VGP NV a European provider of high-quality logistics and semi-industrial real estate, today announces the results for half-year ended 30 June 2023:
- € 36.2 million worth of signed and renewed lease agreements during 1H’23, bringing total committed annualized rental income to € 382.1 million (+8.2% YTD) [1]. On a look through basis, net rental and renewable energy income increased 60% to € 75.6[2] million year over year.
- Strong net cash recycling of € 267.9 million as a result of two closings with Allianz Joint Ventures and further recycling of + € 450 million expected through seed portfolio closing with new Deka Joint Venture in Q3 ‘23
- A pre-tax profit of € 48.6 million, reflecting € 33.5 million of net rental and renewable energy income (+96% YoY) and € 45.5 million net valuation gains on the portfolio
- As at 30 June 2023, a total of 732,000 m2 under construction through 24 projects representing
€ 50.6 million in additional annual rent once fully built and let (90.7% pre-let, versus market average of cca 50%[3])- 236,000 m2 of projects started up in 1H’23 pre-let at 81.5%, representing € 17 million of rental income once fully built and let
- Delivered 13 projects representing 317,000 m2 during 1H’23, 97.2% let and representing € 18.7 million of rental income once fully let
- Total completed assets[4] represent 4.621.000 m2 or 207 buildings, are 98.8% let and have an average age of only 3.7 years
- Repaid € 150 million of bonds in April ’23. Additional bond repayments of € 225 million in September ’23 will be covered by further Joint Venture cash recycling
VGP’s Chief Executive Officer, Jan Van Geet, said: “It has been an eventful and productive first half of the year, marked by a considerable € 36.2 million of annualized committed rental growth. We are pleased to have welcomed numerous new tenants to our portfolio whilst successfully executing multiple transactions with our existing Joint Venture partners. Moreover, we are witnessing a decline in construction prices which allows us to initiate naew constructions at favorable margins.”
Jan Van Geet, continued: “I believe many have been waiting for an update on the broadening of our Joint Venture model and I am convinced that with Deka we have found comparable DNA to sustain a long term 50:50 partnership. By the end of Q3 a first closing comprising over € 700 million of gross asset value will materialize and by Q3 ’24 the entire portfolio, totaling over € 1.1 billion, will have transferred into the joint venture allowing VGP to recycle over € 700 million of cash. The joint venture will be managed by VGP in a similar way to our existing Joint Ventures and as I have been told, the transaction forms the largest of Europe in its class year to date. In these times, I believe I can proudly state that this is a testament to the resilient quality of our portfolio.”
Jan Van Geet, concluded: “As expected, the real estate industry’s recent shake-up on the back of rising interest rates has revealed a multitude of opportunities, and we are ready to capitalize on them. As such, VGP has signed exclusivity on a number of iconic industrial sites on absolute top locations. In this respect, our solid balance sheet and transactions with existing and new Joint Ventures facilitates us to recycle cash to sustain continuous growth. A prospect I am indeed very excited about and look forward to report upon as we progress.”
[1] Compared to 31 December 2022 and inclusive of Joint Ventures at 100%
[2] See note ‘income statement, proportionally consolidated’
[3] Based on Jones Lang Lasalle market analysis
[4] Of which 3.174.000 m2, or 154 buildings in JVs and 1.447.000 m2 or 53 buildings in OWN portfolio