Warehouses de Pauw NV
XBRU:WDP
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Warehouses de Pauw NV
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Good afternoon, everybody, or good morning. Indeed, we moved this call to the afternoon so that our U.S. friends can also follow our meeting. So -- and thank you all for joining this first WDP Teams meeting. We already had, with a broker 3 weeks ago, a first digital meeting at the moment we published our annual results -- not the annual results, sorry annual report, where we commented for the first time on COVID-19 on that qualitative elements. And now let's say, we will give a new second update on this, besides, of course, our first Q1 figures. And if you have any comments or ideas to make this better, then please do so that we can learn from each other and make our digital times better. So thank you. And indeed, we are here to comment on the Q1 results of WDP. And indeed it was, I think, one of the best quarters in our history, but of course, the quarter was before COVID-19. And indeed, in the meantime, the world changed. But I think we'll show you during this presentation that we are well-prepared for -- after the crisis for the quarters to come after COVID-19. Thanks to our sector and the supply chain, the logistics sector, thanks to our clients and diversification and also thanks to our very good balance sheet. But indeed, the first quarter, I think the results, they were as foreseen on budget, nothing special there. But indeed, we have today a very good portfolio of more than EUR 4 billion with a higher occupancy rate of 98%. So very good fundamentals in order to be ready for the future. And that besides this, indeed, it is important to say that we continue to invest -- and that we continue to invest. And indeed, we don't stop our investments like some others do. No, we continue to invest and we realized EUR 130 million of investments in the first quarter. And yes, indeed, we could finalize them, deliver them, together with our clients, which is very important. And besides this, we still have almost EUR 500 million under construction, where indeed our clients asked us and need to continue those investments, and they really say that they didn't send roles to us in order to get rid of their engagements. Now on the contrary, all -- everybody asked to continue with our investments because indeed, they are so needed in the future. And it is one belief in the importance of the logistic sector. But then, if we bring those investments in, the EUR 100 million, we have to realize in our growth plan. Yes, in the first quarter, we could realize them. And it brings us at a total of EUR 650 million of new investments within our growth plan which is set perfectly on track, with the idea of investing EUR 400 million per year, let's say, we are still in time in order -- in this growth plan. And it's well spread over new clients, existing clients over the different regions, of course, with more developments than acquisitions until today. But there, let's say, nothing new, it is the same picture as before. And indeed, the global growth plan, I would say, it stays intact. Thanks to our sector, our clients, the fact that we are in the good strategic crucial sector, which will be needed even more after the crisis and even with a temporarily standstill, we still think that and we believe that our growth plan is feasible. I think the biggest risk is indeed timing. If economy, there is a standstill for a longer period, and we should have a second wave of lockdown, then I think the standstill can take longer. But in the long term, let's say, it's important that there will be place for us to grow within logistics, within our regions. So this is also a very good and an important message. It stays, as foreseen based on our 3 platforms and on our fundamentals there, nothing changed. Also, not -- the drivers of our plan, the state, all the same, and there also, nothing changed. I think if there is something that changed, but positively, then indeed it is the long-term drivers of logistics. And I think logistics is today even more important and crucial than ever before. It was already crucial, but now everybody understands it more than ever. And indeed, this -- the health care, of course, today, care is key, but besides this, the delivery of goods, the fact that we can get all the goods we need at home is only thanks to the key role of logistics and how -- what I would say in the whole chain of our clients of companies. They are more than ever the chain between production and the consumer, that whole supply chain that is key and driven by our warehouses, the warehouses, who are indeed today in the middle of the business, and it's there that it's happened. And the companies today needs performant, flexible logistics solutions. And those who have them, they are, let's say, helping them through the crisis. And indeed, this is a game changer and it will stay a game changer more than ever before, I think, for food e-commerce, people that have other priorities, the changed habits towards online will stay there and consumer behavior has changed and will change further and will use more and more our technological and digital developments. And it was not the CFO, not the CEO, but COVID-19 who implemented our digital strategies. And indeed we even left a period sustainable and that also has to stay. So there, I think the basics are there more than ever for the future for our sector and there indeed our clients will invest more in supply chain, they will have to in order to survive. And indeed, we are well positioned for that with our strong client base, with our in-house team, our knowledge there, we will be able to help our clients and to do deals and to help them after the crisis to be prepared for the future. And indeed, if we then go a little bit more in detail in our activity report, then there we have seen -- you can see that we have indeed, had again a very good quarter. Like I mentioned in the beginning, we delivered and handed over almost 200,000 square meters to our clients, which is EUR 130 million. And we did not only delivered them to the clients, the clients also accepted them. And that is important because in a crisis, when you go to a delivery of a building with a lawyer, well, you can always find something if you don't want or don't need in the building. But nobody did, everybody accepted this building and was glad to be able to start using it before -- to use it for this distribution activities. So very nice start there of the year with all those deliveries. And indeed, besides this, we still have almost EUR 500 million under construction in the different regions, different projects. I won't go into detail here, but big ones, small ones, a lot in health care, e-commerce, food logistics, altogether over our regions and more than 600,000 square meters and almost EUR 500 million under construction. And indeed, they are all -- we continue them. Yes, we have had some delay in certain regions. And in Belgium, construction sites stopped, in Luxembourg, also by law. But in The Netherlands and Romania, we could continue with them. This week, we can restart in Belgium. Next week in Luxembourg. It is indeed not, I would say, at full steam ahead. It is, let's say, on average, around 80% of the normal capacity due to new healthy reasons, sometimes material are not in time, sometimes there is not always enough people on site, but -- because they are ill. But let's say, on average, we can still continue and move. But yes, we will have a little delay. But we think that we, together with our construction partners, with the client, we'll find solutions and we will try -- and we still have months -- in the months to come, we will try to minimize those delays in order to deliver in time to our clients, which of course, with the knowledge of today and subject to any further or certain lockdown later this year. And of course, besides our projects in execution, we still have our EUR 100 million land bank, let's say, which is ready for the moment, when we can restart our new developments based on our locations and the very good structure and diversification of all our buildings, of all our sectors over our region. And if we then look to the portfolio valuation, there indeed -- there has been no change. Valuation is stable in Europe. And that they said, that indeed, for the moment, valuators kept the valuation stable. But besides this, we were able to book around EUR 35 million of positive revaluation, thanks to our developments and because they were at cost in our books. And when we realize them, let's say, we could bring them at market value and this gives us EUR 35 million revaluations. So this shows that indeed with our internal knowledge and our developments, we can add value to the portfolio towards our balance sheet by our own knowledge. And this is also very good and nice to see that even in times when valuation is stable, that we have our own revaluation thanks to our products, thanks to our own developments. And next slide is also looking to the evolution of the portfolio yield. There, you see over the years, the evolution of the yields. And indeed, you can see, because everybody wants and asked us to look back to 2009. Well there, let's say, we have had a rebound in valuation between 2008 and 2009. But I think the big difference at that moment was indeed -- the big moment, and let's say, there was -- the portfolio went down with 10%. But at that moment -- but indeed today, I think the big difference is with them that the value of logistics, then changed logistics before 2009 was the same as logistics after 2009. And now logistics is crucial, it's one of those key sectors that we need in order to get to our goods. And so I think this does not need to be the same. We don't know for the moment but we think it will not be the same, but even then, we give you those figures. But it's all for us based on the conservative valuation if you look at the fair value. And that euros per square meter building, we are valued at EUR 730 per square meter. I think on the quality that -- the quality of the portfolio. Yes, and probably one thing I can still add is that now brokers colleagues that have been pull in the market. And there they say that they think that there could be that -- let's say, yields could go up with 25 up to maximum 50 basis points, which should be 4%. So it is less than 2008, 2009. And it's based on international survey. But indeed, we'll see where we come, but we feel that the interest and the appetite in logistics stays very big also and because of the fact -- due to the fact that there is a less interest for retail even more than before. I think for the rest, on the quality of the portfolio, nothing changed there, that stays the same. And indeed, important for you is the occupancy. This is always the most important thing, like I always say to the clients, but even more in a crisis. The occupancy rate of the existing portfolio is key and is indeed that thing where you are looking and we are looking to every day. And today, we start with a very high occupancy rate of 98%. But indeed like 2008, 2009, what did we see then that indeed between September 2008 and December 2008 that, white goods still came in but the sales stopped. At that moment, all the oversupply, our overstock needed to be stocked and warehouses. And by the end of December, the warehouses were everywhere full, full, full. And also with this, we had our historical highest occupancy rate in December 2008. But indeed then afterwards, the year after, in 2009, occupancy went down due to the fact that indeed, all that overstock, that oversupply was sold and no new stock came in. But here and there, the difference between the max, plus 4%, because at that moment, we were also doing some unlet development projects, but now we don't do that anymore. But let's say, on average, the cyclical impact due to a crisis is historically 3%. But we have to see if this will happen again because indeed, there are also other things playing that is that the one global efficient worldwide supply chain. There are questions if we really need to continue to use this because indeed, it was perfectly working well with the minimum of stocks, perfectly guaranteed everywhere in the world. But then you see that whenever something happens on one of the continents, the whole chain stops and there, I'd say, from a risk point or a client service point or the delivery guarantee point, we feel that, let's say, people are rethinking the global supply chain. And indeed, the chance is big that you will have more local stock, more security stock. I would say on the 3 big blocks, Asia, Europe and America, the Americas. And there, I think that Europe can win, that Europe can be a net winner because we lost a lot the last 20 years, but now we think that -- on that -- based on that risk and delivery guarantee, that Europe can be a net winner in the coming period since, indeed, in Europe you could see nothing moved except the goods and there were only trucks on the road. And within Europe, you could perfectly deliver but between the 3 big continents, it was more difficult. So we think that we are well placed for this period. And it's also getting, let's say, we have to cope with our -- the most important thing or assets in a crisis and that's are our clients. And they are, let's say, protecting and generating our cash flow. And then, we have indeed a very good, very strong client base with well diversified over countries, sectors, kind of buildings. So indeed, there, we are and we have the largest building. Risk is less than 3%. But of course, with this unprecedented times, also certain sectors in our client base have difficulties and are, let's say, impacted by this corona crisis. And we calculated top down and bottom up our portfolio and the risk. And there, let's say, we came to the analysis or a conclusion that -- and indeed, automotive due to the fact that a big, final automotive production facilities were closed during -- until now. And now they are opening again. So that indeed the Tier 1 to 3 suppliers also had to stop. The nonfood retail, as we all know, is also hit very hard and also part of the industrial. But I say, indeed, that 20% of our clients are highly impacted by COVID, but it's not because they are impacted in it, there are also a lot of big, strong companies with them. And so we calculated and we think that indeed, from that 20%, which is highly impacted, that today, if you look at bankruptcy risk, that we think that maximum 5% in our portfolio has today real bankruptcy risk. And that's mostly in the small- and medium-sized enterprises. And we have also -- we have -- let's say, most of our clients in our top 60 is indeed 75% of our revenue. They are the all big companies that we have in these smaller and medium-sized companies. And depending on the sector, there are indeed some risks. It's not sure but that's the risk. So I think this is the basics for what happened in the portfolio and then I give now word to Mick, who can give you some comments on the figures itself. Mick?
Yes. Thank you, Joost, and also welcome to all of you from my side. So when we take a look at Q1 2020 results, this reflect the growth trends of the last couple of years as follows. So first, in the underlying results from our quarter activities. You see the evolution of our rental income up by 10% year-on-year, of which 2% is related to organic growth, like-for-like growth, mainly driven by the indexation and a slightly higher occupancy rates, and then the remainder being driven by external growth related to a steady stream of development completions. So as also highlighted by Joost, over the last 12 months, we've been delivering, on average, more than 100,000 square meters per quarter. And that mainly comes from deliveries in the Netherlands and Romania. So our income. Here, the rise is mainly due to the rise in capacity as last year, we added 20-megawatt peak capacity and are now at 80-megawatt peak installed power. And so for the full year, solar income should be around EUR 16 million. And then when we go on the cost side, you may see a bit higher rise in terms of property charges, and to a lesser extent, G&A expenses. But there on an underlying basis, we can still confirm that these are rising in proportion with the portfolio. And that specifically for the property expenses, it is related to a tough comparison base with last year, exceptionally low and Q1 also impacted by some modest exceptional items. So the 25% rise in Q1 should be rather 15% for the full year. And there for both lines, our guidance published in the annual report still holds. Below the operational result, which is for us a proxy for the EBITDA. You can see that on the financial expenses, even though we've seen a higher outstanding debt as we grow the company due to the execution of the pipeline, you see a drop in financial charges. And that is mainly due to what we've announced for 2019, where we could extend several hedges at a lower cost, which saves us EUR 4 million on an organic basis. That is starting -- the EUR 4 million on an annual basis and that has started beginning of 2020. So that you can the impact of what -- in our results of what we announced at the full year results. All in all, when you look at our EPRA earnings and our core underlying results from the activities for cash results is up 14% on an absolute basis but still 7% on a year-on-year basis, and that is exactly in line with our budgets. And note that this performance of plus 7% on an earnings per share basis is also including the first full quarterly impact of the EUR 200 million accelerated book builds to strengthen the equity we realized last year in November. And of course, I should not recall this for many of you, but of course, this is also taking into consideration on a per share basis the share split on a 7-1 basis which became effective at the start of the year. Also, as mentioned by Joost, on the portfolio results, you can see revaluations of EUR 35 million, which in fact mainly relates to the development gains on the projects. It relates to the ones delivered as well as these under construction, with then the full value coming up around -- on delivery, of course. And that is fully in tune with the geographical split of the pipeline with around 15% to 20% uplifts on completions. And as mentioned by Joost, valuers maintaining a stability in yields and therefore, also in the valuation of the standing portfolio. And Joost, you can now show the slides of our balance sheet. So I think there, to conclude on the results perfectly on track and in tune with our plan for the year. Then here on the slide related to the balance sheet, what you can see is the simple execution of our development pipeline. Around EUR 80 million CapEx accrued in the balance sheet, EUR 35 million redevelopments -- development gains and the EUR 80 million of CapEx funded roughly split between 50-50 between cash earnings and debt, thereby maintaining also our loan-to-value at around 45%. And what I would also like to mention here related to the balance sheet as we will further talk in the presentation about clients and receivables, is that what you see is a rise year-to-date of EUR 10 million from EUR 15 million to EUR 25 million in the client receivables. Note that this is not an underlying increase in overdue payments. That increase is in full related to IFRIC 21, whereas some of you know we need to reflect the full charge of the property taxes of the full year in our P&L in Q1. But of course, we need to reflect it as well in the balance sheet as a liability, but also as an asset because it is mostly to be recharged to the clients. So that is what you see in those receivables. And once we receive those property tax as well as the invoice from the government by year-end, we will then reinvolve them.On the next slides, in terms of management of the capital structure and liquidity. We would like to underscore the following. As announced this morning, we have also further worked on our liquidity. And in total, we have contracted EUR 300 million of new financing during Q1, of which the most important one is of course the one announced today, which we are very proud of to bring a partner like IFC, a member of the World Bank Group on board. And they will provide us with a dedicated funding for Romania, which as a growth country and being a convergence region within the EU, is one of their activity regions. And the EUR 200 million package will be drawn in full in the next couple of weeks. And we'll then further strengthen our resources and also important, further diversify our debt book. So as a result of that, we had EUR 550 million of undrawn credit facilities, which will allow us to comfortably execute our prelet development pipeline and also, it can -- we can cover any debt maturities with that until end of 2021. And that is excluding any renewal of any debt and excluding the impact from retained earnings and stock dividend. And as you know, we distribute the legal minimum required under the Belgium REIT legislation of 80%. So we have each year, retained earnings and each year, we also offer an optional dividend. And last year, the 2 of those combined contributed EUR 85 million of equity. So there, strong liquidity situation. And in terms of solvency, I think here, we can also present solid metrics with an LTV around 45%. And also even more important, a stable net debt-to-EBITDA of 8x. And I would also like to point out that also our loan-to-value is still based on conservative valuations and market yields have dropped until 4% for the top product and were pre-corona in the brackets, moving in towards a bracket of between 4% and 5%. And just to add on, the survey by the real estate brokers Joost mentioned that we expect -- or in general, no big changes in the yield for logistics in general and because of the importance of the asset class. But they do expect some 25 to 50 bps yield increase for the top product, which means starting from that 4%, and we are -- our portfolio is valued at a 5.6% EPRA net initial yields. Moving to the next slides. In terms of our financing structure, debt structure, you can see the composition of our debt book being largely unchanged. And let's say, 1/3 is coming from debt capital markets, 2/3 from bank financing. And also important is that within the debt book, there is a strong geographical diversification as 50% of the debt book is coming from Belgium banks and investors, so either through loans or bonds. And 50% is coming from the rest of the world, from EU, U.S., Asia. So there, we have also a strong diversification, and we will continue around that path. And our named lending banks have all confirmed that they are open for business. Also, you can see in terms of coverage metrics, interest coverage ratio still elevate as we continue to maintain the profitability of our business, but also that is based on high visibility. So around lease contracts and around hedge duration, which is a bit lower now at 83%. And we have mentioned in the past, we want to be at least above 85%, but that will grow towards 90% on a pro forma basis once we draw the loan with IFC. And further on, when we look at the next slide, in terms of debt maturities, same pattern here, no changes. Perhaps some words on the commercial paper markets. So for us, this commercial paper program, it's -- capped the program at 10% of our debt book. So in absolute terms, capped at EUR 200 million. And there, the market was facing a complete drying up of liquidity when the lockdown started. But we must say that it continues to function. We have a bit more ins and outs, but still we are around EUR 180 million, so a bit below the cap and so it continues to function. And let's say, the program is also fully covered by back-up facilities. That is important to mention. So it can even go to 0, we are covered in that. And also in terms of debt maturities, apart from the commercial paper, which is covered, we have the first important debt maturity mid next year. The retail bond of EUR 125 million maturing, but note that all our debt maturities are covered until 2021 even if none of the bank financing gets renewed and excluding any impact from -- as well in 2020 as in 2021 from retained earnings or scrip dividend. So I think we can now move towards the outlook, where we have communicated previously, in the annual report on the impact of COVID-19 and where we wish to provide you together with an outlook -- with the outlook for 2020 with a full update. Sorry for the audience. But we...
Yes, sorry. I see it now. Sorry I will restart. And indeed. Like I -- there is double? Do I hear myself, sorry?
Joost, we hear you now. You were on mute but we can hear now.
Okay. Sorry. So as I said that indeed the first quarter, like I mentioned, was a fantastic quarter the [ Q1 ] before COVID-19, and that's looking backward and we have to look forward, okay? So 3 weeks after the first qualitative analysis, we now want to go deeper and give a kind of more detailed and also quantify impact of COVID-19 on WDP and on other things.First of all, we have to say and -- this is I think the most important is that indeed, the whole team, team WDP is healthy and safe at home. They are working today fully operationally digital. So we made the digital switch perfectly and we could even realize the fastest closing of our Q1 figures without sitting together just all of us separately at home. So this shows that we are ready to go into the future. And also, this makes us ready to help our clients. And today, we are really focusing on -- because all of the warehouses, they are fully operational and in full use, so we have to support our clients that those warehouses stays -- those critical warehouses that they stay in action and that our clients can use them. And so we are, together with our clients, working on that very hard.
Yes. And when we look at the financial side, I think there we have mentioned our robust balance sheet I think demonstrated by the healthy metrics with a debt ratio of 46% compared to covenant level of 65%, ICR of around 4.5 compared to a covenant of minimum 1.5. So there's a large and sufficient headroom also in terms of liquidity, commercial paper fully covered and all commitments -- investment commitments are in the pipeline, which is, by the way, fully preleased, 97% preleased and being able to cope with all debt maturities until the end of 2021, excluding any potential refinancings or the impact of retained earnings and the stock dividends.
And like we discussed already the portfolio and our customers, our clients, we can rely on a very diversified, high-quality client base, which is well spread over the different countries, different sectors, different locations. So there, we are well spread. And indeed, a very important is the fact that our warehouses are fully operational and functional and open. And for many cases and many sectors, they are really crucial today, critical in order to survive and in order to help working the supply chain in those times of lockdown. But indeed, of course, some of our client, we know and we are aware that some of our clients have a lot of challenges. And indeed, some of them are struggling with short-term liquidity. And there, we said that if there is a problem of liquidity then we will always ready to help them. And for sure, of course, first and the small and medium-sized companies, there is a one-on-one basis, case by case, we will say, depending on the capital structure, depending on the way they just -- in history, we sit together and we make solutions. But let's say, we don't go with those big companies, sometimes using or abusing the situation in order to ask rent reductions or just stopping to pay rents. This is not fair. And there -- this we don't follow. Because indeed the warehouses are used. And on average, globally we got rent for 20% requests from clients. And the total requests from stop from reductions, stopping paying rent and asking to help in liquidity that was around 20%. And there, we'd say we follow 10% and we made an agreement of around 10% of the outstanding with our client base, mostly in the small and midsize segment. So this indeed will also make that in the coming quarters the receivables will rise. Mick? Mick?
Sorry, I was on mute myself. In terms of payment records for the clients, we have currently received 95% of the rent for March and 85% of the matured rent invoices for April, or for the second quarter, depending on whether they are invoiced on a monthly or quarterly basis. Just for your information, 2/3 are invoiced on a monthly basis and 1/3 on a quarterly basis. And in fact, in terms of payment pattern versus last year, when we analyzed the first 16 weeks of the year and considering week 13, the lockdown started, we have received roughly the same volume of payments, apart from the ones like Joost mentioned for April or Q2 where we did for 10% re-profiling of the payment terms. So today, we have 85% collected for April or Q2 depending on the invoice frequency. There, you need to add back the 10% of payments that will be re-profiled to be paid later during the year. And then you have the remaining 5%, that is always the case where you need to chase some clients a bit more or when you have just started the process of invoicing on a new development project. So then you arrive at 100% of the rent for April or Q2, respectively. And based on the current situation and assessment, we expect our client receivables from this point to increase by EUR 5 million to EUR 10 million.
Another important element are indeed our projects under construction and under development since, let's say, it's a big amount since it is around EUR 500 million. Of course, due to the safety measures, due to some countries who stopped activities, like I mentioned, there today, we have a delay in the execution of the project. We will, of course, try together with our construction partners and with the clients to minimize it and to deal with it as good as possible. But today, taking account of all healthy and safety measures. But today, we have to say that we expect a certain delay. But the positive thing is that besides the Netherlands and Romania, which continue working, Belgium and Luxembourg are also restarting. But we foresee a delay in the projects of today and with the knowledge of today, depending on the future, let's say, there we think that between 1 and 2 months, there will be delay in our projects.
Yes. And if we -- thank you, Joost. And if we then combine this in the outlook for 2020. So based on what we just set, we have moved in our guidance from -- for 2020 in terms of the EPRA earnings per share from EUR 1 to a bracket of between EUR 0.95 and EUR 1. And we will still [ high ] for the EUR 1, of course. But today, we need to be realistic too. And yes, there will be some delays. So that's why we mentioned now a bracket of EUR 0.05 -- I mean in the range of EUR 0.05, sorry. That is mainly due to the anticipated delay in the delivery of the projects under development as well as an anticipated increase in the provision for doubtful debtors mainly in that, let's say, SME segment where Joost mentioned that there might be some difficulties. But overall, based on the knowledge of today, should still be contained. And so based on this outlook, we still intend to offer a gross dividend of EUR 0.80 for 2020 so payable next year in '21, which is an 8% increase, and as foreseen initially and guided for at the start of the year. And that is still based this outlook on solid operational and financial metrics with an occupancy rate projected to be on average, minimum 97% for 2020 and a debt ratio, which remains below 50% on the basis of the current portfolio valuation.
But indeed, besides, let's say, the outlook of 2020, I think the most important is the long-term prospective, what indeed after 2020, how will the post-corona time looks like. And there, we believe today that we have -- we are at a good side, we have a good sector. And that, like I mentioned in detail in the beginning of the presentation that in the longer term, those logistic supply chain will be crucial. And due to all the changes, which will now go much faster than foreseen, there will be a big need for logistics for e-commerce, food e-commerce, that derisking and close of production and derisking of minimizing stocks. So there, we still believe that there is enough room and that there is place for our growth plan and that we can, let's say, grow further together with our clients further after the crisis. And that there will be projects enough to grow further. Thank you for listening to us. And I think now it's time to listen to you. And now we are going to the questions. And then I will start reading them.
We have already 2 questions. First of all, so I will read it first. Are you seeing a shift in your client composition from industrial and automotive to food logistics and retail and e-commerce. Can you confirm the average lease duration which was decreasing in the past to 5.6, has increased to 6 years before? First, break out -- I'm sorry a lot of questions. Are any steps taken to address the lower average leases, in particular, 4-year average lease, for example, in Belgium. Are there any discussions with Greenyard given their financial deterioration? Did any clients ask for rent reduction, holiday or adjustment?I will answer that one by one. Are we seeing a shift in our client composition? I think this is too early, of course, today. We see that and we have a historical client composition, and now we see that what we can see that a lot of our projects in execution are in e-commerce, health care, food logistics. But it's not that we see that today, and I'd say now, we are finalizing and executing projects from before the crisis. And let's say, it's not that we can see the change already from after the crisis. That is too early. Indeed, we have had some longer lease durations. But indeed, we have -- it's not that we have, let's say, worked specifically to longer those leases. It's also sometimes, we have big contracts come to an end and it is renewed. But indeed, on average there, we stay at a very good lease duration.
Perhaps, Joost, if I can also add. So the lease duration has historically been very high. It has been 7 -- until first break, 7 years or a bit more. And that was -- at that moment because we did a couple of large deals, we've made an important impact. And now these leases have shortened a bit. And the average is 6.0 on average, including the length of the certificate income for -- the green certificate income from -- for the solar panels. And now it's stabilizing around this level. Also note that two things that's the pipeline, which we are developing, which is EUR 500 million is based on contracts having an average lease length of 10 years. And also, you should also take a look at the lease duration until final expiration, which is not 6 years but 7.5 years. Why? Because historically, and that has been the case we measure it since the crisis. The average lease renewal rates, a client extending its lease on the maturity on average is -- has historically been 90%. But in the end, the lease will depends on the type of user too. And due to the fact that there are more investments needed into the building that they will be calling more important, that has shifted towards a bit longer-term contracts. But in the end, it will depend on the type of player, so the end users which form 2/3 of our client base. They go for the long-term contracts, 10, 15 years. And then you have the logistics service companies. They need to go back-to-back with their client. And they signed a typical 3, 6, 9 leases. But then for us, there we analyze the risk. What is the risk. What is the type of activity there in the sector. And what is the underlying risk of the end client. That is also important to do that look-through analysis. So I wanted to make these comments too. Yes, Joost?
And then indeed Greenyard, I think that's one of the good things. Every crisis has a good side, too. I think thanks to the crisis, and the fact that there is a need for a lot of more fruit and veg to be delivered to the food supermarkets, Greenyard is in very good shape. They are working very hard. They are -- they have a bigger and a better turnover and a better profitability. They did a financial statement some days ago, and they will take for the first time in 2 years, they could say that the profitability is going the good direction and the side. So it's still a long way to go. But today, thanks to the crisis, they can get a better profitability, so this is good for us. And the last question concerning the rent reductions that we answered already. No, we didn't give any rent reductions or rent free. And we just helped some clients in their liquidity.Another question, new question is from Damien from DPAM. From the 5% rent you need to chase, what proportion is at risk for a real lot of rent brand? Do this 5% represent a significant increase versus usual years?Damien, I think the 5% is not normal. The normal portion, Mick, we have to chase for...
Yes. Indeed, let's say, Damien, that always in any portfolio, there is about 5% of the clients which you need to chase to get the payment. It's not that these clients are specifically in financial difficulty. That is more related to the payment profile with the incoming payments for the invoice or the rent invoices. I think there, your question is perhaps rather related to the fact what we could perceive as bankruptcy risk. And as mentioned by Joost in the beginning of the -- in the middle of the presentation, there he mentioned that we did a bottom-up and top-down analysis where we did, first, a financial screening of the clients, again. So screening on their financial strength. And the ones that have a low financial strength and a high business impact of COVID, we analyzed that, and it should be around, let's say maximum 5% of the portfolio there. There is, let's say, more of the bankruptcy risks situated. So less than 5% of the portfolio and mainly in the SME segment. And if history is any guide, in the history of 20 years stock listing of WDP, in that financial history, the -- through including all numbers for those 20 years, the historical [ bonus ] rate, default rate on the overall revenues has been 25 basis points. And in a crisis year like 2009, it was a 1% provision we needed to take for that for debt. So 1% of the revenues in that year.
Okay. Then a new question, deferrals, are they all scheduled to later this year?Well, there in general, we can say that we have 3 schemes. Some of our clients that pays quarterly in advance. And then we agreed to pay every month. Some of them, we said, okay, the second quarter, you can pay back indeed before the end of the year. And in some very specific cases, we said, okay, the rent, let's say, for now and for those 3 months, you can pay back but with an interest rate next year. So this are, let's say, the 3 schemes that we have negotiated with our clients. Then Frederic Renard. Can you give some color about the commercialization going forward. On existing portfolio, still have 30% to be renegotiated on 13% of the rent maturing in '21 -- 2020. How confident are you, especially in those clients -- in those SME clients? Indeed, today, we can say that for the 70%, which is, let's say, already renewed, that this rent at the same price. So we just rolled forward. We rolled through the existing rent. So we have to do nothing special. And for the last part, which is more for the end of the year, there are no real, specific big risks and we feel confident that, let's say, we can realize a normal year while [ anywhere ] 90% of clients who will have a break that they will stay in the portfolio. And I think what we have learned in the former crisis is that, in a crisis, at the moment of crisis that even more clients are staying here. When there is a crisis, they stay in the building. They stay where they are. They don't move for EUR 1, EUR 3 or EUR 2 per square meters to somewhere else because moving is taking risks. It's risking towards their clients, their KPIs or their internal KPIs. So -- and when it's crisis, people stay in their buildings. So there we feel no different and we may calculate on the fact that we can just roll forward our [ rental ]. Then, Robert. I think it's Robert -- will you impair all rent reductions, rent holidays in one go? Or will you take them on the balance sheet and impair over the years. Why would you not impair all receivables in 2020 and consider 2020 as a lost year.Why should 2020 be a lost year, Robert? I think indeed -- and we give more rent reductions. Only, let's say, a late payment. And there we will use our normal rules, yes, Mick? We will use our normal rules -- we will use the rules we have. We will not change the rules.
So in our accounting rules, we say that all rents above due, above 180 days, we book as provision for doubtful debtors anyhow. And then if there are certain risks, if we believe that due to the situation of the clients, we believe that this receivable will not be recovered, we also take a provision. But that is a management judgment on a case-by-case basis. And that is also what is reflected in our -- in this guidance where we took this 1% provision for those doubtful debtors into consideration. Also note that all our contracts are protected by rental guarantees. And that depending on the country, you either have 3 to 6 months bank guarantee or in the case -- in the really big international companies with strong financial strength, then we have a full corporate guarantee.
Okay. The next question of Robert. I recognize you have discussions with your debt bankers on a daily base. Had there been a change in sentiment versus mid-March and today? e.g., if either CP market reopening. And what is the midterm impact on pricing of that. Mick, this is one for you.
Yes. I think there is today a discrepancy, of course, in the banking market and in the debt capital markets. In the debt capital markets where spreads have moved out quite quickly, and in tune with the valuations dropping in the equity market and with substantial new issues, premiums being paid. And also think there is still money available for good companies. And there is a huge discrepancy within each type of rating within the sectors because probably some ratings are no longer adequate and need to be revised. In any case, don't really -- does not need to come to the debt capital markets this year as we are sufficiently liquid. There, in the CP markets, yes, indeed, at a certain moment at the beginning of the lockdown and in that week in mid-March with strongest volatility in equity and debt capital markets, there was no liquidity. But we had no renewals. And that -- no maturities in the CP market at that moment, they started a strong end of March. And now, let's say, we see there is announced a bit more, but it's still functioning in the CP markets. And we talk to our -- all our bankers on a daily basis. And our banks are liquid and open for business.
Thank you, Mick. And then Joachim Vansanten from KBC Securities. If I look at a project and the development and the planned delivery date pre- and post-COVID, the delivery date remains mostly the same or delayed by 1 quarter, except for Geel Hagelberg and Heppignies. There the delay is 3 quarters. I know the projects are only small but what is the reason for the longer -- for the larger delay there?Indeed, and like we said, 1, 2 months, so from 1 quarter to another quarter. But indeed in Geel, there is approval with the building permit. There indeed, it's a problem by getting the building permit in order to be ready. So it has nothing -- it's a small project, but it has nothing to do with COVID. And then for Heppignies, there I'm looking which one -- yes. Conway, that's indeed also -- Conway in -- no, [ Fuso ]? No that's...
It's a -- Joost in the past...
In Heppignies, there I have to check from...
There was some delay and also had to be clear...
Yes, yes, yes. That's a small, that's a -- some delay also due to the building permit, yes, yes. That was some extra offices. Some extra offices near to warehouse. And that indeed, there was also a building -- I would say, a classical Belgian problem of getting building permits. So indeed, nothing with COVID. Then another question of Joachim. I agree with your view that logistics have a strong position in the long run driven by increased e-commerce, nearshoring and less thin just-in-time supply chains. However, in the short to midterm, it is certain some companies will come into trouble. So in the short term, to what extent do you see these trends offset each other. Yes, Joachim, this will indeed be, let's say, a difficult one. First, you will have that extra stock and extra high occupancy rate due to the fact that there is more stock. And then indeed, you will see how fast those new trends will come. Some of our clients will be in troubles. But some of them are between troubles but they can be taken over. And it's not sure that because they're in trouble that the underlying business is in trouble. And indeed, let's say -- but that's our daily business, and that is the business we know and that the reletting business, the game we play with our clients, help them, change them, make bigger buildings, smaller buildings. And this is the way we work on a daily basis, where we have 20 -- or I would say, 20, even longer, 40 years of experience. And we think we can handle that. Now Amal also from the group. [ Take account ] do you expect more sale and leaseback operations after the crisis?Well, Amal, we thought the same after the financial crisis. There is -- now people with constant rate through their core business, and they will sell their buildings and lease back. But what we have seen after the financial crisis was that, let's say, banks were only prepared to give new loans to the companies asset-backed by those assets. So they could not sell the assets. So we have seen, after the financial crisis, I would say, less than we had expected sale around backs. Can be the same now, can be less now. Indeed, people will need cash to investigate more in their supply chain, in automation, for example. But then the question is, will the banks, let's say, give the companies the possibility to sell their assets and lease them back. We'll see but we don't calculate too much on it. And then Niko from ABN AMRO, how about labor force availability in Romania. Any changes here that you can comment on both for tenant and at the development sites. Niko, of course availability on the development sites is not a problem. Of course, there are some people ill and dead, yes, you have some. But it's not that there are less people available. For developments, on the contrary, I would say that a lot of the Romanians went home from Italy and stayed there so they can help locally on sites. And there has been tension on some local employers in the warehouses. But it's not we felt that there is more tension or not. And I say -- I would hope that some of the Romanians abroad that they stay in Romania, that they help their own country locally and that there is more capacity locally. But I don't think that there are really changes in the availability for both. So these are all the questions for the moment. I would say I will still wait a little bit, if there is another question. But for the moment, we have all answered those questions. And I don't see any new questions coming. But -- I see another question, anonym too. In any of your regions, do you anticipate any developers or landlords having issues with occupancy that might depress rents in the short term despite the strong long-term trends? Do you anticipate, I would say -- do you ask then that we anticipate by buying them? Or -- of course, let's say, we are -- I will answer the both. We are, of course, looking if there are opportunities in the market if we can do good deals. And this time, where, indeed coming months and there will be some months of illiquidity. If we can do -- with the liquidity buffer we have and the money Mick received, we can do deals. So we are open for deals. But for the rest, I don't see any issues with occupancy for the moment, since indeed, -- offer the warehouse and those who were empty, we are now filling up with, of course, temporary flexible contracts. So then I don't see any problem.And that -- a new question is indeed, are you seeing specific issues with automotive tenants?Automotive tenants, I'd say no specific issues. But of course, they are driven by specific -- by the sector. First -- in the first -- I would say, the first 2 months they were double since the Chinese and the oversea productions were closed. So they have to fill the gap from further away, from faraway suppliers. But now, of course, since the big automotive industry, the big really production capacity has stopped some weeks ago, they are, of course, not producing anymore or they are producing other things like masks, medical masks. But we see now that big production, the big automotive production, for example, in Belgium, Volvo, and Audi, and also in Bavaria, that they are all reopening or planning to reopen. And when they reopen, let's say, this should also be positive for our automotive. But the advantage of this sector is that it will all -- that these are all big, very good structured -- well-structured companies. So there also indeed no specific problems. Other questions further? If there are no questions further -- I will wait some seconds since there is a delay between when you type and when I can see it. But if there are no further questions, then I can say, thank you all for listening to us. And as you know, always open and free to answer your personal, detailed questions. But we can say that WDP is ready today and is ready for the future to help further the strategic and crucial logistics sector to grow further together with our clients and, of course, with you, our shareholders. Thank you all. Keep healthy and safe at home or in our office. And we hope to see you back shortly and real life. Thank you all. Bye-bye.