Business Forum • 4 September, 2024 at 10:13 AM
VGP NV, a European provider of high-quality logistics and semi-industrial real estate, announces the results for half-year ended 30 June 2024. The company recorded a pre-tax profit of €154.6 million (an increase of 218% versus H1 2023), reflecting €33 million of net rental and renewable energy income, joint venture management fee income of €15.7 million and €99.1 million net valuation gains on the portfolio
VGP registered €45.6 million worth of signed and renewed lease agreements during H1 '24, bringing total committed annualised rental income to €384.7 million (+9.7% YTD), and a record of €28.8 million of new lease agreements contracted, + 47% versus H1 2023. On a look through basis, net rental and renewable energy income increased by 21% versus H1 2023 to €91.6 million.
As at 30 June 2024, a total of 835,000 sqm under construction through 34 projects representing
€56.8 million in additional annual rent once fully built and let, while 326,000 sqm of projects started up in H1 2024, representing €21.6 million of rental income once fully built and let.
Pre-let ratio amounts to 70.1%, following the conclusion of several significant lease agreements to date. Assets which are longer than six months under construction are 74.2% pre-let. The Group delivered 8 projects representing 264,000 sqm during H1 2024, 100% let and representing €17.2 million of rental income.
Total completed assets represent 5,632,000 sqm or 229 buildings, are 99% let and have an average age of only 4 years. The total landbank stands at 8.5 million sqm representing a development potential of 3.7 million sqm after the acquisition of 375,000 sqm of new development land and the sale of VGP's stake in the Development Joint Venture LPM in H1 2024.
Gross renewables income increased 31% YoY to €3.8 million, despite significant fall in energy prices, driven by a photovoltaic (PV) capacity increase of 115% YoY with operational capacity at 143.3 MWp (vs. 66.6MWp in Jun-23). 29.7 MWp PV projects under development and a further 92.6 MWp being planned. A first 6.8MWh battery project is planned to enhance self-consumption and to alleviate grid capacity issues, more battery projects are anticipated.
Solid balance sheet with total cash at €625 million and a €400 million undrawn credit facilities availability. VGP drew €135 million of the €150 million credit facility of the European Investment Bank that was granted in February of this year. Net cash recycling of €662.1 million as a result of closings with the Deka and Areim Joint Ventures and the disposal of the Development Joint Venture LPM Moerdijk. A third closing with Deka effectuated in August 2024 provided for €68 million of additional gross proceeds.
After the balance sheet date, VGP repaid the €75 million bond that was due in July 2024, lowering the cost of debt from 2.25% per H1 '24 to 2.21% following the repayment.
VGP had a flying start in H2 '24 with the conclusion of a number of new lease agreements that significantly increase its pre-let ratio as well as annualized rental income. In addition, VGP is negotiating on a solid pipeline of lease agreements, both for new developments as well as existing assets. This will contribute well to the organic growth plan as set out by VGP.
Furthermore, VGP expects to take major steps in the leasing and development of its major brownfield projects such as Rüsselsheim, near Frankfurt, whilst materializing a number of attractive land acquisitions across multiple countries within the VGP group.
Finally, there has been an increase in investor activity in the industrial segment, which should further stabilize property valuations. VGP is looking into further disposals to its Joint Ventures as it is expected to activate another €35.2 million of lease income in the next twelve months.
VGP is a pan-European developer, manager and owner of high-quality logistics and semi-industrial real estate. VGP operates a fully integrated business model with capabilities and longstanding expertise across the value chain. The company has a development land bank (owned or committed) of 8.5 million sqm and the strategic focus is on the development of business parks. Founded in 1998 as a Belgian family-owned real estate developer in the Czech Republic, VGP with a staff of circa 372 FTEs today and operates in 17 European countries directly and through several 50:50 joint ventures. As of June 2024, the Gross Asset Value of VGP, including the joint ventures at 100%, amounted to €7.4 billion and the company had a Net Asset Value (EPRA NTA) of €2.3 billion.