Hello, and welcome to the Klepierre's First Half 2020 Earnings Call. [Operator Instructions] I am now handing you over to your host, Mr. Jean-March Jestin, CEO, to begin today's conference. Thank you.

Good morning, everyone, and thank you for joining us this morning. I am Jean-March Jestin, Chairman of the Klepierre Executive Board, and I'm happy to be here with Jean-Michel Gault, our Deputy CEO to present Klepierre 2020 half year earnings. In this presentation, we will cover 3 topics. First, I will provide you with an update on our business, then Jean-Michel will go over the financials before I wrap everything up. So let's start with a review of our business. Good news is that all our malls over Europe have reopened since the second week of June. As you are aware of, there has been a lockdown in most countries where we operate roughly between mid-March and mid-May. Except in the Netherlands, Sweden and Norway, where stores and malls remain open over the period, even though the pandemic impacted the footfall. Since early May, our mall started gradually to reopen, first in Germany, then in Poland, Denmark and so on. Its reopening process ended with large malls in the Paris region and in Portugal. Today, all restrictions have been lifted, and pretty much all our stores have reopened as well. As you can see on the chart, reopening is gradual as reopening a store requires time to implement proper sanitary measures, time also to mobilize staff, which were in flux scheme and also time to readjust assortments. In the coming weeks, we expect the store opening rate to keep improving, notably with the reopening of cinemas and travel agencies that are still closed in some cases. Obviously, for these reopenings, we have made sure that our places were and continue to be today as safe as can be. Our sanitary protocols, which have been certified by Bureau Veritas were ready before the end of the lockdown. This allowed us to be very swift in the reopening. Our teams have done a fantastic job in this respect, and this has been key in the successful return of our shoppers. And I want to thank our teams for this absolutely remarkable achievement. And I must say that we have been positively pleased with the pace of recovery that we have been experiencing since the end of the lockdown. We have different benchmarks from other countries in Asia. So honestly, I did not expect such a quick restart in terms of footfall and sales. In June, excluding the days of closure, retailer sales reached 85% of last year level. This is also a significant improvement compared to May. It is all the more encouraging than sales and promotion that usually occur in June were pushed to July and August, making the comparison to last year even more challenging. We also see footfall improving in July, which is once more, an encouraging trend. Of course, sales performance showed disparities, notably by mall, as shopping centers that rely on commuters or office workers or tourists, take more time to recover, but these disparities tend to narrow over time. There are also disparities by countries. It is encouraging to see that in countries where stores remain broadly open, , meaning that they only enforce partial lockdown measures, sales have almost fully recovered already. In June, retail of sales in these countries, i.e., Norway, Sweden and the Netherlands, reached 96% of last year level, showing also a clear improvement compared to 83% in May. The recovery has been particularly strong in Norway, where sales were 9% higher in June year-on-year. We can also see dispersion in terms of retail segment, household equipment, consumer electronics or supermarkets have all recovered already. On the other hand, segments such as fashion, food and beverage or health and beauty are yet to fully recover, notably due to the sanitary measures in place, which makes their business less customer-friendly to operate. Still, they are showing an improvement compared to the first month of reopening, and we expect this trend to carry over in the coming months. Let's now turn to rent collection. We have collected over the first half, 83% of the non-deferred rents and service charges. This collection rate stood at 62% for the second quarter only. You may know that we have deferred part of the Q2 rents with the cash position of our retailers. And this represents about 1/3 of the €341 million that we have invoiced for the second quarter. Obviously, rent collection has been impacted by the lockdown period either because we decided to defer payment, as I said, or because retailers post payments on their own or due to grace periods decided by some governments. In total, for the first half of the year, €221 million in rents and service charge remained to be paid as of June 30. This is a bit more than what the lockdown period represent, i.e., €194 million for several reasons. The most straightforward explanation being that some of our tenants wait for the outcome of our negotiation with them before resuming payments. We have indeed engaged in intensive discussion with them regarding the payment of Q2 rents with a special focus on the lockdown rents, proposing rental arrangements against the lease extension or other forms of compensations. To be fair, as for retailer sales, rent collection rates also vary from one country to the next. Countries where stores did not close or which were among the first ones to reopen, are posting better numbers as we started negotiation earlier. This includes Norway, Sweden, the Netherlands and Germany. In these countries, rent collection is now standing at 88% for the full first half and 77% for the second quarter only. On the other hand, in geographies where lockdowns ended more recently, i.e., France, Italy, Iberia, rent collection for Q2 is lower, with 76% for the first half and 40% for the second quarter only. This is set to improve as discussions with our tenants progress. Indeed, as I said earlier, we have entered into negotiation with our retailers to find mutually acceptable deals to settle the lockdown rents. And actually, we noticed a clear correlation between deal-making and rent collection. Negotiations have intensified, as we have already approved 900 deals, representing about 10% of our rent whole and we expect to finalize all the deals before the end of the year. And when it comes specifically to the month of July , the collection rate is standing at 68%, and this is growing every day. Although a lot of our efforts have been dedicated to the lockdown and its consequences, we have been able to pursue a current leasing activity. We have signed close to 400 leases in the first half and kept opening flagship stores throughout our portfolio. This has been done with a positive reversion. Among the loan mark openings of this half, I would like to stress the opening of a Primark store in Belle Epine in Paris where Zara and Bershka stores have also been fully refurbished and rightsized. On another note, the Sports segment has kept its dynamic trend with, among others, new stores of Foot Locker, Nike, Decathlon and Icixl. Lastly, on top of this iconic store, the group has also inaugurated 2 brand-new destination food concepts at Emporia in Sweden and Novy Scmichov in Czech Republic. The food offering will be a mix of many international brands and will be complemented by more local restaurants. Ultimately, this will further enrich the unique retailer mix of these 2 leading malls of Prague and Malmo. A few words on Act for Good. We reached earlier this year our objective of our ESG road map, 2 years in advance, by getting our low carbon strategy validated by the science-based targets initiative that most of you know. This is a scientific body, which and as [Indiscernible] of the United Nations assesses whether company strategy is aligned with the global warming pathway by the Paris agreement. Basically, it says whether as a company, you contribute or not to limiting global warming to 1.5 degree. And we do, with the low carbon targets that you see here regarding our own direct emission, but also the emission related to our retailers and our visitors. Only 3 real estate companies in Europe got this SBTI certification, only 3. And I think it confirms our real leadership in the fight against climate change. And as we want our most to add value to the territories where they are located, we made sure they supported local communities during lockdown, which they did through a variety of actions, including food and blood donations or welcome areas for victims of domestic violence. Now a few words on our development pipeline to finish with this section. Our flexible pipeline, which is focused solely on extensions allow us to adjust quickly our spending. Besides, if you look at the projects that we have started, we only have €144 million left to cash out by 2022. As you can see, a quite committed amount. Still, we are able to keep on with the project that we have recently started, the main one being Gran Reno in Bologna. Construction started in April 2019 but works have been suspended mid-March 2020 due to the lockdown and have gradually resumed by the end of June 2020. And as a result, the opening is now expected by the end of 2021. The leasing is advancing well, and 65% of the area is predebt. On this note, I leave the floor now to Jean-Michel, who is going to give you details on our half year earnings and our financial situation, and explain how we have also immediately reduced our cost base with immediate effect on H1 and strengthens our balance sheet with new financing at very favorable condition. Jean-Michel?

Thank you, Jean-Marc, and good morning, everyone. Before digging into the details of the figure, let me introduce this section with a couple of comments on accounting and IFRS treatments. Rents have been invoiced in full as per the contract, including for the period subject to administrative closure, and as such, have been recognized as revenues in the P&L. The 2 main IFRS standard that we applied to the unpaid rents are the following

first, IFRS 16, in the case we are renting a discount to a tenant such impact has to be straight-lined over the minimum term of the lease. In H1, the impact was very limited at less than €1 million; and secondly, IFRS 9, the provision for bad debt has been accounted for tenants that have entered in an insolvency proceeding for which we can reasonably expect such an outcome. On this specific item, the provision has increased by €11 million in H1. Moving now to the net current cash flow, having in mind the accounting principle I have just described. Our net current cash flow per share reached €1.37, a limited 1% decline compared to last year. This is a reflection of the mechanical impact of the COVID-19, including a subdued leasing activity, which has translated into a slight higher vacancy, loss in variable income, lastly, a strong reduction in cost as a result of the action we have implemented as soon as the lockdown started. Let me go now in a bit more detail in the P&L evolution. Starting with our net rental income. Our NRI declined by 9%. The disposals made in Portugal in April 2019 in Hungary at the end of the same year, and in France, early 2020, have led to a €17 million decline in our revenues. ForEx in Scandinavia and Turkey weighted also on our performance, partly balanced by the first contribution of Creteil Soleil expansion. Lastly, our NRI declined by 5%, excluding disposal and ForEx, we don't call it exactly like-for-like because of the peculiarity of the first half. On the positive side, we kept benefiting from positive indexation for 1.3% and reversion over H2 last year and early this year. On the negative side, more than 2/3 of the NRI decline is coming from lower variable income, including sales base rent as a result of the retailer sales decline in H1, minus €12 million, lower specialty leasing income as our mall were closed during close to 2 months, minus €5 million and lower CapEx income as a result of lower footfall, another minus €6 million. Besides, as I told you earlier, provision on bad debt have increased by €11 million, reflecting the increase in insolvencies. Lastly, the delayed leasing activity has weighted on potential reversion and triggered a slight increase in vacancy, as we can see on the next slide. Indeed, in H1, our vacancy has gone up by 80 basis points. On top of the software leasing activity, we had an impact from the bankruptcy, notably in Scandinavia. It's worth to highlight that so far, roughly 2/3 of the stores of retailers that entered into insolvency procedure ended up being backed by another retailer. Moving now to our cost base. As soon as the lockdown started, we have implemented very quickly a plan aiming at reducing our cost base. I think it has been quite efficient with a €15 million drop in H1. This is mostly coming from lower payroll, but also administrative expenses. We were able to have a significant impact immediately on H1. And obviously, we will keep benefiting from these measures over the second half of the year. Like G&A, the cost of debt was further reduced. This represents another €10 million savings, indeed, as bonds have been refinanced at much more favorable conditions, our average cost of debt is now standing at 1.2% compared to 1.5% last year. And actually, this 1.2% is quite comparable to what we can see in the secondary market currently. Indeed, for a 10-year maturity, euro swap, we are at minus 0.2%, while our credit spread for this maturity is now standing at 1.5%, which make 1.3% compared to the average cost of debt at 1.2%. The bottom line is that we expect our cost of debt to remain at a low level in the coming years. To conclude this part of the P&L, a quick word on tax expenses, which have been reduced by €10 million. This is, first of all, the reflection of lower revenues and higher bad debt provision which in many countries are tax deductable. This represents €7 million savings beside, we benefited from €2 million of supportive fiscal measures in Italy and Poland. Lastly, we also had favorable tax settlement in France and in the Netherlands for another €2 million. Let's move now to the balance sheet and starting with the portfolio valuation. For the first half, the portfolio valuation has declined by 2.8% on a like-for-like basis. This is a minus 1% cash flow effect and a minus 1.7% market effect. Values have increased discount rate as well as exit rates and take more conservative NRI assumptions for 2020 and 2021. It translated into a 10 basis point increase of our EPRA net initial yield at 5.1%. This compares to a weighted average risk-free rate of 0.4%, showing a very wide risk premium of 4.6%. By country, they were a positive reading of recent transaction in Spain, while the French one slightly weighted on the valuation of some of our assets. Moving to the next slide and to the new EPRA NAV metrics. I'm not going to comment all the new metrics, but let me just quickly highlight the differences for Klepierre between the former EPRA NAV and the new EPRA NTA. According to the new metric, we consider that we are a seller of some of our assets and therefore, crystallize a part of the deferred tax and transfer tax. The new definition in the computation of deferred taxes and real estate tax led to a negative €1.5 impact per share. Besides picking from net tangible asset value, we know we now exclude intangible, such as for Klepierre, the fair market value of the management service companies that are externally appraised once a year. This is another €1.2 per share negative impact. Overall, our EPRA NGA is standing at €34.9, while our EPRA NAV reached €37.5. Moving to the change in the net debt over the first half, it has increased by roughly €300 million as a result of the increase in receivables during the second quarter, which including VAT reached €273 million. Excluding this increase, net debt has been kept broadly stable due to limited CapEx and disposal proceeds. Overall, our loan-to-value is now standing at 40%. This side, we have been very active in the first half to strengthen our liquidity position. Indeed, we have accelerated our refinancing plan in order to cover our refinancing needs for the next 24 months. During the first 6 months of the year, we have raised €900 million of bonds at an average yield of 2% for an average maturity of 9 years. Hence, our liquidity position is now standing at €3.1 billion, excluding €1.2 billion of additional revolving credit facilities backing the same amount of commercial paper. The average maturity of the liquidity position is 4 years. Okay. Now I hand over to Jean-Marc for the conclusion.

So thank you, Jean-Michel. So what should you take away from this presentation? Regarding our earnings for the first half of 2020, after close to 2 months of lockdown in virtually all our countries of operations, our malls have reopened everywhere since early June. The reopening has been quite satisfactory with footfall and retailer sales ahead of initial expectations. In June, sales reached 85% of last year level, with already some countries and some segments which are already back to last year level. And I think this is an encouraging start. In July, the improving trend in terms of footfall is enduring, and this might argue a possible return to close to pre-crisis level in the coming months. Even though our collection rate has obviously been impacted by the lockdown, the recent intensification of our negotiation with retailers make us confident that we will manage to find agreements with most of them and this will trigger a gradual improvement of the collection rate in the months to come. Projecting ourselves to the end of this year and beyond, we should remain conservative and optimistic at the same time. To be sure, considering the still limited visibility we have at this stage, notably regarding the economic environment and the potential second wave, we are not in a position to provide you with guidance for the full year earnings. We will, of course, continue to manage very carefully our financials with a close eye on spending and liquidity position, and we'll update you in due course as we get a clearer view on the pace of business recovery. In the longer term, I remain truly convinced that retailers will continue to refocus their operations on the most productive stores and the most attractive retail destination for their customers. And more importantly, we remain firmly committed to making sure our malls are run and manage in a sustainable way that contributes positively to our communities and to the environment. This concludes our presentation. And now I leave the floor for your questions.

[Operator Instructions] Our first question comes from the line of Florent Laroche-Joubert from ODDO. Please go ahead.

Hi. Thank you very much for taking the question. This is Florent Joubert from ODDO BHF. So I would ask maybe 2 questions. First, so I understand that you are not able to give us a guidance for the full year. But maybe could you please give us some color about your visibility or your intention about your dividend policy for 2020? So that would be my first question. And my second question will be on the valuation of your portfolio. I would like to know if it's possible to have more colors about your discussion with [indiscernible]. In particular, I have noted that in your press release, there is a mention about material valuation and uncertainty. So I don't know if you can share a little bit about that.

Okay. Thank you, Florent. So we are mid-2020, if I remember well. And the dividend for a year is always decided at the end of the year or beginning of next year. So I think it's far too early to say. We keep committed resuming the business and making sure our malls are open. And strengthening our balance sheet. I think we did pretty well. And the question of the dividend will be for the end of the next, beginning of next year. So for valuation, I think we have been pretty transparent. And we indicated that the valuers have inserted into the valuation a specific clause, which is recommended by rix which is a material valuation uncertainty, which basically says that they have factored in the valuations, the COVID-19 known impact, but the unknown impact of COVID-19 on the long term, by definition, as they are unknown, cannot be factored in the valuation. And consequently, they state that the valuation should be closely monitored frequently. So I think they have clearly indicated that they are not in a position today like anyone else to draw a conclusion of the COVID-19 on valuations. And when they will have enough evidence either on transaction or leasing transaction, they will probably adjust what needs to be adjusted.

The next question comes from the line of [Jeff Quin] from Kempen.

A couple of questions from my side. I'd like to do them one by one, please. So the first one would be on rent relief. It seems you have not done a lot of that already. So I'm guessing this is a strategic decision not to hand out rent holidays or relief just yet. So maybe you could confirm that? And then maybe to frame your expectations about kind of the share of rental for 2020, which is still at risk. I mean, would you kind of agree that 10% to 20% of the whole year's rents are still kind of at risk?

Yes, for your question. So I think, once more, let's be very, very clear. We have €221 million of rent and service charge, not collected as we speak, okay? And when we look at the rents and service charges, which have been charged or invoiced to the tenant when the shops were closed, okay, this is €194 million. So there is not a big gap. So the discussion we have with our clients, retailers, is how we can settle this unprecedented situation where rents have been charged during the closing period. So we are progressing pretty well on that front. So are we going to recollect 100% of the €221 million? Probably not. But we are confident we will recover a significant portion of it. And in compensation, we will have negotiated lease extensions or new stores or other form of compensation because the relation we have with our tenants is not only on 2 months of rent. It's a 5 to 10-year relation, and we are sure we will go through that episode very quickly. And we will be fully transparent to the market when we know exactly the outcome of such negotiation. We have signed 900 lease deals today, so which is 10% of rent roll, and we are progressing every day. I'm sure we will close that before the end of the year, as I just said.

And then maybe could you address Italy because I think that has the lowest collection rate at 15% of Q2. Could you kind of share your expectations for the rent recovery for Italy? Is that because of the government regulations payments have been lagging? And do you expect this to recover in line with other countries? Or do you expect a higher permanent impairment there as well?

I think the , there are always specificities. I don't want to make it too simple. I think the , when you look at where the COVID-19 has been the most terrible for populations and for the economy, it's probably the south of Europe with Spain, France and Italy where the lockdown has been , seriously impacted organization. So Italy is also one of the countries that opened at the latest. And it's clear that the , resuming the payments, it's a challenge, but we are confident that this will follow exactly the same pattern that we have in other countries. We can see a big gap between the north of Europe, where, as you have seen, we have collected double than the south of Europe. So there are different specificities. But I think the main one is the magnitude of the crisis and the time of reopening. That has been the main impact. So for Q2, when we look at Q2, as Jean-Michel is giving me the numbers, thank you, Jean-Michel. So for Q2 in Italy, we have invoiced €55 million, so €23 million is due, and we have deferred €31 million. So we have also a very significant amount of rent charge for Q2, which is deferred, so more than half. So basically, they will be paid when they are due, which is, if I remember well, in September.

All right. And then finally, on the collection rate, can you please confirm this doesn't include invoking of bank deposits and rent guarantees?

No. No. Yes, I don't know if it is no or yes, the answer. We have, in hand, we have €280 million of security deposit or first demand bank guarantees, which are being provided by tenants to cover any rent areas during the lease period. So we have this in hand, but we have not , the amount of rent, the receivables, the €221 million I was referring to, is not net or the deposit and the bank guarantees. We have more bank guarantees and security deposits and receivables due as of June 30.

Yes. I guess that, that covers the kind of coverage of the outstanding receivable, but I guess in terms of the collection rates you've presented for Q2, that doesn't include rent that you have collected, but in fact, was calling in of the deposits. So kind of the collection rate doesn't include any cash from deposits.

No, no, no, no, no. No, we have not started yet. [Indiscernible] to your question.

Okay, sure. Thanks.

Our next question comes from the line of Sander Bunck from Barclays. Please go ahead.

Good morning, team. Three questions from me, I'll do them one by one. First one, can you say anything on the Q3 rent collection progress thus far?

It's very clear. We have moved from a quarterly invoicing of payment obligation to a monthly payment obligation. So for the month of July, with no deferral because the month of July is not deferred, we have collected so far, as we speak, 68% of the month of July. And we have also collected a little bit of August and September, even though they were not obligated to some of the tenants have also paid August and September. But to a more limited amount.

Have all your leases switched from quarterly to monthly events?

Sorry?

Have all your leases switched from quarterly to monthly invoicing?

For Q3, yes. I think we have to be pragmatic, where our tenants are getting out of a crisis. So liquidity is clearly an issue for them. And paying a quarter in advance is probably not the right -- the easiest thing to do. So we are very pragmatic. So we are -- we have invoiced July, August and September at once, but we have made it clear that they can pay on a monthly basis. [Indiscernible] we will adjust.

Okay. The second question I had is on kind of looking beyond what's currently happening in terms of like how you are renegotiating your leases once on a more sustainable basis. And particularly with the variable rent element in there. I think at the moment, the contribution of variable rents within your overall rental revenue is still relatively low. I presume a lot of your clients or tenants are asking for that variable element to increase going forward. How are those kind of discussions going forward? What are you willing to accept? What are you not willing to accept with regards to variable leases and where would you be happy with?

We -- as you can see, or as you can read some tenants are very vocal about what they would like us to do. But we can say what we are not going to do. So we are not going to switch from the current lease structure with MGR plus sales based rent to only sales base rent. The amount of sales base rent in '19 is on top of my head, to be -- check is roughly €45 million for Klepierre. And when you see in H1, the impact of sales based rent is mainly the sale base rent, which is paid on top of MGR. We have only a very limited number of leases that are pure SBR at Klepierre, probably less than 1/3 of the €45 million or half, between the 1/3 and the half of the €45 million I was referring to, and that's it. So we are not going to change the business model. We are going to provide support to our retailers. Probably first to the one who needed the most, and it will take different forms, but we are not going to change the lease structure.

Okay. And just because the €45 million, obviously, in the grand scheme of things, is still a very low number. And I presume at some point, you have to meet your tenants somewhere in the middle. So rather than going to 100% sales based to a very small amount now, do you see this number increasing to, say, 10%, 15%, 20% of the rent roll? Or is that even too optimistic? Or do you think it's always going to be lower than that?

Well, I don't see, today, the business model we have with our tenants is probably sometimes it's misunderstood. Our lease agreement in Continental Europe, there are not very long leases. In France, they are 10 years. But every 3 years, a tenant, they can evict, they can get out. And the average duration of a lease in Klepierre, I think, if I remember well, it's around 6 years or between 6 and 6.5 years, okay? So by definition, at the end of the lease, the rents have to be reviewed, renegotiated. And we are not of the view that we should implement sales based rent structure for only 5 years or 6 years. And I don't expect our, I would say, the number of leases subject to sales based rent increasing to the number you are referring to. And as more, to be very clear, on the €45 million sales base rent we have, okay, only less than half of it is pure SBR. The rest is overage rent, i.e., sales base rents that are triggered because performance are better than initially expected and the trigger additional sales base rent on top of MGR, okay? But I don't want to spend too much time into details like this for €45 million.

Understand. Okay. And the very last one is on disposals. Obviously, the LTV is now closer to kind of the upper limit. I don't think you've heard to any changed disposal targets. Is this something, are you willing to up your disposal target? Or what are you seeing on disposals at this point in time?

We, how you say, no change. We never gave any target, medium or long-term, okay? And on the disposal, we never gave any target. We are still working on a disposal program. We were used, in the past, to do around €500 million to €600 million disposal on a regular basis. Probably this year due to the circumstances, it will be lower, but this will resume when the market reopens.

The next question comes from the line of [Rob Jones] from Exane.

Sander has stolen quite a few of my questions, but I'll go ahead with a couple of others that I had as a backup. So just firstly, obviously, guidance not been reintroduced yet, completely understand that. What I wanted to understand is of things that are within your control, what do you need to see to get comfortable, to get to the point where you can think about reintroducing that guidance? Is it a certain percentage, for example, of tenant discussions completed or some other metric? And then just secondly, on those tenant discussions, you said, are you only, you've completed, I think, 10% so far obviously, you can buy as commented this morning that has completed 25% of its discussions. How confident are you that you can complete those discussions by the end of the year? And then just a final question around the bank. Obviously, you made the point that you've got just over €200 million of rent receivables at the moment, bank guarantees of €280 million. What I'd be interested to know is of the rent receivable, i.e., the leases that are in arrears, what are the bank guarantees in relation to those leases? Because obviously, let's say, you only had 30% of your rents in arrears, you might be in a position where actually the bank guarantees in relation to those rents is only about 30% of the €280 million. Just maybe give a bit of color on that.

Thank you, Robin, and I listen well your name today. So the first question, I think we, what we want to clearly say, we had an encouraging restart of operations, okay? And this is factual. So sales are 85% compared to last year. Footfall are a little bit lower, but transformation rate is better. So this is factual. Anyway, we are still very, I would say, cautious about what would be the development of our operation in the months to come. So that's the reason why because of the sanitary environment, the risk of further closure, we are not in a position to give a guidance. So I think reasonably, the consequence of this is that by Q3, at the end of Q3, we will probably have a better view of the impact of COVID-19 on the 2020 earnings. That's what I, probably I can say. When we talk about the leasing negotiation, it's by definition, a lot of work to do. Either we give up everything or either we get everything. And probably, this will be in the middle, somewhere in the middle, but it takes time. But the negotiation is not only about the rent for the closing period, it is also the global relation and the new stores to open and some leasing operations, which were under the execution. So, but I'm very confident that by the end of the year, we will have closed all this, and this will be behind us. I'm sure. We have no other choice in doing it. I think it's important to see in the coming months, the rent collection for July, August and September, which will be also very important to monitor. Yes, for the guarantees, we have €268 million of security deposits, which we already have in our bank accounts and guarantees, which are bank guarantees. And to your specific question, does it match specifically to each and every receivable, I will say, in general, yes. So there is receivable in areas in the €221 million we are referring to. There is a bank guarantee covering it. Our security deposit in general terms.

Great. Thanks very much.

[Operator Instructions] And our next question comes from the line of Bart Gysens from Morgan Stanley. Please go ahead.

Hi, good morning. Can you hear me.

Yeah. Very well now.

Look, I appreciate that your malls have been open only relatively or have reopened only a relatively short period of time. And that tenant sales growing back up to 85% of previous levels is in itself, not a bad result. But of course, I think a lot of your tenants have very low margins. And selling 15% less than planned, it's probably an issue for a lot of them. It means that they're probably still loss making. And probably things will probably will get better but do you have a gauge on how many -- or what portion of your clients are actually loss-making currently? And by how much sales need to improve for them to breakeven? Do you measure that at all? Do you have visibility on that? Because it's all good and well to talk about collection when you were closed, but I guess the more important issue is what will be the ability of tenants and the willingness of tenants to pay in the future? And how many tenants are going to survive this if they don't breakeven for several months? Thank you.

I think your question is very fair and very legitimate. We are not saying that there is no crisis, and we are not saying this -- we are not in challenging times. And our retailers are also in challenging times. We are just seeing that the restart of operations is earlier than expected. And it is 85% compared to last year. But it is also fair to say that the retailers are going to take actions to protect their profit. And there is not only the rent component in the P&L of retailers, but there are also the number of people per store. And finally, also the cost of product they are selling. So -- and you are right, what the challenge for us is in the next weeks and months to monitor the financial situation of our retailers, and we will have to be pragmatic. But when I look at the -- and I think we have that in our exhibit to our financial statements. We have the lease of our main tenants that represent a significant portion of our rent roll. We believe that most of them have the capacity to go through this crisis. But I will be very modest and humble answering the question. We are facing something which is unprecedented, so difficult to predict the future.

Great. Thank you very much.

We have no further questions on the phone lines.

So we'll take the question from the webcast. The first one is on the 900 leases that have been signed or approved, what are the impacts in terms of rents compared to previous leases?

So we are, if we look at H1, the concessions we have done for the deals which have been signed, was €12 million. And the straight-lining of this is €1 million H1, and the rest will be H2 and 2021 and 2022. And I'm not going to comment more on what percentage of the initial rent, it is. I think the, I think what we want you to understand is that we have €221 million of receivable for Q2, out of which €194 million are the rents for the lockdown period. So that's what we are discussing with our tenants. So you have a pretty good understanding of what is that stake for Klepierre, and I'm not going to comment and tell you exactly where we will end. We would see when the negotiations are finalized.

We have another question from the webcast, which are the principle of Klepierre tenants during the closure period, reduction of MGR and ECS, what are the ranges?

We are doing a different type of negotiation. But I would say, basically, the basic of the negotiation is that if we have to abate some of the rent of the closure period, percentage is it, and what type of compensation we have. So this is the principle of the negotiation is a rent holiday for the closure period, end period. So I think there is, do we have more questions on the phone or shall we consider we are done?

We've got no further questions on the phone lines.

Okay. Very good. Thank you very much for all of you attending, and I wish you a good summer break. We all deserve it. Thank you very much.

Thank you for joining today's conference. You may now disconnect your lines.