Warehouses de Pauw NV
XBRU:WDP
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Warehouses de Pauw NV
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Good morning or good afternoon, everybody. Welcome to the WDP Q3 update of our results. We first ask indeed to stay on mute. We'll do first the presentation, and then after that, you can ask your questions by raising your hand and/or putting your questions in the chat box. But indeed, we will keep it short since I think most of the things are clear, and it is only a quarterly update, and so that we can be open for all your questions.I think we can say that we are really full steam ahead towards our short-term and long-term strategic goals. We have a full house, 99% occupancy rate, and even everybody still paid the bill. And our portfolio is growing further to the expected EUR 6 billion in the end of our investment scheme. And indeed, within this investment scheme, we are today fully in line with our plan of EUR 100 million per quarter. And so already for this year, again, and this quarter, again, we realized another EUR 100 million of new projects, which brings us in total up to EUR 1.3 billion. So still EUR 700 million to realize our strategic goal of a portfolio of EUR 6 billion and earnings per share [ in '24 ] after realizing the projects of at least [ 1.25 ]. So there, we can say that we can indeed confirm and that we go full ahead towards our goals based on, of course, all the existing industry drivers that we explained already a lot of times and also based on our, let's say, our ESG journey that we are also permanently focusing on.So this together with our projects, which are all running, we did acquisitions, we bought land, we executed for, let's say, 1,000 square meters of buildings already this year. And indeed, we still have for 800 -- and more than 800,000 square meters under construction in the different countries and the different regions. So there, the pipeline is still there. It's a very profitable pipeline. And indeed, there, let's say, using this, we can continue the growth further on the next years.And one important element is at Slide 17, the land bank. Indeed, if you just look, then you see, okay, the land bank stayed the same, that give us fully or almost fully replenished. We could put new land and additional lands that we use again. So we -- it's...[Technical Difficulty] Okay. Sorry for this interruption out of number. But I think important there is that we could fully replenish. It's not the same land bank anymore. It's a fully replenished new land bank. So it stayed at the same level. But let's say, new land bank instead of the beginning of this year. If we then look further on the portfolio evaluation, there Mick will give you all the details and the explanation.I think for the rest of our portfolio stayed of the same quality, like we explained last time, there is a lot of potential and 50% is suited for urban logistics, like I mentioned, the occupancy rate is still the same. And I think we can say that all the leases are renewed for this year. So there too, we can focus on '22. And so I can say, operationally, we are fully in line and steaming towards our strategic goals.But there are, let's say, some things to tell about the portfolio and the financials. So I give the word to Mick for all the details.
Thank you, Joost, and welcome also from my side. When we look at the 9-month results in terms of EPRA earnings when we make the bridge from the Q2 results, there were no specific items in this Q3 results. So I would say the plus 10% performance year-on-year is fully in tune with the full year guidance of EUR 1.10, which we upgraded to that level at the Q2 results. And these results are again broad-based, driven by all our teams and countries. The main driver stays, of course, external growth through the steady stream of project development completions, which are that's very important, and which were delivered on time and on budget and with the center of gravity in terms of project development completions this year being in Q3 and Q4.Now next to that, organic rental growth was at 1.4%, 1.1% indexation, 0.3% occupancy rate and the reversion rate on the contracts was flat, meaning that all contracts with a break got rolled over at the same conditions and perfectly tracking at least inflation, though we see there upward pressure rising going into the next years, I would say. Second, next to EPRA earnings on the portfolio results, there we have another strong revaluation, EUR 600 million in total for the year. So year-to-date, 9 months, plus 12% on an underlying basis, spread a bit across the 3 quarters. And when we take a more detailed look at the components of this results -- this portfolio results, 65% of the portfolio results is driven by yield shift with 60 basis points downward yield shift in the portfolio, given obviously the continued pressure on market yields and that resulted in an EPRA net initial yield now being at 4.9%.Secondly, 15% of the portfolio results is composed of an uplift in the ERV. The ERV across the portfolio saw an average uplift of 2% at rental values across the portfolio, but what does that mean on an underlying basis -- on an underlying basis, this 2% on average is driven by selective uplifts of let's say, 5% to 10%, mainly in Belgium and the Netherlands in locations where there is scarcity at play. And in fact, this is also in tune with what we see with our let -- our commercial leasing teams when we have positions of buildings that's fall vacant, then we can renew them at on average, plus 10%. However, yes, so that's a sign of rental growth. But note that this is still limited because our portfolio obviously is almost fully let today. And then a third block of the portfolio results composing 20% of the portfolio results for the project development gains, obviously, and these were driven by an average gain margin on development completions of 35% year-to-date. So that's on the results itself. And when we take a look at the slides on the balance sheet, there, we continue to invest around EUR 100 million per quarter. And this year, we will have funded including EUR 75 million in Q4 due to retained earnings and another contribution in kind, which we realized early October. We will have funded around EUR 350 million through equity and not through revaluations, of course, but through ABB contributions in kind, stock dividends and retained earnings. So in that context, which funding almost our investments in 2021 through equity, in that context, the EPRA earnings per share rise of plus 10% for this year is especially strong. And what it does additionally is that all our balance sheet metrics stay particularly strong, and above all, our balance sheet remains very liquid as well with a lot of undrawn credit facilities covering all our capital allocation commitments and refinancings -- upcoming refinancing for the next 15 to 18 months.And next to that -- this also reassuring that, as Joost mentioned, our clients continue to pay very well, actually, solid 99% rents collected over 9 months. We already mentioned at the Q2 mark that all the COVID-induced payments reschedulings we had last year were already recovered. And as far as the rent for October for the monthly rents for Q4, for the quarterly rents concerned, we have already received the 85%. So their payments continue to be good and follow a regular pattern.What I would then say to conclude this -- then on the -- as far as the outlook is concerned, I believe that with the 9 months results now behind us and very good that the full year guidance is now within reach. And as Joost mentioned, we are now able to fully focus on '22 and the further execution of the growth plan.So there, I would say this wraps it up in terms of our part to give you a general overview and business update, and we are now open to all your questions. Perhaps Alexander, can you manage -- you can ask the questions.[Technical Difficulty]
Yes. The floor is yours Paul.
Sorry, apologies, guys. Just a couple of quick ones from me. You obviously highlighted seeing quite strong rental growth re-leasing, I think a number of your peers, whether that's U.S.-based or European-based or U.K.-based sort of all highlighting that stronger rental growth. It seems that we are seeing that rental growth coming through probably faster than you may have expected in sort of recent updates. Is that fair to say? And just wondered how much the valuers have reflected that reversionary potential within the portfolio? Or are they still very much looking at things from an in-place rent point of view, which obviously remains slightly muted, as you say, given the lease structures?
Okay. Shall we take this one-by-one please?
Yes, one-by-one.
First, in terms of rental growth, I think there, our view has not changed in the sense that we mentioned last couple of quarters that since mid-2019, we can track at least inflation. So we do not need to give back any inflation when there is a rental break, and that's what we currently see is that we currently see a growing discrepancy between in-place rent, contractual rents, and ERVs, which are rising, and that's we see this rising further. But the fact of the matter is that can you capture this immediately? No. We have been growing the portfolio at around 10% per year over the last couple of years with leases of 10 years. So we have our obligations versus our tenants, so we have a long [tenure]. And indeed, for the next year, there are contracts maturing. And we believe as this difference arises and we will be able to, for our next plan or in the next cycle to capture this rental growth, and we are also preparing our teams commercially for that. And as this is starting right now, this is in -- at play in discussions, of course, with tenants, but it's -- we're seeing it at least, firstly, for units that's for vacant. So there, we can easily renew them at a higher rate. Now as far as the second part of that question is concerned, how much of that got reflected in the valuations, that's 2% because we got -- it's not across the board that they are already reflecting this, there are often based on in-place rents and wanting to see more evidence. But we are also providing more and more market evidence through our systems with better data and data intelligence, providing them with better insights from the direct markets, which is also then beneficial for our valuations. But for this year-to-date, the effect of that was plus 2% of the ERV uplift.
And on that, I suppose, looking at the portfolio as a whole, what proportion of your rental contracts are on ...
Strategic goals. We have a full house, 99%. And everybody still pays the bills.
There's somebody not at mute. Sorry [indiscernible] for this.
Sorry. Sorry. Can you hear me, okay?
Yes. Yes.
Great. Sorry, I was just asking what proportion of your rental agreements are up for renewal in the next 2 to 3 years? So ahead of -- strong...
On average 10% per year.
Yes. And it's on Slide 22. There you see the details.
Okay. Sorry, final one for me. Remaining yields remaining relatively flat over forever almost. And I appreciate the rationale behind this. Some of your peers sort of highlighting that there's been sort of evidence that yields have been compressing. Just wondered what your thoughts were there, I appreciate, it's obviously not necessary, main focus for you in terms of that yield compression. I just wondered what your thoughts were on the direct market?
Yes, indeed, on the Romanian yields, they have been indeed largely flat. The only thing that happened in this -- at the start of the year in Q1 is that the -- there was, for the first time, a downward yield shift in the valuations of -- yes, only 25 basis points after all these years, that is in Romania that happened this year. And now the valuation yields applied by the appraisers in Romania are between 7 and 8, depending on the duration of the contract. Now everybody knows that this is only, let's say, I would say, a sort of fictitious yield because there is no transaction market. And ...
We don't sell to CTP and CTP doesn't sell to us directly. There is no market for this moment.
So if tomorrow there would be a market transaction, we are sure it would be sub 7%. There have been a couple of deals that were on the market, and it would have been below 7%. But in the end, they didn't go through for -- all the reasons for strategic reasons of that -- of those sellers. But it's due to a lack of liquidity in the market.
Frederic from Kepler.
And maybe first question, for next year would be a comments on your part on the rising price materials that we see currently in Europe. And how is it affecting the business as from now?
So what we currently see, Frederic, is that first of all, on the existing pipeline, there that is prices have been largely fixed and locked in on the existing pipeline and timings too, what is at play is that for the new projects, yes, indeed, construction prices have went up even up to 25%. And that is -- that's 12% plus 25% is versus last year, and let's say it's plus 15% versus pre COVID. So that effect will still endure during the course of 2022, and this is mainly because of supply chain bottlenecks, mainly in the raw materials, but also due to capacity constraints with the suppliers. That's one component in terms of price inflation and there is also a component of timing there where we used to say -- let's say rounded figures for an average project, 6 months as from the moment you have the land, 6 months for the building permit, plus 9 months of building time, that 9 months has now become 12 months.
Okay. And maybe just to come back on the price inflation you see from materials. Are you accordingly able to reflect that increase to the rental level? So it's a bit linked to the question of Paul previously.
Of course, we try to feed it through in the rent levels. Sometimes you can, because, for example, you have the land available, sometimes it's more difficult when there is a lot of competition, then it's even better to stay at the market-based rental level rather than going open book with the clients and be market-based, bit obvious, normally yes, prices, you would say, rental prices at that moment should be hired across the board. But what is don't play in this effect is the fact that yields are very low. And then there is a lot of competition and also for development and then stabilize deals continue to be lower than development yields dropped too, even though -- and that's even though, yes, development yields are lower too, but cost of capital is lower too, and development margins are more or less intact because stabilize yields are lower too. So that is, in fact, a big -- many effects at the same time.
Yes. Okay. Well, that's fair. Maybe just a follow-up on inflation. And if I take just the inflation it lands from -- what the eurozone that were published this morning. Would it be a fair statement to say that thanks to the CPI cost, which is embedded in your contract, as from next year, it's highly likely that your rental growth -- organic rental growth only coming from indexation will top the 2%?
Based on the current inflation levels at which the contracts are being indexed today across the entire portfolio of WDP, the indexation for next year will be 1.9% on a weighted average basis versus 1.1% today in this year.
Okay. For 2022, we ...
For 2022, it will be 1.9% versus 1.1% this year.
What you say is right, correct.
And last question on my side. Any idea when we will have any -- well, any update on the FBI, [Dutch, and Netherlands]? Do you see some kind of advancement in the process of discussion?
We still need a government in the Netherlands, but we first meet the government.
But the finance cabinet in the Netherlands has ordered an external study through a consultant to evaluate the rate regime and that is expected by the end of Q1 next year, but then there will need to be a government in place and also willing to make this political decisions. So we believe that the earliest you could expect something is at what they call [trenches] back in the Netherlands in mid-September when we announced the new fiscal measures for the year thereafter. But it's not in our control, of course.
Pieter?
Yes. I also have a follow-up question on Paul's question on the rental growth. You just be willing to accept some higher vacancy to capture a part as higher rental growth. And in other words, just preparing of your teams for the rental growth meter that might be a bit more aggressive in terms of negotiations.
Yes. But they need to become empty, let's say, you have your contracts with your clients and your long-term relationship with your clients, so that's the long term, and that goes first. Of course, you can negotiate, but when they are in their contracts, you cannot just kick them out.
But when -- if a contract ends at the end of period.
And then you can negotiate and at the end of a contract, indeed, you can negotiate. But there is a difference between rollovers and -- of a break of a contract and the end of a contract. And in that, let's say, in one that is just a break, then you can just say, yes or no. Where you stay in or you stay out, or you go out. In the end of a contract when you have to renew a contract, then you have, let's say, a better legal position to negotiate. You can just say yes or no.
Yes. And so in the end, now the teams might become a bit more aggressive and this might -- which could even lead to some higher vacancy, would you be willing to accept some higher vacancy there? Maybe, say, a rent contract we want 10% higher rents or walk away?
That's always a difficult one since we are there for the long term, and we want to create value, let's say, together with our clients. And then just saying to somebody you have to go out so that I can rent it to somebody else at a higher price, that's a very difficult one, which is, let's say, against our feeling of working together of doing repeat business with our existing clients in the long term. But we will fairly negotiate and look if their prices are really, let's say, not adapted to the market, then we will negotiate. But always, let's say, with that long-term spirit, that's always been the spirit of WDP.
Understood. That's very clear. On the land bank, it's quite impressive that you've replenished the whole land bank, specifically in the current market. Could you maybe give some additional color on how difficult it is to replenish this impact as I believe there's a lot of competition out there for this land?
This is very difficult. But let's say, we have two ways of replenishing. We have, let's say, the external way by just buying new land or new Brownfields, or let's say, also a part of our -- every year, a part of our existing portfolio, there, we have a part of redevelopments that are also in one of the slides. And when those redevelopments become free, then we can redevelop and then, let's say, they go into the land bank. So this land bank is free -- is a free land bank, not rented. But let's say we have an internal channel and an external channel. And indeed, it's today, let's say, the most difficult part of our job is replenishing the land bank. But indeed, until now, it is still feasible, but indeed, it is getting more difficult every day.
And maybe a final question. [indiscernible] said last week that there's only one greenfield had left in the Netherlands somewhere in [indiscernible]. On the other hand, I hear from agents that they say there's still a lot of spec development out there. What is your feeling on the pipeline of new assets in the Netherlands?
There is more than one speculative development. There are a lot of speculative developments everywhere from different parties from small developments to big developments. No, no, I think I can say not that there is too much, but there is everywhere a little bit speculative developments. They are not all pre-let on the contrary. No, that's not true.
But not to the extent that it is worrying today because it's [in-absorbed].
Alvaro?
Yes. A few quick questions. On your rental uplift, when relating, you said that you can, in some places capture up to 10% versus the passing rent. How much CapEx do you need to put on the warehouse once it is vacant to get that uplift?
It's just -- what I mentioned is that for -- in '21 for the contracts, which had a break that they were rolled over at the same conditions and perfectly track inflation. I mentioned that when we have some vacancy -- when we have some vacancies at that moment, we can capture a spread of around 10% when it comes to, for example ...
Without any CapEx. So -- no, no, it's just existing building existing build. In first, we bought 3 years ago a building with the idea of renting it out at EUR 38. Today, let's say, there was still a part of that building became empty. And we said and we did, we re-rented it at EUR 42 instead of EUR 38. But without any investments. So we did not need to invest anything, it were just the existing buildings that we could now rent at EUR 42 instead of EUR 38, 3 years ago.
But what is also more and more the case is that -- we see that in the future, we can extract more value from the existing portfolio. As for example, redevelopments or renovations or modest upgrades become more profitable because, for example, we announced that the Q2 results. We have 3 assets in the Belgian portfolio, around 60,000 square meters, which we could upgrade for EUR 8 million, some real nice renovations and sustainability of grids, and we could increase the rent and the ERV with 12% and go to 25% revaluation of the assets. So that's also -- that's for us, these are signs that due to the scarcity, which is growing, that the existing portfolio gets more valuable. And that's also in the past, it was difficult to extract more value from the existing portfolio, and now we are seeing the first signs of this and trying to capture that to the maximum extent possible.
Okay. So no, no, that is great. So there are some cases where that uplift can be achieved CapEx free. But in some cases, I just said you have to put EUR 8 million or you have to do something on the asset on the warehouse. So it is not always automatic that once you have a vacant warehouse, you can put that unit at market level without lethal investment, I guess?
The general case is that we have zero to no CapEx for capturing the uplift. The question is, do we -- at that moment when there is some vacancy, want to make an uplift in the technical and sustainability aspects of the building? And then will you do it all at once and try to capture most of the -- the maximum extent of the value.
Okay. So there is some value that can be only unlocked with CapEx. Otherwise, it cannot be a unlocked.
Yes.
Okay. And then the second question is on your Slide 17, that is great, how you replenish the land bank. I wonder what is the ideal size in terms of fair value for your land bank going forward? And also something interesting that is happening in the market is while construction or construction margin is kept constant, lump prices are going up. You are at some extent, a developer. So have you thought in selling land and benefit from the strong pricing? Because in the end construction cost, it is constant, but land prices are going up and also is a way of making or generating value for your shareholders.
Why should we do this, why should we sell land and giving our competitors a possibility to do a nice development. So that's what we want to do by ourselves and capture the value -- yes, and capture within the portfolio.
The value -- sorry, if I'm wrong, the value, it is kept constant as you have quite well explained. Construction cost and land prices are on the rise, and the construction margin is kept constant just because yields are compressing. So in the end, who is winning right now is land owners are the ones benefiting right now of having land. That's why maybe going a little bit riskier in terms of zoning brownfield. Planning is a way of also in 3, 4 years, making higher returns. That's why I was wondering if it is a great idea to sell the land when pricing is so, so strong.
We don't think so because then we lose our -- then we can't grow anymore. If you sell the land bank, we can just take some short-term margin, but we lose our growth pattern.
Okay. And in terms of ideal size, what would be the -- if you could choose what sort of size in terms of land bank would you have to own right now?
Well, let's say, 3 years ago, we also -- we already doubled that at that moment from EUR 50 million to EUR 100 million. And today, it's above EUR 100 million. But first of all, it's the replenishment rate that's the most important thing, because as the slide indicates, we will in 1 year, have replenished it. So that also means that we are successful in leasing it out. But we would be okay with EUR 200 million as well. It would still be relatively low, if it would be at 4%, 5% of the entire portfolio. But it's always a balance of searching land and then leasing it out. Of course, owning land is in this market, a strong feature, but having the teams and the boots on the ground to continuously replenish it and get your hold of the permit as well.
We develop them too fast, so we cannot let the land bank growth.
Okay. That is a good quote. Last one. Maybe it's too financial, but what should we expect from your 2022 business plan in terms of earnings growth? Should we expect an acceleration from the 15% more or less you are achieving right now year-on-year, or do you expect on your business plan and the developments are going to start generating income in 2022 kind of a slowdown or even going up just to see how well we are versus reality?
Well, there, we can only say that we do not give intermediate guidance of the next year. We always give guidance for the year ahead, and that is still -- we are still in '21. And so for '22, we will communicate on -- at the full year results. And you know the long-term guidance in '24 is at least [1.25].
Frederic tried that's already in August, even there the same thing. Isn't that Frederic?
Yes, it is indeed.
[indiscernible], go ahead.
I got a question you read a lot about politician and the choices, that want to limit the issuance of land and permits for large-scale warehouses. Could you please comment on your recent discussions with local federal government regarding this? And if this has an impact on your strategy, for example?
Well, let's say it's a discussion that is already going on since 1 or 2 years in the Netherlands, they discuss about the planning of the country, which is a good thing. And now we have the idea of it, there was built too much. Do we have to continue this? Do we have to use our land better since we need more houses. I think it's a good discussion just saying that, indeed, we have -- that they think or they advice it's -- that we should stop with all the logistic developments, I think that is not a good idea, since indeed, we have today logistic, real estate, the supply chain at the heart of every business. I think 20 years ago, countries or regions try to attract an automotive production side in order to get technology clusters, they also try to attract main headquarters because this would bring profits, I think now when you are able as a region to attract distribution centers, you get also clusters of technology around that. And also in headquarters are sometimes even now moving towards the distribution centers. So do we need, let's say, as a whole region in Western Europe, I think, think about the future use of land? Yes, but smartly. And yes, we have to be careful about land usage, but just saying let's stop, I think there should not be a good point. But on the other hand, if that happens, then say, then the owners of land, they will be at a good size, because then you will not be able to develop any more in the extreme case, but then -- and the one who owns the land like we do, they will have profit because their land will become more expensive and then you will be able to do more on existing land. So for us, as being a developer and an investor, let's say, we can profit of both like a good Dutch football asset, right now they will have a similar deal.
That's very clear, especially with the football quote, it always helps. Second question, last question. As you mentioned that the valuation increases were especially due to a small part in specific areas in Belgium, I thought you said -- Could you please say which areas these are and going forward, which specific areas you think valuations will increase most?
But that was mainly a comment on -- not the valuations were across the board in terms of the yield shift. It was rather the -- so that was the main component, almost 2/3, 55% of the revaluation. So that's across the board with stronger in Belgium and the Netherlands, of course. And the ERV uplift of 2% on average across the portfolio was driven by 5% to 10% uplift in the market rental value of specific locations in Belgium and the Netherlands when there is scarcity becoming a play. Like, for example, Belgium. I'm thinking about Zellik where you cannot extend the industry zone, where really you cannot buy any land anymore.
So it was for the ERV specific regions, but the revaluation across, let's say, on average across the board, the same.
Okay. And so you mentioned Zellik,which other areas do you see the most ERV increases?
Different points and then really it's nothing.
It's simply in micro market. And it's more difficult ...
Specific micro markets. or even in industry zones even not -- it's not the north of Brussels, it's a Zellik, for example, and that's one city. It's really micro.
And we have a final question from Andreas.
Just a question there. You said logistics distribution is now a key part of the business. Do you see any tendencies of home shoring, i.e., when you -- when big [indiscernible] want to place a new factory, et cetera, they are more likely to do that in Europe or than? [indiscernible] do you see that, do you think that those factories will be placed in Romania, where you have a lot of assets? Or are they more likely to be Germany, et cetera?
I think you cannot replace a factory or a production unit, let's say, within some months. So -- but I think that the global efficient worldwide supply chain has been disrupted and not once, but 3 times last year or this year. First, COVID then a small boat in a channel that ever given, and then also, the flooding -- water flooding was not only here in Europe, but also in China. So there has been 3x a disruption in the global supply chain. So yes, companies are now really strategically thinking about their, let's say, at the in-sourcing points. They are rethinking their strategies. And that can be, that's the most easy, just making a more strategic stock that you can realize it rather fast are even reshoring. But indeed, reshoring of factories that's not so simple. And then absolutely here in our crowded Western Europe, where we don't even want a distribution center should we then want a production unit near our houses. But there, let's say, Central and Eastern and, for example, Romania could be a good place for reshoring of production units, but let's say, we see people thinking about it, but not yet realizing. But the general trend is indeed from just in time to just in case.
That's right. And there's a lot of space in Sweden for factories or distribution centers. You're more than welcome to place them here. Final question on the [indiscernible] ...
Yes, of course, that labor too, we need also, not only land but labor.
Just a final question. Germany, the yield there is higher at 5.7% versus 4.9% in -- you only have EUR 12 million invested in Germany. I was just wondering if that is just for you and your assets, but I mean your assets have 0% vacancy rate, so it seems pretty low risk. Or is Germany in -- is Germany just higher yields? Does it make sense to me, but I just wondered ...
That's not Germany had the same yields, but is just, let's say, the moment now, it's only, let's say, in the existing portfolio. There is only one project, a small project we bought 1.5 years ago in Bottrop, or 10,000 square, an older, let's say, urban building that will be a future redevelopment in the future. And then the big project in Gelsenkirchen is still under construction, so that's still at cost and not at the yield. So let's say, the German figures are not yet reflecting a portfolio. It's only the start. And I think there, more in general, in Germany, we can say WDP was not affected by corona, except a little bit in Germany. We could not go and travel there. The German friends of the South could not travel to North Rhine-Westphalia. And we have no local boots on the ground like we have in Romania and in the Netherlands. So we had no local people to continue there. So let's say -- so it was very difficult to grow and to invest further, there the crisis came a little bit too early for us. But we could continue with our first project. We will finalize the first part by the end of the year. And let's say, we have a good view that we will be able to rent it. And then we can, let's say, we are now -- since we can travel again. We can meet -- I met Martin already again different times, we have had even a physical board meeting here in Wolverton together. So let's say, now we can really start again in Germany.
Wonderful. Well, we are very happy shareholders. Thank you so much for all the hard work you do for us.
And then Marc Eeckhout, do you still have a question?
My question, you just answered on Germany. A second one, the last investment was next to the highway [and to have rent] on a very important place Lokeren, and are there still investments coming next to the highways? Is this a kind of new strategy? Or is it bad because you are already a partner the DPG and [indiscernible]?
Yes. This is -- let's say, we are always interested in size, I would say, good located sites for logistics or sites near or almost near, let's say, the highways. So we don't want to pass -- even the best village, we don't want to pass. So we want and we want and we need space near the exits of the highways. But indeed, Lokeren was more specific driven by repeat business with DPG where, let's say, we bought 2, 3 years ago from then their old headquarter in [indiscernible]. And now, let's say, we could do on the same basis repeat business with them in Lokeren. And of course, this was one which was perfectly fit for us.
And then Michail, you still have a question?
Yes, I do, gentlemen. Just with regards to your pipeline and your ability to do additional developments. Just wondering if you could talk a little bit about the constraints that you might have on being able to accelerate it, whether it's risk management, you don't want to have too much development on the balance sheet at one time. Is it a financial situation? Is it tenant demand? Or is it just approval of building permissions and things like that?
I think it's -- it's not that we don't want to do more development. So there is no -- it's not a capacity problem. It is, let's say, driven by some projects are taking a little bit longer since you need more time for permits. And so -- but let's say, it's driven by -- mostly by our clients. We go for the land, we buy land, we replenish the land bank and we go for permits and then we wait for a client. And I think it's really client-driven. And land, we need to find land. We have some clients who want to do or who want to enlarge with us or do even new business, but we don't find the land. I think the most limiting factor is land for doing more. So then we still can ask if there is still somebody else who wants to ask us a question. If not, we looked in the meantime, also in the chat box. And there were no questions in the chat box that I would say if still somebody wants to ask a last question at the moment now. And otherwise, we can stop here, and we thank you for listening to us, and we hope to see you soon. And indeed, at least with the publication of our annual results at the end of January. Thank you all, and have a good afternoon or day. Bye-bye.
Bye-bye. Thank you.