TAGOF (TAGOF) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to the TAG Immobilien Publication of Interim Report Q2 2026 Conference Call. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Martin Thiel, CFO and Co-CEO. Please go ahead.

Yes, thanks, and good morning, everyone. This is Martin from TAG. Thank you for dialing in for our H1 2026 conference call. Let's start right away with the highlights slide, and I'm on Page 3 of the presentation. I think it's fair to say that H1 2026 was a very strong half year with results strongly up. So in absolute terms, FFO I was 9% above the previous year level, came out at EUR 100.2 million. Also, our net income from sales Poland was strongly up by 12% and FFO II consisting of the FFO I and the net income from sales in Poland saw quite strong growth at an 11% increase year-on-year. And perhaps you've already seen it in our press release that led us to narrow the guidance for FFO I 2026 at the upper end of the guidance range. So therefore, we expect FFO I more to come at the upper end of the previously announced range. Operations were well on track, and we saw increasing portfolio values with the half year valuation. So like-for-like rental growth in Germany was quite strong at 3%, in Poland, it was 2.4%, excluding the newly acquired Resi4Rent portfolio, so just for the existing portfolio that we even owned before. Sales numbers were quite good in Poland. We sold 1,350 units in the first half of 2026 compared to a little bit more than 1,150 in the previous year. Value increase in H1 in the German portfolio was at 1.5%. So that's quite similar to what we've seen in the 2 previous operations, which were at 1.4% in H2 2026 and 1.7% in H1 2025. So a trend or a continuation of the positive trend we have seen in the 2 previous semiannual operations. As we've already announced, the Resi4Rent transaction closed on 27th of May 2026 after an antitrust approval without any conditions. So we had to wait for this, as you know, for quite a long time. But finally, it came without any conditions. And therefore, we are right now in the process of integrating this portfolio into our platform, into the Vantage platform, and we can tell you that this process is proceeding quite smoothly and will be completed shortly. The final purchase price came out at EUR 575 million, and that is a 7.5% implied gross yield based on the expected net actual rent in 2026. And the portfolio was for the first time valued also like the other or like the remaining part of the portfolio at the end of the half year, and we saw a 7% value uplift compared to the original purchase price. So that means the Polish rental portfolio after this completion of the Resi4Rent transaction has now a material size with more than 9,100 units, which was, of course, then an important strategic step for us. Another important strategic step was for sure the ROBYG IPO completed, to the largest part, after balance sheet date, so in July 2026. So therefore, please be aware that most of the impact from this IPO is not in the H1 numbers, but we will give you some pro forma numbers. As a short overview, after stabilization measures, we had total gross proceeds for the group of EUR 282 million, out of which EUR 188 million was the gross proceeds on TAG level and the remaining EUR 94 million was the gross proceeds on ROBYG level. We still are the majority shareholder of ROBYG, so we are retaining a 67% stake, and we are clearly committed to hold this stake also for the longer time. As I already said, the IPO transactions are not reflected in the H1 numbers because most of that was effective after the balance sheet date. But just as a quick overview, we're expecting an NTA uplift of around EUR 55 million, so roughly EUR 0.30 per share and a quite strong LTV reduction through the inflow of the gross proceeds from the IPO by around 320 basis points. That means on a pro forma level, including the ROBYG IPO, the LTV stands at 42.2%. Yes, these gross proceeds are clearly now something that we will use for further investments. And if you ask us about our capital allocation strategy for this year, the main focus, and that's basically unchanged, will be on the further growth of the rental business. We have now not only the liquidity, but also the equity basis tool to invest. And we have basically 2 markets where we're investing as in the past: Poland and Germany. As you know, we have a kind of natural growth via construction of rental apartments in Poland via our own platform, ROBYG, on the own land bank that we own, and therefore, we'll have natural growth from simply carrying out these construction of apartments in Poland. But we're also looking for acquisitions of rental portfolio in Germany and in Poland, so that will provide us additional growth. So that's the rental business. But now more or less for the first time, also the Polish bridge to sell business, meaning ROBYG has more opportunities to grow through the IPO proceeds. So that means even though we sold a stake in ROBYG, we expect that, quite shortly, we will have higher results from ROBYG through the growth, through the IPO proceeds so that, bottom line, our proportionate results from ROBYG will also grow despite this partial disposal of shares. So therefore, ROBYG IPO, to make it short from our point of view, a win-win outcome for all segments at TAG. That's the overview. Let's look a little bit more into the details. perhaps just one short comment on Page #4. I mean you see all the detailed figures. But what I wanted to mention is the acquisitions in Germany. We acquired, basically until the last days, roughly 900 units in Germany at quite good pricing. So a gross yield of around 7.1%. There is some vacancy reaction potential. So the average vacancy rate in this portfolio is around 4.3%. Nearly all units are located in East Germany in regions that we know very well. And these acquisitions will close perhaps more towards the end of the year. So we will continue also to acquire in Germany. We are clearly a buyer of apartments, but please be aware, we will be selective and disciplined. So we will not look for growth at any price. But yes, we see opportunities. So selective acquisitions in Germany will be part of the future growth. I'm now on Page #7. This shows the bridge from net actual rent to FFO I. And as I already mentioned, FFO I in H1 2026 was up by 9% compared to the previous year. EBITDA, so the operational result was up by 5% year-on-year. That means we also had a positive impact from the net financial result, which was roughly EUR 1.4 million better as we had, for a longer time, a quite strong cash position where we have been waiting for the closing of the Resi4Rent acquisition. So we had the cash already in the balance sheet. So therefore, we will see some interest income. So perhaps in H2, you will see a contrary picture, so more stronger EBITDA growth, whereas perhaps then the net financial result is a little bit weaker, but that's then a natural change because of the closing of the Resi4Rent transaction. Next page, Page #8 shows you the development of our build-to-sale business of the Polish sales results. It was quite strongly up year-on-year, and we came out at EUR 18.6 million. If you compare it with the full year guidance, which stands at EUR 92 million to EUR 98 million, please don't be concerned that this is, on a proportionate basis, quite low, but this is a very normal course of the business. So as last year and basically all years before, you should expect that the main result is coming towards the end of the year, especially in the fourth quarter when we hand over the largest part of our apartments. So therefore, we reconfirm also the guidance for FFO II for this year because you should expect a strongly growing sales result, especially towards the end of the year. Page #9 shows the EPRA NTA development. As I said, the positive impact from the ROBYG IPO, which is roughly EUR 0.30 per share is not included yet. And still, we have a 6% growth year-on-year compared to H1 2025, even after the dividend payment, which was completely carried out in June 2026, so that's fully reflected, and after the capital increase in August 2025, which we carried out for the Resi4Rent acquisition. So therefore, also the EPRA NTA development should be on a good way. Let's take a quick look at Page #10, which shows the financing structure. Average cost of debt is now at 2.7%. We are very happy that we received 2 upgrades in rating in the last month. Firstly, in May 2026, we received an upgrade from Moody's from Baa3 to Baa2, and following the successful ROBYG IPO, also from S&P Global, which upgraded us from BBB- to BBB. And both upgrades should be a good proof for our very stable and very strong financial structure with, just to repeat this again, in the meanwhile, a quite low leverage. So pro forma after the ROBYG IPO, the LTV stands, as said, at 42.2% only. Page #11 shows the maturity profile. Looking into 2026, basically, everything is refinanced already. So we will have a larger repayment at the end of this month of EUR 470 million from a convertible bond that is becoming due, but the pro forma cash position is quite strong right now, so more than EUR 1 billion. So we had roughly EUR 0.5 billion in the balance sheet at the end of the second quarter, plus still an inflow net after all costs of around EUR 255 million from the ROBYG IPO, plus some bank loan refinancings that we did after the balance sheet date. So EUR 1.05 billion roughly is the cash position. Deducting the maturities that we have this year of around EUR 578 million, that leaves us with more than EUR 450 million of free cash that we can use for the investments, as I mentioned at the beginning, into our rental portfolio and on ROBYG level to grow the [indiscernible] business in Poland as well. Page #13 shows you the development of operational data in the German portfolio. So the vacancy rate in the portfolio stood at 3.8%. That's higher than the beginning of the year. But basically, as the years before, we expect a further reduction in vacancy rate. If you compare that with the same period 1 year before, we are already lower. So we've been 10 basis points below H1 2025. And therefore, we are optimistic that we can improve the vacancy rate as in last years in the remaining part of the year. Like-for-like rental growth, including vacancy reduction, more or less unchanged at 3%, but quite strong was the like-for-like rental growth without vacancy reduction, which came out at 2.9%. And please be aware, as always, just to a very small part, 0.3% modernization-driven. So that means we have a quite strong underlying like-for-like rental growth from rent increases for existing tenants and from tenant turnover without any CapEx spending, and that should be definitely a good sign. Page #14 shows the portfolio valuation. And as I said, a total value increase of 1.5%. And just to make this clear, this is including CapEx. So that should be very much in line with what you have seen in the peer group. Without the CapEx, this value increase was around 0.7%, 0.8%. And that's basically more or less the same valuation result that we had in the 2 semiannual valuations before. Positive trend continues. We have no outlook yet for the full year valuation, so no indications from the valuers yet. But currently, we expect a more or less unchanged valuation at year-end because our gross yield is already on a quite, let's say, reasonable level. So 6.6%, which has been now quite stable for the last valuations, should be a gross yield that is, even in this world of higher interest rate, something that still leads to positive cash flow. So therefore, from our point of view, that should be a quite resilient valuation despite the increase in interest rate levels in the past months. Page #15 shows you more details on the portfolio valuation, but let's go more to Page #17, which shows you operational data from the Polish portfolio. Here on this slide, you see the development in the vacancy rate and the like-for-like rental growth. Again, please be aware that this is the data for the like-for-like portfolio, meaning without the Resi4Rent transaction, so the portfolio that we owned before, which comprises a little bit more than 3,500 units. Still quite low vacancy level, 2.1% for all the units that have been on the market for at least 1 year, which has stabilized. Like-for-like rental growth was a bit lower, 2.4% in H1 2026 compared to 3.4% in 2025. What we observed in the portfolio is that we have more longer-term rental contracts that are linked to inflation. So more and more tenants are choosing a 2- or 3-year contract. As Polish inflation rates came down in the last months, also the rental growth, therefore, was a bit lower. So yes, lower rental growth, but of course, lower turnover also leads then to a lower cost base and less vacancy between tenant changes. So therefore, we are not concerned that the Polish rental growth is now going in the wrong direction. So we will have also more [ fluctuality ] or more ups and downs in the vacancy rate -- sorry, in the like-for-like rental growth in the future. But still, we are very much convinced that we will see sustainable growth also in the coming years. Page #18 shows you more data on the Resi4Rent acquisition. I think I already touched the most important points. So now also our rental portfolio in Poland is a significant size, 9,100 units already in the portfolio, more than 1,000 units under construction. More will follow in the next months. So you should expect that in the next 2 to 3 years, we will definitely start construction of between 1,500 and 2,000 apartments a year. So the portfolio will grow step by step over the next years. Then it comes to Page #20, which shows the Polish sales business. As I said, quite good sales results in the first 6 months of 2026, so 1,350 units sold after 1,158 units in the same period of the previous year. And as you see in the slide, knowing that the third and the fourth quarter of the year also regarding the sales normally stronger than the first half, we are very much convinced that we are coming out to the sales numbers that we predicted. So something between 2,800 and 3,000 units for the full year should be absolutely realistic. So we still see healthy demand in the Polish sales market. Sales prices remain on a high level, and that gives us confidence for the future results. Page #21 shows the revenue recognition. As said, you should expect as in the previous years that in the fourth quarter, we will have the largest part of our handovers, so therefore, the revenue recognition will pick up more and more as we progress throughout the year. Let's talk a little bit more about the ROBYG IPO, and I'm now on Slide 22 of the presentation. Again, a quick summary. ROBYG is listed on the Warsaw Stock Exchange since the 2nd of July 2026. And on this date, ROBYG had a post-IPO market capitalization of around EUR 860 million. We own still 67.1% of the ROBYG shares. So therefore, our remaining stake is valued at currently or at the IPO price, EUR 580 million. Total gross proceeds of EUR 282 million for the group out of which roughly EUR 94 million through capital increases on ROBYG level and through the sale of ROBYG shares that we conducted from TAG side, we received on TAG level around EUR 188 million gross proceeds. And that means both segments, so the build-to-sell segment, meaning ROBYG, and the rental segment, meaning the German business and the Polish rental business have now the possibility to grow. So ROBYG has now significant equity from the gross proceeds from the IPO, is able to buy further land plots, is able to grow stronger than in the past. And as already mentioned, from the sale proceeds from the ROBYG shares that we received on TAG level, we can increase our German and Polish rental portfolio based not only on liquidity, but also based on the equity that we have from the sale of the shares now in the balance sheet. As said before, the LTV will be reduced quite significantly after the IPO. Page #23 shows you again the pro forma data. So the main impact on the balance sheet, as said, roughly EUR 55 million is the NTA accretion translating into roughly EUR 0.30 per share. And if we look at our total investment that we have done at the value appreciation since we acquired ROBYG in 2022, meaning the cash proceeds that we now realized, the remaining stake that we still own of 67%, where the value is even higher than the total acquisition cost for the 100% stake, we achieved a value appreciation for the total investment of more than 40%, which would be a quite strong result. One comment on the FFO guidance, our FFO II guidance for 2026. So this remains unchanged. So far, we have only deducted minority interests on project level, and this will be unchanged for 2026. For 2027 onwards, we will change the reporting. So we will deduct the ROBYG minorities from our FFO II or from our Polish sales results. But this will then lead, on the one side, to a reduction in our Polish sales results this year. But as we expect, based on the IPO proceeds on ROBYG level, a quite strong growth, we think that this dilutive impact only lasts 1 year. So that means from 2028 onwards, based on stronger growth, even based on a lower stake in ROBYG, we should have, again, higher results on our Polish sales business. So therefore, as I said, that should be a win-win situation for all our segments. Page #24, and that's the final conclusion from the ROBYG IPO, shows you that now based on a market valuation of ROBYG and therefore our stake in ROBYG, we're able also to value, as a kind of sum of the parts valuation, at least the implied market valuation for our rental business. So just another example here shown based on the market capitalization. At the end of last month, we had a total market capitalization of around EUR 2.6 billion. Deducting the value of our stake at the end of July 2026 in ROBYG, the actual implied market valuation for our rental business of a little bit more than EUR 2 billion only and then comparing that with the upper end of our financial year 2026 guidance for FFO I that we published today as the more precise outcome of the guidance, we're ending up at a 10% FFO I yield. So therefore, that should be still a valuation level where an improvement should be possible. So the ROBYG IPO also makes more visible what our value in this Polish build-to-sell business is and also what at least the implied market value on the rental business is. So we are operating still on a very high FFO I yield. And then finally, guidance on Page 26. As I said, all guidance for financial year 2026 is confirmed. And after the strong H1 2026 results, we expect now that FFO I for this financial year is coming up now at the upper end of the guidance range, so more towards the EUR 197 million. That's it for me as an overview for the H1 results. Thank you so far for listening, but I'm now very happy to take your questions.

[Operator Instructions] The first question comes from Marios Pastou from Bernstein.

I've got 2 from my side. I'll ask them one by one. So firstly, I think you've allocated -- sorry, had quite a few allocations of capital, reallocation options, post-ROBYG. Of course, German resi acquisition has been started. But what are you currently tracking in Poland on the acquisitions front? How should we think about timing here? And then similarly, what about the ramp-up of potential build-to-hold developments, now that you've got that enhanced capital? I think you were previously ramping this up to around 2,000 unit completions in 2028. Could you, in fact, go faster now?

Thank you for your questions. That's indeed an option also to ramp up the own construction and the build-to-hold segment in Poland. To be honest, the biggest obstacle there is to receive the building permits quickly. So that's that kind of pain, which is not completely new. So you should assume that, I think we have a land bank for further 6,000 units, as soon as we get the building permits, we will start construction. And therefore, we have also more flexibility. So meaning if we get building permits in the next months and quarters faster, yes, we're also happy to start with the construction of more than 2,000 units if possible. So therefore, that's the -- let's say, the focus of the future growth, clearly building apartments on the own land bank. And regarding potential acquisitions in Poland, yes, of course, we keep our eyes open, and you can assume that we are in the market, and there will be also acquisition opportunities in the future. We are hesitating to guiding you or the market towards timing, so you should not perhaps expect something in the short term. But as we said in the previous calls and discussions, if we look at the market, we know that a lot of market participants are on the market with an exit horizon that perhaps is ending 2027 or 2028. So there will be opportunities, and we are clearly a natural buyer of these assets. And if we achieve reasonable prices, we're also happy to buy, in Poland, existing portfolios. But just to make it clear again that, at base case, the natural growth is coming from building apartments on the own land bank.

That's very clear. And then just switching slightly to the like-for-like rental growth in Poland. You mentioned some fluctuation here. Can I just double check what caused that reduction quarter-on-quarter in terms of the actual growth level and whether we should actually anticipate this trending more in line with that 3%, 3.5% expectation over this year with maybe some -- a bit of a stronger H2? Or what are your expectations here?

Yes, happy to explain this a bit more. So firstly, in Poland, we are in an unregulated market. So that means if we need to make estimates about rental growth, we always have a swing to the upside and to the downside, not so -- and which is more difficult to estimate, for example, compared to Germany, where it's regulated and we know some basis points up and down, that's the maximum swing. Firstly, we are still very much convinced that we will see very strong and good rental growth in Poland in the future. So when we look, let's say, at average rental growth in the past years, that was perhaps between 3% and 4%, and that should also be a good expectation for the next 2 or 3 years. Now what we have seen, and that's what I tried to explain some minutes ago, that we have more tenants in our Polish portfolio that choose a longer time rental contract, which is good, right? So they're going for a 2- or 3-year contract not only a 12-month contract. And that means the turnover is going down. So we have not any vacancy between tenants. So we're not losing normally a monthly rent for tenant changes. So a very constant rental income. But on the other side, these rental contracts are normally linked to inflation rates, which are, then in Poland, below 3% currently, which is also good, but then also leads to a somewhat lower like-for-like rental growth in Poland. But again, we are not concerned that we now enter a weaker market phase in the Polish rental portfolio. Just look at the vacancy rate for all apartments that are on the market since more than 12 months, which is still very, very low at around 2%.

The next question comes from Andrew McCreath from Green Street.

I also have 2 questions, please. I'll ask one by one. Firstly, just coming back to capital allocation, and as a follow-up from Marios' question, I appreciate your comments at the beginning, Martin, but I just want to follow up here. So as you lay out on Page 24, the rental business is trading at a 10% implied FFO I yield. Would it therefore not just be a better use of capital on an equity return basis to instead just buy back your own shares rather than acquiring in Germany at a gross 7% or building in Poland?

Share buyback, I would say, is not yet on the table. And you're right. If you look at current implied valuation, 10% would point toward a share buyback. But let's look at the next 3, 4, 5 years. And yes, perhaps the initial yield for a portfolio acquisition in Germany or from a finished construction of a Polish rental portfolio is lower, but we are convinced that these portfolios provide strong cash flow growth, meaning we will have good rental growth. We will have, perhaps in Germany from the portfolios that we are acquiring, also value -- sorry, vacancy reduction upside potential. We will also have, especially in Poland, a good value growth. So we are constructing these apartments at a 7% to 8% gross yield, that's afterwards valued at, call it, 5.5% or 6% gross yield. So right now, we think carrying out these investments is something that makes sense. Let's hope that the share price is going in the right direction. But as you know, we have done share buybacks in the past. So that's not excluded. Currently, as you see from my quite long answer, it's not the first strategy we have. Let's observe this. And that's something to follow up in the next quarters. But hopefully, our current capital allocation strategy is something that really also leads to a better share price development.

Okay. That's helpful color. And then my second question is just on vacancy in the German business on Page 13. You had a reduction contribution of 10 bps to like-for-like in 1H against a 30 to 50 bps guide for the full year with vacancy itself up 60 bps since year-end and 20 bps quarter-on-quarter. Correct me if I'm wrong, but I believe vacancy is typically flat between 1Q and 2Q in the portfolio. So it would just be helpful, I guess, to understand what the main driver is here? Is it mostly from acquisitions? And then also, are you still confident with the guidance on this line?

Yes. Firstly, we are still confident with the guidance on the vacancy reduction. And yes, you're right, also the acquisitions that we have had an impact of perhaps 10 basis points. So then perhaps I would not look too much on the less basis points. So that's excluding acquisitions, vacancy rate is flat, which is, I would say, normal development between the 2 quarters. So therefore, we're not concerned that this is now going in a different direction. So H2, as in the past years, should also hopefully, in terms of vacancy reduction, be a good second half.

The next question comes from John Vuong from Van Lanschot Kempen.

I just want to follow up on your comments on potential redeployment of proceeds. If I look into your acquisitions in Germany at a 7% yield, it comes in quite comparable to your acquisition yields in Poland. So how do you see the risk-adjusted returns from your opportunity set because the risk profile is quite different looking at how Germany is regulated and Poland is unregulated?

Yes, you're right. So basically, we are acquiring or building at a quite similar gross yield. So you can argue, well, Germany as a regulated market is even at a lower risk, which is correct. But if we really look bottom line, after CapEx, of course, the Polish portfolio is very strong, right? So it's not only that we have a good EBITDA margin because maintenance costs are more or less 0. Also, there's no CapEx needed. And we are buying in Germany, nothing distressed. But as typical for buildings that are some years old, we have to invest from time to time. That's not needed in Poland. It's all new. So therefore, the cash flow bottom line is very strong, and that should be then something that outweighs the, let's say, a little bit higher risk because it's an unregulated market.

Okay. That's clear. And then on your leverage. So the proceeds are going to lower your pro forma LTV to 42%. I appreciate that the target LTV is 45%. But given rate volatility in this market, could you talk about how much firepower you have and how you balance redeploying the proceeds with your leverage?

If I try to keep it really simple, so after the repayment of the debt that is now due in the next weeks, we have a remaining cash position of, call it, around perhaps a little bit more than EUR 400 million, out of which, in round numbers, roughly EUR 100 million are available on ROBYG level, that's basically the IPO proceeds, and roughly EUR 300 million are available on TAG level. That's basically something that we can use for further investments in the rental portfolio. If we would fully redeploy this into new land bank, new portfolios, then we would end up again at an LTV, which is exactly our LTV target of 45%. So that's what I've tried to explain that we have now really flexibility to acquire and to invest, not only from a cash perspective, also from the LTV perspective. But please be sure that we are not getting, how shall I explain it, nervous and try to invest it as fast as possible. We, of course, need to be disciplined. And by the way, the cash is currently working. So most of that is in stock yield where we get 3.7% interest income. If we wait with further debt refinancing, we are saving more than 4% interest cost. So therefore, I think we have some months and quarters to reinvest this into acquisitions, that really makes sense, into constructions, as I mentioned, on our own land bank for Polish rental portfolio. But good to have this opportunity that liquidity and equity is there for further investments.

So just to understand it correctly, we'd probably see LTV go back towards 45% in, say, 12 months from now?

That depends, John, on how fast we are reinvesting this. What I tried to explain is if we would theoretically reinvest it tomorrow in full, we would still be at our LTV target. Perhaps that's a better way to explain it.

The next question comes from Nicolas Vaysselier from BNP Paribas.

Hopefully, you can hear me. I have 2 questions. The first one is on your FFO guidance for the year. So you've already achieved about EUR 100 million in H1. Arguably, you will have more positive contributions in H2 from the R4R portfolio and potentially some positive contributions as well from your acquisition in Germany. So why not raising the full year guidance, given the run rate pace? And then my second question would be on the Poland development to sell business. So you are expecting an acceleration of handovers and therefore, revenue recognition in H2. It seems like, in Germany, this has been a common feature of the results season across your peers to see some acceleration on those businesses in H2, but the transactional environment remains difficult there. So I was wondering what you're seeing in Poland in terms of health of the development markets and transactional environment this year and going into H2?

I'll start with the second question. An important fact is that from the handovers that we expect to come, especially in the fourth quarter, but also to a larger part in the third quarter already, most apartments are already sold. So the only risk that we have for the balance sheet is if they can really finish construction before the balance sheet date, hand it over and can realize the profit. So I don't have the exact number in my head, but I assume that's something -- 90%, 95% of the apartments that we're handing over this year is already sold. So we're not exposed to market risk. We simply need to carry out the construction and hand it over. And that was, by the way, the same situation in the last year. So we have, regarding this Polish build-to-sell business, always a high visibility on results for the next, let's say, 12 months. And that's perhaps a difference to a business in Germany, where we're selling apartments in a privatization program, we are really exposed to future sales here if these apartments are already sold. And regarding your comment on the FFO I guidance for 2026, perhaps it's fair to say that it's not aggressive if we say we will end up at the upper end of the guidance range. But firstly, the acquisitions in Germany, they will kick in mostly or to the very last part in 2027. So closing of these acquisitions will be mostly towards the end of the year. Secondly, it's always good to have a little bit buffer for perhaps higher maintenance costs that are more seasonal in H2. But again, your comment has also a point. So therefore, we should be well positioned also for the guidance, even if we say we are coming up at the upper end of the range.

The next question comes from Thomas Rothaeusler from Deutsche Bank.

I think I have 3 questions. The first one is on the ROBYG IPO proceeds and capital deployment. You say the main focus is on rental business, both in Poland and Germany. Just wondering what's the targeted mix between both countries regarding capital allocation. And the second one is on the Resi4Rent portfolio. The first time revaluation puts it at about 7% gross yield, I think based on my calculations, while your Poland portfolio is valued at much lower yields. Just wondering what's the reason for the valuation gap? And my last question is also on ROBYG. You expect an acceleration of the sales business with the IPO proceeds. So what's the sales run rate you expect compared basically to the previous levels?

Yes. Thomas, your first question was regarding the mix of investments of rental -- in our rental portfolio, whether this is more Germany or Poland. We are really here completely focused on, let's say, the numbers. So we would also be happy to buy in Germany a larger portfolio if the numbers make sense. So if we have something in the size of the Resi4Rent portfolio in Germany, just as an example, on the market in regions that we know very well at a yield that is on the level that we had now in the last acquisitions of a reasonable construction quality, yes, we are happy to buy it. But as I said, we will be selective here and we will be disciplined. And we can be disciplined because we have this natural growth plan from units that we will construct on our own land bank. So even in, let's call it, theoretical case, if we would acquire nothing, we would still grow because we will have these constructions on our own land bank. So we look at both markets. In the last years, investments in Poland have simply given us better opportunities, like the Resi4Rent portfolio, which was, looking back, for sure, a good deal. So we have really now the opportunity to look at both markets, and that's what we will do also in the future. And then you've got the question on the yield for the Resi4Rent portfolio. Yes, it's correct. We acquired that at a 7.5% gross yield. Valuation brings this now close to 7%. The remaining portfolio has a lower yield. Firstly, as I think we explained before, the Resi4Rent portfolio has also a different structure. So smaller apartments, higher turnover. So this will naturally lead to a somewhat higher yield. But also, to be open, I think we've got also some potential for further valuation uplifts in the next, let's say, 1 or 2 valuations because it's also clear that after you sign such a valuation, you set a kind of market price. So therefore, a huge valuation uplift would be something which could be a kind of contradiction to the price that we actually paid. So let's just wait the next 1 or 2 valuations and let's see where the Resi4Rent portfolio in terms of gross yield stands, so there should be further improvement possible. And yes, we will give guidance basically with next results also on the sales numbers that we expect in ROBYG or for our sales business in Poland. For this year, in round numbers, we expect sales of around 3,000 units. There's definitely room to improve that. So ROBYG has sold, for example, in 2021, more than 4,000 apartments. So why not go back to this at least in the midterm. So therefore, the market is there. The platform can do more. And that's also why we think that the sale of our stake in ROBYG will have, perhaps in 2027, just concerning the sales results in Poland, a small and dilutive impact. But with the help of the IPO proceeds, the ROBYG business will grow faster, and we will have, then in absolute amounts, a higher profit from our sales business in the future compared to the situation without the IPO. So we are still very much convinced that this sales business in Poland is going very well also in the future.

The next question comes from Ulrike Dauer from Dow Jones Newswires.

First of all, I would like to know the valuation result. Why did it [ halve ] in the -- well, did it [ halve ] in the first half compared to the previous period? And also, are you able to specify net proceeds from the ROBYG IPO? And my last question would be, have you also experienced higher financing costs as some or probably most competitors do right now?

Of course, happy to answer the questions. With the valuation results, if you look in the P&L, it is indeed lower than in the first half of 2025, and that's not so much coming from the German portfolio. That's mostly coming from the Polish portfolio where we saw a stronger valuation uplift of the existing like-for-like portfolio in 2024, 2025 on the back of strong sales price growth, which was, in Poland, for some 2 or 3 years, exceptional high. So this also then was reflected in the valuation. So we have still a positive valuation result in Poland, but lower than that as sales prices are still growing, but not in the double-digit numbers than in the year before. So that's the reason of the somewhat lower valuation results, which is again still positive. Yes, the IPO costs, we can give you a rough amount of the total IPO costs that have been the bank fees, lawyer fees and so on, and it should, in total -- so on a ROBYG level, on a TAG level, estimated is around EUR 10 million. So when we're talking about gross proceeds of EUR 282 million, the net proceeds should be roughly around EUR 272 million. And the final question was higher financing costs. And the answer is yes. So also, we see the higher financing costs not because of increased margins. To the contrary, if you look, for example, at the development of our bond margins, they're coming down, but the risk-free rates are higher. So we're currently financing for 5 years, I would say, slightly below 4%. For 10 years, it's slightly -- for 5 years, it's slowly below 4%. And for 10 years, it's slowly above 4.5%. But we have a portfolio with high yields, so 6.6% gross yield and roughly the same yield meanwhile in Poland, where we really are able to achieve positive cash flows even in this higher interest rate environment. So therefore, we think we're very well positioned even after the increase in the interest rates.

The next question comes from Kai Klose from Berenberg.

First question on the CapEx investments. You have mentioned somewhere in the H1 report that for the first time, you also had capitalized personnel expenses in Germany. Could you indicate for which segment this was and how much and how much we can expect going forward? Second question was in general, the modernization CapEx increased by about EUR 10 million year-on-year. You mentioned also somewhere in the report it was for large scaling measures. You could also elaborate a bit more what -- in which regions and what volumes we can expect going forward? And the last question would be on the LTV calculation. The contribution from joint ventures went down. Was it because of the project that's completed compared to previous year or were there other reasons?

First, perhaps on the capitalized personnel costs, the amount from German business is quite small. So we are now -- it's not completely new, but since, I would say, 1 or 2 years, are investing also a little bit more in larger modernization measures. So therefore, we started now also to capitalize the cost for people, for our own workforce that are exclusively managing this, so from a technical department. I think in the first half of this year, it was around EUR 500,000. So the very largest part of capitalized personnel cost is still coming from Poland, where we have a large construction department, where we have the engineers and the architects who are purely working on the processes. So the German contribution is quite low compared to Poland. And then, Kai, you need to help me regarding your question from -- regarding the LTV, if you can repeat it again. It was something in connection with the joint ventures?

Yes, if possible, from JVs. I saw that it was lower compared to last year. Was it that some projects you did together in Poland were completed or were there other reasons?

Yes, that's -- so in the relevant gross asset values for the LTV calculation, we also report our investments in joint ventures because they are completely project-based joint ventures. And when some investments are completed, so when apartments are handed over, then the cash is distributed to the parent company, in this case, ROBYG. So it means our share in the joint venture is reduced as we have received the cash. So therefore, it's then lower compared to the previous period. That's correct.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Martin Thiel for any closing remarks.

Yes. We can only say many thanks for your questions. Many thanks for dialing into our conference call. As always, if there's anything left, please feel free to contact us. We are very happy to answer additional questions. That's it from our side. Have a good day and looking forward to seeing and speaking to you soon. Bye-bye.

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