Qrf City Retail Uncertainty regarding Inno stores resolved

The second largest tenant of QRF, Inno, has been taken over by Axcent of Scandinavia (50%) and Skel (50%, SKEL.IC BB). Both players have a good track record in department store acquisitions. The aim is to expand the department store chain into more Belgian cities. Inno suffered financially during covid and was lagging peers in the online retail segment. The uncertainty, notwithstanding the standalone operations from its holding Galeria group, is now gone. This is positive news for QRF as it de-risks the tenant profile while the current rental contracts and guarantees stay in place. As a reminder, the Inno rental contracts were renegotiated downwards in FY22/23 to create a more sustainable tenant-landlord relationship. This led to a drop in rental exposure to Inno from above 11% to 7.8% in FY23. We repeat our Buy and EUR 13.0 TP.