Good afternoon and welcome to CPI Property Group's webcast covering our 2024 full-year results. This is David Greenbaum, CEO of CPIPG. Joining me around the table today are several of my colleagues, and you will hear from many of them on today's webcast. Let me introduce our CFO, Pavel Měchura, Mindee Lee, Head of Corporate Strategy, Moritz Mayer, Manager of Capital Markets, and Petra Hajná
Also around the table with me are Martin Matula, our General Counsel, Stefano Filippi, Head of Corporate Finance, and Petra Mízerová , Head of External Reporting. It is a large group, and hopefully you will all see once again that CPIPG has an experienced and diverse group of professionals running the business day to day. Before I get started, some housekeeping matters. The presentation material for today's webcast is CPIPG's 2024 Management Report, which was published last week. You should be able to see the report on your screen, or it can be downloaded from the Investor Relations section of our website. If you have a question, please use the tool provided on the website to log your question. We have always tried to read and answer every question, and we are not in a rush today, so please go ahead and ask whatever you would like to know.
Before we begin, I want to acknowledge the financial market turmoil we have witnessed over the past few days. In this new economic world order, there are many arguments why real estate might outperform other asset classes, and low interest rates are always helpful for our sector. A weaker economy can negatively impact tenants, that's true, but weaker economies also tend to see less real estate development, which benefits existing landlords. I don't want to be accused of only seeing the bright side, and it's just too early to make any other intelligent comments about the situation, so I will leave it there. For now, CPIPG is focused on our daily business, and today's topic is our financial results for 2024. Beginning on Page four, I'm proud of what the group achieved in 2024.
We had four basic goals: maintaining operational excellence, strengthening our capital structure, streamlining our business after a multi-year period of expansion, and making sensible changes to our corporate governance. On all counts, I believe the group made significant progress. Operationally, we're happy with how CPIPG's portfolio is performing. Office properties in capital cities of Central and Eastern Europe continue to benefit from solid tenant demand, robust leasing activity, and relatively limited new construction. Retail performance in the CEE region is excellent, and we have a superb network of shopping centers and retail parks. Hotels and residential are solid with clear upside potential. Of course, in a diversified portfolio like ours, you'll almost never have 10 out of 10 segments performing perfectly.
For instance, offices in Berlin and Budapest are facing some challenges, but CPIPG continues to have a big advantage in terms of the quality and unique positioning of our portfolio and the experience of our teams on the ground. On the capital structure side, 2024 was transformational. Over the last three years, the group has completed EUR 3.4 billion of disposals, and 2024 was our best year because CPIPG received EUR 1.6 billion of gross proceeds and cash advances from disposals. We repaid more than EUR 1 billion of gross debt, returned to the unsecured bond market twice, repaid our acquisition bridge financing, and signed a new revolving credit facility. With EUR 1.5 billion of liquidity at year-end and modes t near-term debt maturities, the group is now in a strong position.
Of course, our work here is not done, and strengthening the group's capital structure remains a daily priority for all of us. The structure of our group has been a frequent topic of discussion over the last few years because of the acquisitions we made beginning in 2021 and 2022. Last year, we took a major step to streamline the group through the squeeze-out of S IMMO by Immofinanz. Finally, on the governance side, we implemented the recommendations of White & Case following our governance review that was completed last year. Our internal compliance organization now has a group leader in Luc ieSalzmanová, and she's doing a great job engaging with both internal and external stakeholders. We also made changes to the board of directors. Zdeněk Havelka joined in his capacity as COO, and Mirela Covasa
We just need to keep executing the plan and focusing on what we do best, which is managing real estate. All right, let's begin looking at more slides in the presentation. If we go to Slide five, there is a short financial summary. At year-end 2024, CPIPG had EUR 20.6 billion of total assets, and our property portfolio was valued at EUR 18.2 billion. Going forward, I expect the portfolio will decrease in size because of disposals. We have a disposal pipeline under consideration which exceeds EUR 3 billion. This figure includes all of the assets that we are currently willing to sell, and our target is to complete EUR 1 billion of disposals in 2025 and EUR 500 million per year in 2026 and 2027.
Considering that the group completed EUR 3.4 billion of disposals between 2022 and 2024 when conditions were very tough, we are feeling quite confident on hitting the target of EUR 2 billion over the next few years, and we see scope to outperform that number as well. Continuing with disposals will allow CPIPG to further reduce leverage. You can see that the group's LTV was 49.6% at year-end, which brings us below 50% for the first time since the first half of 2022. Our intended trajectory as a group is to bring the LTV back down to levels which are supportive of an investment-grade rating in the next one to two years. Note, the year-end LTV had a slight effect from timing of the sale of our resorts in Croatia, wherein we received the cash before year-end as an advance but closed the deal in Q1 2025.
The group has a large volume of contracted gross rent, more than EUR 900 million. EBITDA was EUR 747 million, FFO EUR 357 million. EBITDA declined only slightly last year despite the pace of our disposals, mostly because the portfolio had 3% like-for-like rental growth, which offset most of the impact of lost rental income on disposals, while the net hotel income was lower also due to disposals. FFO was more negatively affected, reflecting mostly higher interest expense. Occupancy is steady at 92.1%, basically unchanged year- over- year, but an enormous amount of work was done to keep it that way, and we are very focused on rents and occupancy in 2025. I will mention also our unencumbered assets at 49%. This is lower than our historic target, which was closer to 70%.
It reflects the fact that secured financing for the group's properties is still significantly cheaper than financing in the unsecured bond market. Through our actions, we hope that will change, and the cost of our unsecured financing will improve because we prefer the simple structure of an unsecured bond. ICR at 2.4x is lower than what we want. Our thinking on the ICR is fairly simple. We need to keep making disposals with a priority on low-yielding and non-yielding disposals, and we need to continue repaying our most expensive debt. Low interest rates will help us, for sure, and low borrowing margins for secured loans also continue to help. I have been speaking for a long time, and I am not covering that many slides, so maybe I will begin to move a little faster and focus on the operational highlights.
On slide six, you can see a snapshot of CPIPG's portfolio. The portfolio is diversified with roots in the Czech Republic, but a leading position across the Central and Eastern European region. 45% of our portfolio is office and 27% retail, so that's about 72% of the total, and most of our efforts are focused around these two sectors. We also have significant investments in residential, hotel, and complementary assets, which are primarily land. Land has always been a part of our DNA as a family-owned company, but again, we are primarily a landlord. 28% of the group's assets are in the Czech Republic and 17% in Germany, which is primarily Berlin. 13% of our portfolio is in Poland, mostly Warsaw, and 9% in Romania.
We are also a significant investor in Hungary and Austria, plus we have invested in other places such as Rome and London, where we see an opportunity. That sets the stage. Now let me focus on what's happening in each segment. Jumping forward to page 15 with more detail on the office portfolio. As a reminder, CPIPG's office strategy is focused on capital cities in the CEE region. Overall occupancy in our office segment was 88.6%, which is basically unchanged versus year-end 2023. However, there is more to the story. Occupancy rose last year in Warsaw, Prague, Budapest, and Bucharest. In all these markets, CPIPG sees either stable or rising rents, and conditions are generally good. In Prague, we are seeing growing pressure for a full return to office. Considering the low level of development in Prague because of high construction costs, this is supportive for the market.
Our team has also been extremely proactive in signing new long-term extensions with major tenants, including some that I hope will be announced in the months ahead. In Warsaw, our team did an excellent job leasing up space at Warsaw Financial Center that was vacated by Google. If you look at their performance in H2 2024, the leasing results were excellent. Overall, conditions in Warsaw remain good, particularly in the CBD region. On the other hand, we see tenant incentives in Warsaw are a little bit higher. In Bucharest, our team estimates that CPIPG accounted for 20% of overall leasing activity in the city last year, despite our roughly 10% office market share. The team has done a great job around leasing. We've become very specialized, for instance, in private clinics and hospitals, which now account for a significant share of our tenant base.
By the way, they tend to sign very long leases, so that just shows you the power of developing a niche like that. In Budapest, the entire office market is facing a challenge as state-owned entities gradually execute their plans to leave privately owned offices for properties owned by the government. In general, the shift is expected to occur between 2026 and 2028, and we have seen many government tenants extending their leases until then. Our team has done a great job with the slight increase in occupancy, which I believe has a lot to do with offering good service, such as our CPI Club application, which now has more than 1,000 users who are enjoying benefits such as car sharing and flexible workspaces. I want to mention Vienna, where the occupancy declined slightly relative to 2023, but the performance in Q1 has been excellent.
Our development, myhive Urban Garden, has been a huge success, with the office portion recently reaching near 100% occupancy. There's very little construction in Vienna, so that helps too. Coworking is also doing particularly well in this market. As you can see on Page 16, rental income in the office segment was down, but that's mostly because of disposals. We sold 27 office properties last year of various sizes. Like-for-like rental income increased 1.6%. There are many good things happening in our office portfolio. These days, we mostly get questions about occupancy in Berlin office, which declined by 3%-4% points in both 2023 and 2024. Last year, Berlin occupancy was just below 85%, although I'd point out that roughly 3% of the vacancy relates to properties undergoing refurbishment. What happened to occupancy in Berlin? Part of the issue is working from home.
We saw a greater impact in Berlin relative to other CEE cities, although nothing like what happened in the U.S. or the U.K. The more important factor was the weakness of the German economy. For the past decade or so, Berlin has established itself as a major hub for technology and creative companies in Europe. In the past two or three years, the much weaker German economy has impacted this segment in a meaningful way. On Page 17, on the bottom right-hand side, you can see a table which breaks our Berlin portfolio down into three clusters. Econoparks, which are the smallest segments of the portfolio located in East Berlin with the most affordable rents, this segment is doing super well at 94% occupancy. We've really seen the weakness in Kreuzberg, which was the tech-heavy part of our portfolio.
What we call Rest West, occupancy has also slipped a little bit. The good news about Berlin is, if you turn to slide 18, you'll see that the net rental income grew in Berlin last year despite the slip in occupancy. This was possible because the rents in our portfolio keep rising. As you can see in the chart on the bottom left, the average rent in our portfolio is EUR 11.46 per sq m, which is an increase of about 4% from 2023, but is below the ERV of about 15 and well below the average in Berlin of almost EUR 28 per sq m. That's important to know. Our team is being very creative on the leasing side. As most of you know, just focusing on Slide 19 for a moment, many of our properties in Berlin are former factories which were transformed into offices after World War II.
These types of portfolios are much more flexible than a brand new office tower. We have a long history of alternative uses such as manufacturing, which is 17% of our total headline rent for Berlin. Medical uses, clinics, commercial living, our team is exploring many good opportunities to think creatively and address the occupancy gaps. Last, and we're not counting on this, but clearly the efforts in Germany around investment and relaxing the debt brake are potentially helpful for the economy and helpful for CPIPG's portfolio in Berlin too. We have already seen the volume of leasing inquiries rising, and there are signs that occupancy is stabilizing, but it's too early for a victory, and simply we will continue to work on this. We have excellent properties and a great team.
I spoke for a long time about Berlin, but it's a large segment of the portfolio and one where we have a lot of focus. The good news is rents are up, and we still see a large potential for rent reversion. In general, across the board, we're happy with the office portfolio. We believe in offices. We said during COVID that the office is not dead, and I believe we were correct. Jumping forward to retail on Page 28, we are very happy with the performance. Remember, this is about a quarter of our portfolio. CPIPG is the leading retail landlord in CEE. We primarily own shopping centers in the Czech Republic, Poland, and Hungary, plus a large shopping center in Rome, and we own 151 retail parks across the CEE region. On Page 29, you can see that the occupancy was 97.1% across the portfolio.
In our retail parks, the occupancy is closer to 100%. What is behind all of this? Part of the story is history. Simply, there just has not been much development of retail across our region. The first modern shopping center in the Czech Republic was opened just about 25 years ago, and developers around our region have been eager to avoid the overbuilding experienced by Western Europe and the U.S.A. As wages have grown and with unemployment relatively low across our region, we have seen strong consumer activity, which has translated into very positive results in the shopping centers. Looking at page 30, you can see that sales and footfall in our Czech shopping center portfolio were up year- over- year. Very importantly, the affordability ratio is just 10.2%. This is rent, service, and marketing charges as a percentage of turnover.
Our tenants are very happy because the space is affordable, demand is rising, and there's very little new construction to create competition or concern. As you can see on Page 31, our shopping centers are located all around the Czech Republic and are mostly focused outside of Prague. Now, on Page 32, retail parks are another big part of our retail strategy, which is focused on daily needs. We have the largest network in our region, and occupancy is about 98%. Retail parks offer supermarkets, drugstores, pet shops, basic fashion, and home goods. It's not just in our region where we see this format working incredibly well. I would say the performance of retail parks is a positive theme almost everywhere at the moment. Moving on to residential, Page 35, most of you know that this segment is mostly about the Czech Republic.
Net income in the segment declined last year, mostly because we sold non-core residential assets in Germany. As you see on Page 36, our Czech portfolio is mostly located in regions of the country where housing stock is scarce and where we have a captive audience. In the past few years, our focus has been on improving the quality of the portfolio and increasing rents. On page 37, you can see that rents in the portfolio are steadily increasing, but occupancy is dropping because we have about 200 units vacant for refurbishment. The residential sector is very popular among retail and high-net-worth investors in the Czech Republic right now. There's a huge interest in real estate funds, and as we announced last year, CPIPG continues to work on establishing a SICAV
The portfolio is not only well-positioned to deliver returns, we also see the Czech residential portfolio as a source of disposal proceeds and fresh equity. Okay, I think it's time for you to start hearing from my colleagues. Rounding out the operational part, I'd like Mindee to take over on hotels. Mindy.
Thank you, David. Continuing on to Page 38, we were very happy with the performance of our hotel portfolio in 2024. Operational results were strong, driven by improvements in the top-line revenue stemming from the sustained recovery in travel demand. On Page 39, you can see that CPIPG owns hotels across the CEE region, but mostly in the Czech Republic. Some of our hotels are owned and operated. Some of our hotels are owned and operated by our JV with Best Hotel Properties, and some hotels are operated by third parties.
In general, we feel CPIPG's greatest advantage is as an owner-operator around our region. Hotels where we are not the operator but still have excellent performance, such as the Marriott Hotels, are more generally considered for disposal. Moving on to page 40, hotels in CEE capital cities outperformed last year with average revenues per available room or RevPAR in CEE increasing by 8.2% relative to 3% for the European region. Prague, in particular, reported over 10% growth last year, driven by increased foreign travelers and several major events held in the city. Furthermore, our advantage as owner-operator allowed us to implement active revenue management strategies such as shifting lower-rated discount groups and tour business into higher-yielding direct bookings. As a result, the portfolio's average occupancy improved to 61.6%, and the average daily rate grew by 12% to EUR 87 for the full year in 2024.
This represents an annual RevPAR growth of about 15.5%. Our focus for 2025 will be to further recover occupancy to pre-pandemic levels by capturing opportunities from the expansion of corporate travel, MICE business, and returning long-haul arrivals from Asia and the U.S. The limited supply of new openings should also support the market. Last year, we witnessed increased investor interest in hospitality assets. CPIPG completed several disposals of hospitality assets, including our ski resort in Crans- Montana and our resort portfolio in Hvar, Croatia. We also disposed of smaller hotel assets in Prague and Germany with limited upside potential. For 2025, you should expect additional disposal activity in hotels, again with a focus on hotels that are either small, non-core, or not operated by CPIPG. On Page 41, I will comment on complementary assets, land and development. In general, we see land as a long-term strategic investment.
This might not be normal for most owners of income-generating properties, but it's clearly one of the benefits of being a family-owned company with a long-term horizon. We have been very successful holding and selling land bank over time, and we continue to consider opportunities both small and large in terms of sales. Jumping to page 42, CPIPG is primarily a landlord of income-generating properties, but we do undertake selective developments to sell or hold, utilizing our existing land bank to generate returns. Development is only 4% of CPI Property Group portfolio. Developments for sale are, for example, residential projects in the Czech Republic with significant pre-sales upfront prior to construction beginning. On the other hand, some developments are intended for hold, such as retail parks in Croatia and hotel developments in Budapest.
These developments provide high-yielding income and add to the overall income-producing power of our portfolio, which helps us address key issues such as improving the ICR. Of course, improving our ICR will mostly come from debt repayment, but if we can deliver some upside from income, this is something we do selectively and very successfully. Now, let me turn the floor over to Pavel to discuss capital structure, liquidity, and other important financial matters. Pavel.
Thank you, Mindee, and good afternoon to all of you. I will begin on page 12. As David already mentioned, CPIPG had EUR 1.5 billion of liquidity at the end of 2024. Our debt maturities in 2025 and 2026 are manageable, but of course, we are already looking beyond 2026. From our point of view, the situation and our strategy are unchanged.
We will continue with our disposals, which are a natural and clear source of liquidity. In 2024, we received around EUR 1.6 billion of gross disposal proceeds and advance payments. Our goal is to complete EUR 2 billion in the next three years. Květa and Michal will give you an update on the status of our disposal pipeline later. If you look at the chart on the right, you can also see how active we were in 2024 in terms of financing and refinancing. For me, the main positive message from this chart is crystal clear. Our total gross debt fell by over EUR 1.1 billion. The next positive message, of course, is that after two years, we returned to the bonds market, issued new bonds for EUR 1.3 billion, and repaid a large portion of our bonds maturing in 2026 and 2027. We also repaid our acquisition bridge in June 2024.
Just to remind you, CPIPG started the year with a bridge balance of over EUR 600 million. We also had a revolving credit facility that was drawn during the year with a maximum balance close to EUR 500 million, which was repaid to zero. David mentioned that we now have a fresh revolving credit facility, which remains fully undrawn. CPIPG was also active in secure bank financing. We refinanced part of our GSG portfolio and refinanced the loan on the Roosevelt pile while signing many new loans across the portfolio. Our banks have been very supportive of rolling over secured loans and providing new bank financing given the quality and performance of our property portfolio. We also do not expect any change in their approach going forward. In fact, what we are starting to see now is that bank lending margins are coming down.
I believe this is driven by the ECB rate cuts, which are putting more pressure on the banks to generate returns. Also, the bonds market has been open, which creates more competition for the bank market. On page 13, I will touch on valuation. As a reminder, CPIPG's portfolio valuations are carried out by reputable independent appraisals and are also carefully reviewed by EY as a part of their year-end audit. However, when it comes to the accuracy and correctness, we should also not forget about sales and bank financing, which concern the accuracy of our valuation. Last year, we completed about EUR 1.4 billion of disposals around book value on average and raised more than EUR 700 million of bank financing, where banks always require an additional valuation. What was the valuation result in 2024? CPIPG's valuation declined by about EUR 350 million or 1.8%.
Our portfolio remained high-yielding with an EPRA topped-up net initial yield of 5.6%, which represents an increase of 20 basis points year-on-year. If you look at the revaluation results in more detail, you can see that half of the valuation loss is attributable to offices in Germany. This is not surprising given economic conditions in Germany. However, as David mentioned earlier, we continue to see rents growing in Berlin, and we can capture significant reversion potential despite lower vacancy there. We also saw a slight valuation decline in our Czech resident portfolio. The primary reason is the comparative valuation approach, which is based on the completed transactions on the Czech residential market together with a temporary decline in portfolio occupancy. However, the Czech Republic is currently experiencing a significant increase in housing prices.
This is mainly due to the decrease in interest rates and the increased availability of mortgages for households. For this reason, we believe that the value correction is temporary and that the value of the residential portfolio will rise again in the coming years. In the retail segment, we saw a small valuation increase of 60 basis points, mainly due to the continued robust performance. In particular, the operating performance of retail parks remained strong, and we see some yield compression. Shopping centers, as David mentioned, are relatively stable and performed well. Our hotels and other assets also continue to perform steadily, resulting in a slight increase in their value. We have already covered so many important topics. I believe the remaining things we want to discuss are disposals, ratings, capital structure, and ESG before we move on to Q&A. I will turn the floor over to Michal. Michal.
Thank you, Pavel. Please join me on page 12. I joined CPIPG along with my colleague Květa Vojtová in January this year. Our mandate is clear. First, to focus on the disposal pipeline to ensure the momentum is strong. Second, to continue improving the efficiency of CPIPG operations across all the countries where the group operates. As a reminder, in 2024, CPIPG achieved EUR 1.6 billion of disposals with average yield of 4.7%. Over the past three years, the group has completed disposals of more than EUR 3.4 billion in total. Our plan for the next three years involves additional EUR 2 billion of sales, out of which EUR 1 billion is planned for 2025 and EUR 500 million for years 2026 and 2027.
As of today, from the EUR 1 billion target for 2025, we have already EUR 800 million of deals which are either closed or completed via signed SPA or letter of intent. It means we are currently on 80% of our 2025 target. On top of that, we are in discussion with concrete buyers for another EUR 400 million of properties, which makes the EUR 1 billion target a very realistic goal for this year. For upcoming years, we have identified assets of nearly EUR 2 billion, which we are preparing for sale. This pipeline includes hotels not operated by the group, non-core office properties in Germany, Austria, or other countries, non-yielding land banks which we do not intend to develop, and other low-yielding properties.
Our strategy is to sell non-core assets while retaining those which are long-term sustainable, that are in demand by our tenants, properties which meet ESG criteria and do not require any substantial CapEx to remain competitive. Now, I will turn it over to Květa, who will briefly introduce our group's approach to managing M&A transactions.
Thank you, Michal, and good afternoon to everyone on this webcast. My name is Květa Vojtová, and along with Michal, I am responsible for Group M&A. I'm also responsible for legal matters relating to leasing and transactions across the group. My primary focus since joining the group in January 2025 has been the implementation of processes to ensure the group is equipped to effectively manage and execute our disposal pipeline. This involves streamlining our approach to M&A transactions and ensuring that we are consistently aligned with evolving dynamics of the market.
To navigate the complexities of our business and achieve success in multiple markets, we have organized a dedicated team of transactional managers who bring extensive experience in managing the M&A deals across the various countries where the group operates. Our transaction managers work closely with the local legal and business teams who have deep knowledge of the local environment. This collaboration is crucial for running multiple transactions at the same time while maintaining the efficiency and legal compliance. Currently, we are managing over 20 ongoing transactions, each at different stages of negotiation. We look forward to continuing to strengthen our group M&A efforts, ensuring that we remain well-positioned for our long-term success. This was a very short introduction for me and Michal, but I guarantee you will hear from us going forward. Now, I will turn the floor over to Moritz. Moritz.
Thank you, Květa. From a capital structure perspective, as my colleagues highlighted, we made a lot of progress, but we also lost our investment grade ratings during 2024. S&P downgraded us in May 2024 to BB+, and Moody's downgraded us in July to Ba1. Both ratings have a negative outlook, so our near-term focus is on stabilizing the ratings, while the return to investment grade will probably take a couple of years. We understand the rating outlooks are typically for 12-24 months, unless there's anything unforeseen to the positive or negative side. On the positive side, despite the downgrades, we're able to place a highly successful bond in September 2024 as a high-yield issuer, and the pricing and trading of our bonds has meaningfully improved over the last 12-18 months. The downgrades also had no impact on our secured financing, both in terms of access and pricing.
As my colleagues highlighted, we made significant progress on disposals and reduced the outstanding debt and leverage. For leverage, we're within the guidance of S&P, and for Moody's, when accounting for hybrids, that's 50% debt. As you may know, as part of our downgrade to high yield, we lost the 50% equity credit on the hybrids at Moody's, but retained the 50% equity credit at S&P. We also improved other metrics such as net debt EBITDA, which declined by 1.2- 12.1 turns. Our unencumbered assets slightly increased to 49% as pricing in this unsecured bond market improved. As David mentioned earlier, we would like to increase our level of unencumbered assets going forward. The key metric we are focusing on is repairing the ICR, with a key focus on further reducing debt through disposals, continuing with solid operational performance and focusing on costs.
Finally, we hope as rates come down and the outlook on real estate improves relatively, we will manage and get sufficient time from the rating agencies to continue on our part. Regarding our hybrid bonds, we have said multiple times that the group favors bondholder-friendly solutions. We are happy that several other real estate companies have established a good track record for how to deal with hybrids, and we plan to follow that example. Aside from dealing with hybrids, the group does not have many needs for near-term capital markets financing. We are making good progress. Now it is your turn, Petra, to discuss ESG.
Thank you, Moritz. CPIPG strives for continuous improvement in our ESG reporting. 2024 was the first year when we fully reported according to the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards.
The full sustainability statement, including EU taxonomy, will be published in a few days and will be accompanied by a limited assurance report from EY. As you can see on page 70, the group sets an ESG strategy with 16 clear goals: six environmental, five social, and five governance. The environmental part is focused mainly on greenhouse gas intensity reduction as well as energy intensity reduction and increased waste recycling rates. The social part focuses on increasing the share of certified buildings, green lease agreements being offered for all new commercial leases and renewals, and achieving a minimum 33% share of female senior managers. The governance part encompasses our group-wide code of conduct for suppliers, which is mandatory for all new suppliers and renewals, along with mandatory annual employee training of at least eight hours per year, along with the policy changes recommended by White & Case.
Moving on to page 72, in 2024, the group managed to improve our CDP score to A in climate change category. This is the highest score classified as leadership, meaning we implement current best practices and we are open about our wide environmental efforts. We are also pleased to mention that the proportion of green certified buildings continues to grow. In 2024, 39% of our portfolio in terms of GLA and 47.7% in terms of value was certified green. More than 95% of CPIPG's green buildings received a very strong certification, which means BREEAM Very Good and Above and LEED Gold and Above. We also continue engaging with our tenants by offering green leases in all new commercial deals and renewals. As at the end of 2024, for example, 34% of CPIPG leases in the Czech Republic and 44% of leases in Romania were green.
As you can see on page 73, CPIPG continues to be an innovator in sustainable financing. We started issuing green bonds in 2019 and completed our first sustainability-linked bond in 2022. In 2024, the group issued green bonds totaling EUR 1.35 billion. The forthcoming green bond impact report will be an integral part of our H1 2025 management report. Continuing to the social part, as you can see on page 76, the group had 2,536 employees in 2024 with a split of 47% male and 53% female. Top management represented 2.9% of the total workforce, with women holding 35% of the top management positions. This figure exceeds the goal to fill at least 33% of senior management positions with women. Finally, on page 77, the group disclosed our gender pay gap, which for year 2024 was 14%.
In 2024, employees completed 25 hours of training and education on average, which strongly exceeds the goal to ensure all employees participate in a minimum of eight hours of training on average annually. Now, let me turn the floor back to David to begin our Q&A. David, please.
Thank you very much, Petra. As usual, we received a good number of questions, and we hope to get some more as we go through the process, but we already have more than a dozen questions. Moritz, would you like to start by reading the first question? Are you our designated reader today? Go ahead.
The first question is, what are you planning for minority shareholders of CPI FIM? They are waiting for a mandatory bid since 2016. Martin, do you want to cover that?
Yeah, sure. Thank you, Moritz. And thank you for these questions regarding our subsidiary CPI FIM SA.
As you know, CPIPG filed the relevant documentation regarding the MTO for CPI FIM in 2016, but no decision was issued. There are no concrete plans to be communicated now. In case anything changes, we will, of course, inform the market in line with our transparency and reporting obligations.
Thank you, Martin. The next question, and I think it's a recurring question across several, how do you intend to take care of the two hybrids' first call date this year?
Thank you for this question. Moritz commented on this in his prepared remarks. We've seen very clearly that there are several paths that a responsible issuer in the real estate sector can choose in order to deal with the hybrids in a way that makes sense for the bondholders, makes sense for the company, and makes sense for the rating agencies.
There have been any numbers of examples of tenders and new issues and calls and new issues and exchanges. We are looking at all of these options. Clearly, the market activity in the last couple of days causes us to think very carefully about what the next steps will be, but we have took great pains to emphasize over and over that we want to do something that is bondholder-friendly. I think many of the bondholders who are listening to me right now have had this conversation with us many times and will continue to solicit your feedback. Right now, I would not expect anything from us at this instance, but we are very focused on this, and I think you should stay tuned for us to be proactive on the hybrids going forward.
Thank you, David. The next question, what is the outlook for the ICR? Where do you expect it to be at the end of 2025? A related question, what's the run rate for LTM EBITDA performer for asset sales?
Do you want to answer your own question?
Yeah, sure. I mean, as you all know, we don't provide a specific guidance, but if you look in the past year, what we saw in terms of the rental income lost from disposals is offset through like-for-like rental growth and contributions from development. We expect this trend to continue into 2025, so a broadly relatively stable EBITDA. The same will be also our expectation for interest expenses, so that on the one hand, we further reduce, as Pavel highlighted, significantly our cost depth.
On the other hand, the average cost of debt will continue to increase over time, and we will see some impact from the new financing that we closed or issued during 2025 and in the previous year to continue in 2025. The next question, I think we—let's see. When you talk about debt repayments, are you referring to senior notes, hybrids, or both? Is extending your upcoming hybrids an option, or are you thinking alternatives such as replacements or incentivized exchanges? I think partially covered it, but do you want to—
when we talk about repaying debt, we're talking about repaying instruments that are classified as debt for IFRS. So we're talking about bonds, we're talking about bank loans. That is when we talk about debt repayment. Now, when it comes to managing our ICR, the hybrids, they are expensive from a cash perspective, and Moody's treats our hybrid coupons at the moment as 100% debt. From a Moody's perspective, it is quite expensive debt. We do consider that as well. I would say for us, we feel as a group, considering all of the efforts around disposals and really the continued focus from Kavitha and Michal around disposals, I think we feel that leverage, we will be able to bring it back into line for investment grade very comfortably. When it comes to debt repayment going forward, we are definitely thinking about ways to optimize the ICR. We are also continuing to focus on short-term liquidity and making sure that we extend debt maturities whenever it is sensible to do so.
We're a little less focused on, for instance, buying long-term debt at high discounts in order to sort of generate equity. That's not a priority for us. We'll be able to delever naturally by disposals and by repaying debt. Really, when it comes to deploying those proceeds, we're going to focus on reducing the ICR and improving the group's short-term liquidity.
Thank you, David. I think the next question kind of—you covered it already in terms of the preference on disposals. Is the EUR 450 million of disposals in LOI or in advanced stages? Are these, in addition to the EUR 200 million, not yet closed? About EUR 200 million of cross-disposals were closed in Q1 2025, with another EUR 200 million signed but not yet closed. Over EUR 450 million of disposals are under LOI and/or in advanced stages, quoting from our—
he was quoting it back to us. Michal, do you want to answer?
Yes. Yes, the conclusion is correct. We are at the moment discussing EUR 450 million of deals where we have some concrete buyer, and these EUR 450 million is on top of the deals which are either closed or we signed SPA this year. Altogether, we have close to EUR 850 million where we have some concrete buyer or where already we closed the deal.
Thank you, Michal. The next question, are you happy with Globalworth operational performance? What is the medium-term goal with your stake in the company?
I can take that. Operational performance is stable at Globalworth, and occupancy is improving in Bucharest and in Warsaw, while I think occupancy in regional Poland still remains weak, and that would be a key focus for the management team at Globalworth. I think Globalworth dealt with Janieta and bonds last year in the second quarter, which has shifted out their maturity. I think from that perspective as well, that is quite stable. I guess at the end of the day, our JV with Aroundt own is working well. Yeah, that's pretty much—we're happy with it.
I skipped the next question because it's again on hybrids. The following question is, what is happening with the circa 3% of Berlin office spaces that is under development, and when do you plan to see it ready to be marketed? I can take that question. These are spaces which are adjacent basically to our ongoing developments in Berlin. If you may remember, some of you, we have kind of what we call those yards.
Those are several buildings adjacent to each other, and the landlords were typically our development opportunities on those properties or yards. Once the developments are completed, basically, some will be completed in summer 2025, we can start again marketing the spaces, which the team has already started preparing and working on. The next is again a bit about hybrids. Should we take the statement as a strong desire to replace upcoming hybrids? Near-term goal is to stabilize CPIPG's credit ratings with a return to investment grade within one or two years or faster if possible.
I think you should take all of our statements as a strong desire to position ourselves as an investment-grade company and a future user of the hybrid market, which means we want to have happy hybrid bond investors.
I think there's only so many ways I can say the same thing over and over, but I mean, this is how we're thinking about it. Now, of course, the way things have been trading in the last couple of days, it changes some of the calculus, but it's not that big of a move that it completely changes how we view things. Let us watch the market. We're not in a rush to do something this minute. We are keeping our eye on the timetable for both the Sing Dollar and Euro Hybrids. We are very aware of the need and the expectation by the market that we do something. So long as pricing doesn't go too far into Crazy Town, we are ready to be constructive and thoughtful about how we work out these hybrids.
Thank you, David. The next question, are you considering buying the remaining 25% of not-owned CPI Europe stock outright? By my calculation, it would cost above EUR 500 million, so I assume you would need significant debt funding, which would worsen credit ratios substantially. In case you're not considering an outright purchase, what other methods could be used to simplify the company structure further?
I'll take this one. This has been a very hot topic for some time now, and what we've tried to express repeatedly is that this is a subject we are treating very, very carefully. We have a framework agreement in place between CPIPG and CPI Europe, which allows us to discuss the ways that we can find efficiencies, improve the running of the two businesses, simplify our overall structure. This is covered under our framework agreement, and it is a regular source of discussion.
We have been examining a number of good options that will achieve the goal of simplification of the structure. I hope we will have more information about that soon, but we have already said that a fast squeeze-out of CPI Europe is not something because exactly as you rightly point out, a debt finance squeeze-out would be very negative for our company and our leverage profile at the moment. It goes against the principle of what we are trying to do. On the other hand, we want to make corporate simplification. That was a long way of saying it is still a work in progress, but please rest assured that we are very focused on the impact that anything we will do will have on our leverage and on our bondholders.
Thank you, David. The next question, do you see partial redemption of hybrids as a good way to improve ICR?
I tried to imply this earlier. At the end of the day, from an IFRS perspective, the hybrids are not in the ICR, but from a rating agency perspective, they are 100% in the ICR at Moody's and 50% in the ICR at S&P. I would say likely yes, actually. Buying back or repaying some portion of hybrids or eliminating hybrids could be a way of reducing ICR. On the other hand, we are very committed to maintaining hybrids as a permanent part of our capital structure. We would be very cautious about the amounts that we would buy back and the like. There are some rules in place for that. In general, we do see an opportunity there, both economically and also in terms of how the rating agencies treat it.
Thank you, David. The next question, do you think the recent volatility in the market may cause a delay in disposals for big-ticket items?
It's funny. I really enjoy these questions from the market because this happened, what, a couple of weeks ago when you had this announcement of this big German borrowing program and rates shot up. I remember we met a bunch of you a few days after, and we kept getting the question, "Oh, does this change anything? Does this change anything for you?" The reality is real estate has just lived through a very challenging couple of years. Frankly, the fundamentals around our market are actually still in pretty good shape around CEE. No, so far, I do not see anything in the market volatility that is going to cause a delay in our disposals.
I'd also say that big-ticket items are not how we've been getting the job done the last couple of years. The reality is we are working, as Květa said, we have 20 disposal projects going on. We're not reliant on any blockbuster disposals. Lower rates may actually be helpful overall because the financing will be cheaper. If you have good quality real estate, up and down in the stock market does not really impact whether or not an office building or a retail property or a hotel is going to perform well. At the moment, no, of course, just like you, we're watching volatility in the market, trying to figure out what it means for us. At the moment, we still feel quite good about the disposal pipeline.
Thank you.
The next question, could you please elaborate upon your thoughts, if any, regarding the significant decrease in the valuation losses that took place in Q4 2024 at large?
Look, what I can say about this is our performance in 2024 showed the value of diversification. Once again, we had some valuation losses. We had some valuation gains, and in the end, we recorded a small valuation loss. I think we feel, and very much we felt, that the real estate market, from a valuation perspective, had turned a corner. We have just survived a period of much higher rates. We have just survived a lot of periods of people questioning the uses of certain kinds of real estate. We have come through this period with people returning to the office, with consumers strong, with rates lower than they were before.
I think we feel that hopefully valuations are at the bottom or very close to the bottom. Frankly, on our side, the way to help valuations going forward, the pieces that we can control are rent, occupancy, quality, investing in the portfolio. That is what we do best. That is how we will help support our valuations in the future.
Thank you, David. I do not see any additional questions for the moment.
Maybe we were less newsworthy this year. Listen, I would say thank you to all of you. We really appreciate your interest in the group. Thank you for all the questions. If you have anything else, you know how to get in touch with us. We appreciate your interest in the group. Thank you all, and have a good afternoon.