million outflow. Could you please give us more color on that? Thank you.
Yeah. Yeah. Thank you for the questions. Referring to the NCI, maybe I'll start with the second one. Transaction with NCI practically saying that this is the reduction in minority. This is the increase in our position in GCP and in TLG. While we increase our position, we basically buying out minorities, and this is the line according to IFRS, where it goes in the cash flow. Referring to the goodwill. First, let's just say that in the April calculation, all the goodwill have been deducted. On the accounting side, IFRS says clearly it's a method how goodwill should be calculated. The goodwill that we have in Grand City and TLG are mainly referred to their deferred taxes, and there is a way to calculate and measure whether this needs to be impaired.
It's mainly going in the direction of their revaluation or their disposal. The more they will dispose, then, we need to impair, or if they will record, more devaluations, we will need to impair as well. Thank you very much.
Thanks a lot, everyone, who took the time to participate in this call and the questions you've submitted before as well as during the call. As always, we are available for follow-up discussions, and I look forward to the personal meetings with many of you over the coming weeks. Till then, stay safe and goodbye.