Ctp NV

AEX:CTPNV

Earnings Call Analysis

Strong Growth and Positive Outlook for CTP in 2024

CTP reported a solid 15.9% increase in gross rental income to EUR 488.4 million for the first nine months of 2024, with a like-for-like rental growth of 4.4%. The company aims for an annualized rental income of EUR 1 billion by 2027. Adjusted EPRA earnings per share rose 11.7% to EUR 0.60, on track to meet the guidance of EUR 0.80 to EUR 0.82 this year. With 27.1 million square meters of land, CTP's future development is robust, showing an expected yield on cost above 10%. The company confidently anticipates delivery of 1.2 to 1.3 million square meters this year, maintaining a healthy cash position of EUR 1.3 billion.

Strong Operational Performance

In the first nine months of 2024, CTP has demonstrated robust operational performance, with like-for-like rental growth of 4.4%, driven predominantly by indexation and strong rent reversion strategies. The occupancy rate remained stable, signaling effective management of existing properties. As the company capitalizes on its reversionary potential—currently standing at 15.1%—it continues to gain from leases nearing expiry. The gross rental income surged by 15.9% year-on-year, reaching EUR 488.4 million, while net rental income experienced an 18.3% increase, driven by improved service charge management.

Ambitious Revenue Targets and Guidance

CTP intends to significantly scale its revenue, targeting an annualized rental income of EUR 1 billion by 2027. Currently, the annualized rental income stands at EUR 702 million. For adjusted EPRA earnings per share, the company is on track to meet its guidance of EUR 0.80 to EUR 0.82 this year, reflecting an 11.7% year-on-year increase to EUR 0.60.

Strategic Land Use and Development Potential

The company possesses a massive land bank of 27.1 million square meters, with plans to develop over 3 million square meters of lettable area. They maintain an effective cost structure with construction costs at EUR 600 per square meter and a current real estate portfolio valued at EUR 1,000 per square meter, allowing for a prospective profit margin of EUR 400 per square meter on developments. Given this, CTP anticipates continued organic double-digit growth in net tangible assets.

Ongoing Growth and Expansion Planning

For the fiscal year 2025, CTP forecasts 1.2 to 1.7 million square meters in new developments, maintaining a healthy growth trajectory of slightly above 10%. Management is optimistic about sustaining this growth rate even amidst changing market dynamics, especially with ongoing demand from existing tenants accounting for approximately two-thirds of new leases. In 2024, the company has already signed more than 1.5 million square meters in leases, a 5% increase from the previous year.

Solid Financial Position and Future Investments

With a cash position of EUR 1.3 billion and a robust total liquidity of EUR 1.8 billion, CTP is well-equipped to meet its cash flow needs for the next year. Following a recent equity raise of EUR 300 million, the company aims to make strategic acquisitions across Europe, particularly focusing on Germany and Romania, taking advantage of recovering transaction markets. Their average debt cost is currently 2.7%, projected to gradually increase with new funding, though the company has successfully reduced its marginal cost of borrowing.

Market Dynamics and Future Outlook

CTP remains positive about the future growth prospects in Central and Eastern Europe (CEE), driven by a solid market position and expected demand shifts due to geopolitical trends. The automotive, semiconductor, and consumer goods sectors are increasingly moving operations back to Europe from Asia, further fostering a conducive environment for growth. Management has observed that inflation-adjusted real rents in CEE are still lower than in previous years, indicating significant rental growth potential amid improving market conditions.

Earnings Call Transcript 2024-Q3

[Remon Vos, executive]

Good morning, everyone. It's Remon Vos speaking from Prague with an update on the first 9 months of 2024 has been good, and we continue to see strong operational and financial performance. So this year has been good so far. I expect also Q4 to be very strong. We are working on a number of deals, which we hope to close before year-end. Core business, City Park Network, full-service business parks and which we continue to extend and grow mostly with existing tenants. Tenants are happy. They continue to extend their business. And when looking at new deals, approximately 2/3 of all new lease agreements are being signed with existing tenants. which is good in line with our target. We've done more than 1.5 million square meter of leases so far this year in 2024, and that's up almost around 5% compared to the 2023 number.

And as I said, looking forward to Q4 seems to be or promising to be a good quarter for us also in terms of take-up. And with that, CTP remains market leader in most of the CEE countries, so the 4 countries where we started, Czech Slovakia, Hungary and Romania, but also market leading in Serbia and also quite positive about the Polish market. also have seen some take-up in Amsterdam at our City Park Amsterdam project in the Harbor of Amsterdam, which is very positive. A couple of leases signed. Yes, demand comes from existing clients, as explained, mostly CEE as a business smart location in Europe and has been, but also nowadays, when there's a bit more pressure on cost, you see more companies moving to Central Europe.

Labor cost is not the only thing. It's also productivity, it's the location, the newly developed infrastructure and also definitely the culture, the overall business smart attitude, I think, also from local governments, et cetera, which we enjoy here in Central Europe, which makes many companies successful and continue to grow in this part of the world. Some of our clients come from Asia, I just returned from a 10-day trip, I have been to obviously, to see our Taiwanese clients in Taipei, involved in semiconductor business.

We are doing multiple projects for them in the Czech Republic, but also in other countries in Germany, for instance, also met many of our Chinese clients who decided to bring more activity to Europe. It's in Europe for Europe. So they derisk their footprint or supply chain, also decarbonize and need to be in Europe for their European business. And there's all type of different industries, which we see come from Asia to set up business here in Central Europe for European market. And yes, that is also because of geopolitical and other reasons, and that is a trend which we believe will continue. Defense industry is another driver. But also, we see demand coming from the consumer FMCG or fashion retailers, which we do a number of projects for out of Bucharest, you can now supply the region, which includes Greece, which includes part of Turkey, Bulgaria, Serbia.

So I think BusinessSmart also means well-developed infrastructure road networks, et cetera, et cetera. I mentioned automotive also because of Asian companies coming to Central Europe for automotive. They follow big carmakers like Volvo, who are doing a 1-point-something billion project in East Slovakia, BMW, who are building a factory in Hungary invest more than EUR 2 billion and also Volkswagen, their best plant, as they say themselves, is in Bratisla, Slovakia, and they recently invested more than EUR 1 billion. We are involved in those big projects. We are involved in helping to accommodate some of the suppliers. If you look at automotive, our exposure, I think, is around 20%. The past 12 months, I think the amount of leases we signed related to automotive are a bit down, I think, 16%.

The companies involved in automotive industry for us also means aftermarket. So you have companies who store tires, Bridgestone, Continental, Pirelli. We have a couple of them in different parts, brake pad producers also for aftermarket, it's all -- that was all what we think is automotive. We don't have any engine producers or something like that or gearbox producers in our portfolio, but we do have companies who produce interiors, car interiors, for example, airbags or dashboard or even car seats. Yes, we have them and they're quite successful. They like to be close to where the big carmakers are. And yes, we continue to see a trend of business smart, which also means some more expensive countries moving into the Central European region.

We have seen that before. As I said, just returned from Asia. Also, if you look at the technology and autonomous driving and the different carmakers and yes, the electrical cars, et cetera, et cetera, there is fantastic and huge opportunities in that industry because of the change. And I think CTP will continue to benefit from all of that extra demand coming from this change going forward. before I hand over to Martin summarize shortly, our business lines, operator, of course, is the income-producing part of the business, good quality buildings, which we work hard to keep them in an excellent condition, all BREAM certified. Operator is good. We continue to add solar panels on the rooftops. And we've been able to go till almost 13 million square meters of lettable area, which is good for EUR 700 million of rental income per year with many different businesses and companies in those properties, tenants, I mean, more than 1,000 blue-chip tenants from all over the world involved in all different range of industries.

That's one. Then the developer, mostly, of course, continue to build land, which we have in existing business parks, so land with infrastructure permits, et cetera. And those projects are being done by local teams on site. project managers, et cetera, construction teams, and they continue to build properties in different sizes, extensions, but also new developments and new projects for new companies, which is also very important because keeping your existing tenants happy is one thing, but acquiring new business is also another thing, which is very interesting, and we are working hard on that, which often comes through the ecosystem, people we know. The developer almost 2 million square meters under construction, 75% of that in existing business park. When we lease that up, there will be another EUR 140 million of rental income. And we are continuously leasing up the space which we have under construction.

There's some pre-leases. There -- we are leasing while we build, as you know. Yield cost continues to be north of 10%. And we expect upon completion that we'd be at 80%, 90% occupancy when these buildings are complete. That's for the developer. I mentioned solar, 120 megawatts installed by year-end. This doesn't mean that everything is operational. Sometimes it takes time to get all the permits in place and to start producing energy. Installing solar -- rooftop solar plants is one thing we do that. At the same time, we install smart metering systems. So we know exactly in a business park, what different tenants consume at what time of the day. So we do energy management. So also we then know better if we produce solar energy, then when do we use it, where do we use it, when do we sell it to improve efficiency, but also obviously, to look at results and how we can run that business in a better way that's happening at the same time. So happy to answer any of your questions. I think for now, I'll just hand over to Martin and Richard later. Thanks for joining and your support. Thank you.

[Richard Wilkinson, executive]

Moving on to our financial highlights. The like-for-like rental growth came to 4.4% in the first 9 months of '24, driven by indexation and strong rent reversion. Occupancy at the quarter end remained stable, while the reversionary potential now stands at 15.1%, and we have proven to be successful in capturing this potential for the leases that came up for expiry. Our gross rental income for the period increased by 15.9% year-on-year to EUR 488.4 million. The net rental income went up by 18.3% year-on-year as we reduced our service charge leakage. Consequently, the NRI to GRI ratio came to 97.4% in the first 9 months. Annualized rental income increased to EUR 702 million, illustrating the strong cash flow generation of our standing portfolio. and we target to reach an annualized rental income of EUR 1 billion by 2027.

The company-specific adjusted EPRA earnings per share increased by 11.7% year-on-year to EUR 0.60 on track to reach our guidance of EUR 0.80 to EUR 0.82 for the year. CTP's strategy is built upon long-term client relations, around 2/3 of our developments taking place in existing parks for existing tenants. This derisks our business model as these are proven locations with existing tenant demand, and it feeds well into our valuations and the huge opportunity we have with our 27.1 million square meter land bank. Assuming a 50% build-up ratio, we can build over 3 million square meter of lettable area on our current land bank. Taking into account the average construction cost of EUR 500 per square meter and land prices of EUR 50 per square meter, the total investment cost for 1 square meter of GLA comes to EUR 600. This, the standing portfolio, excluding the former Deutsch Industry REIT, is valued at EUR 1,000 per square meter, which allows us to realize a potential development profit of EUR 400 per square meter.

This also enables us to continue to generate organic double-digit NTA growth also in the years to come. Now looking at the valuation results. For the Q1 and Q3 results, only the investment properties under development are revalued. In the third quarter, the revaluation amounted to EUR 167.4 million. driven by the leasing and construction progress on our developments. This brings the year-to-date revaluation to EUR 604.1 million. CTP's reversionary yield stands at a conservative 7.2%. And looking ahead, after the 80 basis points increase we experienced in the last 2 years, we are at a clear inflection point for yields. And we do foresee further positive EUV growth in the Central and Eastern European region. In most CEE markets, inflation-adjusted real rents remain lower than 15 years ago, illustrating the affordability of the region for our tenants as well as the rental growth potential.

Our EPRA net tangible asset per share increased from EUR 15.92 at year-end '23 to EUR 17.52 as at 30th of September 2024, representing an increase of 10.1%. And now I hand over to Richard. We have a robust balance sheet and strong access to multiple pools of capital. In 2024, we raised EUR 300 million of equity through an ABB in September and EUR 1.8 billion of debt, of which EUR 1.3 billion was unsecured with the remainder being secured. Over the past 12 months, we have made attractive accretive acquisitions, particularly in Germany and in Romania. And we anticipate allocating the proceeds of the September equity raise into further accretive acquisitions over the next 12 months as we see transaction markets recovering across Europe. Our cash position stands at EUR 1.3 billion, more than sufficient to meet our cash needs for the next 12 months. When including our RCF, our liquidity position amounts to EUR 1.8 billion.

The average maturity of our debt stands at 5 years with no material debt maturities until June 2025. At the end of the third quarter, CTP's average cost of debt came to 2.7%. This will continue to tick up going forward as we bring on new funding at today's higher interest rates to finance our development-led growth. However, we have seen our marginal cost of financing come down during 2024. And depending on the maturity, this is now around 4%. Thanks to our strong cash-generating portfolio, we have a healthy interest coverage ratio of 2.75x, while our normalized net debt-to-EBITDA reduced further to 9x. As shown during our recent Capital Markets Day, thanks to our development yield on cost of over 10%.

Each euro we invest in our pipeline improves both our ICR and net debt-to-EBITDA ratios. Following our recent equity raise, our loan-to-value ratio is now back within our target range. Our LTV will come down further as our development pipeline is completed and the revaluation gains become fully booked. Looking ahead, we are confident in the outlook for CTP. We have a strong tenant lead list. And in addition to what we have already pre-let in our development pipeline, we have nearly 180,000 square meters pre-let for future projects where we have not yet started construction. We continue to see rental growth across our markets as well as nearshoring speeding up in many industries.

Our pipeline is highly profitable and tenant-led. And thanks to our industry-leading yield on cost of over 10%. We are able to deliver sustainable and profitable organic growth while maintaining our strong financial position. We confirm our EPS guidance of $0.80 to $0.82 for 2024 and expect to deliver 1.2 million to 1.3 million square meters of developments this year, in line with our long-term growth targets. Thank you for your attention. We now welcome your questions.

[Operator]

[Operator Instructions] our first question is from [indiscernible] from Bernstein.

[Unknown Analyst]

I've got 2 questions from my side. Firstly, you hinted at it in the presentation. Maybe going into a bit more detail on the allocation of the proceeds of the recent capital increase. It sounds as though you're seeing better opportunities in the acquisition of existing assets. Can I check where these are coming through across your locations? Or are you seeing land opportunities as well? And then secondly, just on your tightened guidance range for development completions this year. I think in the last call, you hinted that it could be closer towards the upper end of the prior guidance. So is there anything specific here driving this tightening?

[Richard Wilkinson, executive]

Thanks for the question. Regarding the allocation of the ABB, yes, I mean, we had already invested some of the money in Q4 of last year when we were buying in Germany in Q2 of this year when we were buying in Romania, and we continue to see a number of interesting opportunities. That is across the network. So I wouldn't say that it's specific to one region. I don't know if Remo wants to add anything specific there. But generally, we see an increasing amount of interesting opportunities for us to continue to grow our development pipeline, but also acquire assets and land at interesting prices. And as we said in the presentation, we are expecting to be fully allocated on that within the next 12 months. And regarding the development completions, we're at the start of November now. So we have clear transparency on what we're going to deliver this year. We will be within the 1.2 to 1.3 range. So we thought it was sensible to tell the market that that's where we're going to be. But we had 1.9 million square meters under construction at the end of Q3. So the other 600,000 are coming on during the next months. And whether they come on in Q4 of this year or they come on in Q1, Q2, Q3 of next year, there's a small timing difference. But overall, the trend towards us continuing to deliver a material amount of highly accretive 10% plus yield on cost developments continues.

[Unknown Analyst]

Okay. Very clear. So this is more just revising the pipeline slightly for demand rather than anything specific to a particular project?

[Richard Wilkinson, executive]

I wouldn't call it demand per se, but it's just -- it's a combination of when we are finishing the construction and when the tenant is moving in. And for us, whether they move in 1st of December or 1st of March doesn't really make a big difference in the growth scheme of things.

[Operator]

We have a question from [indiscernible] of Kempen.

[Unknown Analyst]

I have one question. So in an interview for local newspaper, you mentioned that clients are asking about opportunities in Mexico. What are your thoughts about growing outside your current geography also aside from Mexico?

[Remon Vos, executive]

Yes, that's me speaking, Remon. Yes. So the business now is 10 countries, and that's where we focus on. We have many good projects and a lot of land, and that's where we're busy with. That does not mean, however, that we're not going to look at other markets. And as we have done and as we have been able to grow always with existing tenants. So demand comes from tenants. And obviously, as I explained, our tenants are changing their global footprint when it comes to where they manufacture for what markets, et cetera. And they're derisking and decarbonizing that. That's why we see different changes and shifts. And obviously, there are tenants asking whether we would develop for them in Mexico. So far, we have -- no, we have nothing in Mexico. But we could definitely look at and we will look at other markets. And -- but I'm not sure whether it's Mexico or not, but we will -- we always do keep an eye open on where we see opportunity. And so I would not exclude it, but I wouldn't confirm it. We don't have anything there. But we have been looking at different markets, and we'll continue to look at different markets. We keep our eyes and ears open, and we chase opportunity, and we like to grow. We are a very entrepreneurial business. So yes, we will look at opportunities going forward. Also when that means that we would extend the amount of countries where we operate in case we see good business opportunity and in case we think that we can make money in new markets. And then we would only go with, as I said, with existing clients. And yes, so I've never been to Mexico, so it looks like a good reason to maybe go and check it out. We do have actually people who have -- maybe I should add that. If we continue to extend the team. We are currently almost 850 people, 50-50 male, female, 38 years of age average. So young, motivated group of people in the different countries. But also we have recently also joined some senior people who do have experience doing developments in Mexico for logistics and other companies. So we do have in-house knowledge of the Mexico market. In the meantime, so -- but that those people also have knowledge of other markets outside of where we currently operate. So yes, and of course, the [indiscernible] team, we have -- also we have people in the Bizdev team who know about data center business. So there, obviously, we continue to learn and look at different opportunities going forward. So that was not short, but that is how...

[Unknown Analyst]

Yes, that's quite clear. Maybe one additional question, if I may be possible to add. Maybe could you please provide some color on the decline of pre-lets for developments to be delivered versus last year? And how confident are you to reach the 80% to 90% target given that you currently stand at 64% today?

[Maarten Otte, executive]

Yes. So, this is Martin here. If you look to the pre-let, that always evolves a bit quarter-by-quarter. What you see typically is that it grows in the first quarter, we start at a lower rate and it grows over the year as most of the deliveries are in the fourth quarter. So we have now 64% of the '24 deliveries pre-let at the 30th of September. Now in where we are at beginning of November, that percentage have increased even more. We are very confident to get in the 80% to 90% range. You also saw the deliveries we did already in the first 9 months of the year, with 95% pre-let. So that's the consistent trend, and we expect again to be back in that range for the fourth quarter. And that comes back also to the comments that Remon was making on leasing that we are doing, where we have more hot signs than we did last year, and we see a good outlook there for the fourth quarter. So we expect to deliver in the 80% to 90%. Indeed, if you look to the exact figure, it's a few percent below last year, but that's just a slight timing issue, nothing else. We confirm the guidance range, and that's also why we confirmed the 1.2 million to 1.3 million square meter of deliveries for this year.

[Operator]

Our next question is from Frederic Renard of Kepler.

[Frederic Renard, analyst]

Maybe 2 questions on my end. First, on the land bank, it continues to climb quarter-on-quarter and specifically [indiscernible]. Can you describe a bit the competitive environment there? And are you acting just opportunistically in order to secure your future growth? And then the next question is, what is refraining you from giving a guidance for next year already? Is it because you have a lower certainty of future projects?

[Remon Vos, executive]

I'll do the second question. Yes. we would -- I think in line with a lot of our peers, it makes sense for us to give guidance for 2025 as we publish our 2024 numbers. So I think rather that we are in line with market convention there. It doesn't reflect any lack of conviction or uncertainty on our part about the development of the business, which I hope you were able to take from the presentation, and you will get from the questions and answers now.

So -- and then just to add on that, we have given, of course, all operational underlying elements for next year at the Capital Markets Day in terms of deliveries, in terms of rental growth that we expect, in terms of cost of debt, One of the things is, of course, how quickly are we allocating the proceeds of the ABB. And we said that we will do so in 12 months. Other than that, I think you have all the elements to determine where we will be landing next year, and we will give guidance, like Richard said, in line with the market with our full year '24 results.

[Richard Wilkinson, executive]

Okay. Maybe with regards to the first question, we talk about land bank. I think your question, Frederic, was related to land bank and how competitive and how difficult it is, if I understand well, to buy land at a good price. Yes, [indiscernible], First of all, we have a lot of land, mostly land in our business parks to continue to grow and extend those parks. That makes a lot of sense because we have already built the infrastructure and we have people on site in such parks, as you know, and all kind of amenities, utilities that are done. So buying land to extend project is key's a priority. You want to do that also to avoid someone else buys it, so it can be very competitive. Obviously, what we do is we try to keep the infrastructure and utilities in our ownership so that you can only connect to that if you own it, so that avoid that other people would buy. But you have to deal with that. So we have local teams to keep an eye on because also you cannot buy all of the land in the world, so you need to be a bit careful there. But that's the kind of thing we do and we've been doing and you need to be careful not to buy too much, not to pay too much and try to negotiate a good deal. having money in the pocket helps. Cash is king. This is also what Richard and Martin just confirmed. I think with -- we can spend it quick the proceeds from the ABB. -- maybe we will. I think that very much depends on what kind of deals we can do. But for sure, you can do a better deal if you have cash in the hand than if you -- if it takes more time to close and to pay in that. So I think we are ready for deals. We are open for business. In some markets, you see more opportunities than other markets. Yes. So with that, maybe I refer to the German market, where we see some opportunity here and there to do to buy what we think good land for good prices, which we could develop for a CT park concept. And then in Germany, for the moment, our German pipeline is a bit of a mix, but it's also smaller units some call it, SBUs or small business units, units of 1,000, 3,000 square meter, [indiscernible], do it as well. We've done it a lot in the Czech Republic and think that is also a good concept going forward. Those are generic designed units, which you can lease to a large variety of all types of businesses, et cetera, et cetera. But it's also inner city locations. And I think that there are a couple of those locations available in Germany, we are currently looking at. But also at the same time, in Germany, we are building the semiconductor industry, which we are good connected to in Taiwan for the past more than 20 years, we've done many projects for our Taiwanese clients, and we are currently doing multiple of those, but one in Germany as well [ in Munich ]. So yes, Germany, we could spend part of the money in Germany. We could also spend part of the money in our core markets as we have done earlier this year. So there are plenty of opportunities out there. I think it's our job to not be in a rush and to pick the right deal at the right terms. So -- but it's always competitive. So it is also here. Yes, it's competitive. But...

[Operator]

[Operator Instructions] our next question is from Steven Boumans of ABN AMRO ODDO.

[Steven Boumans, analyst]

So I appreciate you are positive on demand, but I still have some questions to get more comfortable there. So first, could you comment on the lower retention rate? Why is that? Where is the weakness? And what can we expect for the coming year? Second, do you have any data on underlying usage of space by your tenants? So what percentage do your tenants actually use and the trends seen here? And third, and lastly, maybe some comments on subleasing in the market and your portfolio and the trends seen here.

[Remon Vos, executive]

I'll start with that one, Steven, thanks for the questions. In terms of the lower retention rate, that's statistical and normally, those things can change a little bit, plus or minus. But generally, if you look over the years, we've always been around the 90% for the retention rate. I think we ticked up to 95% earlier this year, which is a little bit of an anomaly on the positive side. So I wouldn't read anything into that. There's nothing -- no trend that we see there. So as you know, as being very vertically integrated, we have a lot of people on the ground, our people in the parks looking at what's happening with our tenants to our tenants. And we are not seeing a material decrease in their utilization of space. If we would be seeing that, you would also see a slowdown in leasing. Overall, we continue to see increase in leasing across the region. So we're not seeing a slowdown. I know that there's a number of broker pieces out there talking about subletting. And that, for sure, is happening in one or the other submarket may happen with one or the other tenant, but it's not something that we see as a specific trend or something that we are particularly concerned about at the moment.

[Operator]

Our next question is from Amar [indiscernible] of Barclays.

[Unknown Analyst]

A follow-up on a previous question. So you said you've already allocated some of your EUR 300 million ABB proceeds. Can you give any guidance on how much you expect to spend over the next 12 months given that? Then on the wider transaction market, you said you're seeing a size improvement. Also, I think you said you're seeing more competition. So maybe some more color on that, too. Is the speed of capital deployment what you're expecting back when you did the ABB?

[Richard Wilkinson, executive]

Yes. So in terms of like total amount of investment, that's a difficult question to answer because it really depends also on the opportunity set. But if you figure that we raised EUR 225 million net of Remon's participation, then at a 45% loan-to-value, that means that we're investing plus/minus EUR 0.5 billion. So we invested a chunk of that ahead of the ABB, but we have still material firepower. For the next 6 to 12 months. In terms of the opportunity set, I think Ron was talking to that. We continue to scan multiple markets to look for the best opportunities for us. As Remon said, we can't do everything everywhere. So it's on us to maintain the disciplined allocation of capital that we've shown over the last 25 plus. years as we continue to grow the company in an extremely profitable way. And we're not going to change that just because we did the ABB. We're not in a hurry, as Remon said, but we do see a number of very interesting and attractive opportunities that we think we'll be able to execute on over the next months.

[Operator]

Our next question is from Cezary Bernatek from Erste.

[Cezary Bernatek, analyst]

Shall we expect the fiscal year '25 deliveries to come at around this year's level and around 5% year-on-year LFL rental growth in the fiscal year '24 for CTP's portfolio looks achievable?

[Richard Wilkinson, executive]

Cezary, thanks for your question. With respect to the deliveries for next year, I refer to what we said during our Capital Markets Day in September. We said for '25 to expect the deliveries between 1.2 million and 1.7 million square meter. And that comes back to our continued growth rate of typically slightly above 10% new space per year. So also if you look back again for this year, of course, what we said the 1.2 billion to 1.3 billion, while we started the year at around 11.5%, so 10% growth. Also next year, we expect the pipeline to be slightly above 10% compared to our standing portfolio. So that feeds into the EUR 1.2 billion to EUR 1.7 billion for next year. And then on your question on your like-for-like, we are currently at 4.4% in the 9 months. What it will be at the full year, I would expect it to be somewhere mid-4, high 4s. We have, of course, all the indexation already done, which has happened on the 1st of January. So like-for-like movements in the fourth quarter will be driven by 2 things: occupancy and reversion capturing. So in terms of reversion, we continue to see that we are able to capture it when the leases come up for expiry. And in terms of occupancy, that goes back to the earlier comments we made around demand with also a good outlook for the fourth quarter. So overall, I would expect like-for-like to be around this level or maybe slightly higher.

[Operator]

We currently have no further questions. So I will hand back to the management team for closing remarks.

[Remon Vos, executive]

Thank you for your interest and your questions, everyone, and we wish you all a great day. Thank you. Bye.