In the first half of 2023, lease agreements worth EUR 36.2 million were concluded and renewed, bringing total committed rental income on an annualized basis to EUR 328.1 million (+8.2% YTD). Based on the so-called look-through approach, net rental income and renewable energy increased by 60% year-on-year to EUR 75.6 million.
Strong cash recycling of €267.9m resulted from the closing of two transactions with the Allianz joint venture and further recycling of more than €450m is expected during the third quarter of 2023 with the closing of the initial portfolio with the new Deka joint venture.
Profit before tax of €48.6m reflects net rental income and renewables of €33.5m (+96% y-o-y) and a €45.5m net gain on portfolio revaluation.
As of 30 June 2023, 24 projects were under construction with a total area of 732,000 sqm (of which 56,000 sqm in the Czech Republic), representing an additional EUR 50.6m in annual rentals once the projects are completed and leased (compared to a market average of approximately 50%, 90.7% is pre-let).
– Of the 236,000 sqm of project space commenced in the first half of 2023, 81.5% is pre-let, representing rental income of EUR 17 million once the projects are completed and fully let.
– In the first half of 2023, 13 projects covering 317,000 sqm have been delivered. 97.2% are leased, representing rental income of EUR 18.7 million when fully leased.
– Total completed assets represent 4,621,000 m2 or 207 buildings. They are 98,8 % leased and their average age is only 3,7 years.
In April 2023, EUR 150 million was paid on the bonds. The next bond payment of EUR 225 million will take place in September 2023 and will be covered by further cash recycling through joint ventures.
“The first half of the year has been productive and eventful, characterised by a significant increase in committed rent of €36.2 million on an annualized basis. We were pleased to welcome a number of new tenants to our portfolio, while successfully completing many transactions with our existing joint venture partners. In addition, we have seen prices in the construction industry fall, allowing us to launch new developments at favourable margins,” comments Jan Van Geet, CEO of VGP, and continues, “Many were certainly expecting news of an expansion of our joint venture model and I am confident that we have found a comparable DNA with Deka to maintain a long-term 50:50 partnership. By the end of the third quarter we will have closed our first transaction with gross assets of over €700 million and by the third quarter of 2024 the entire portfolio of over €1.1 billion will have been transferred to the joint venture, allowing VGP to recycle over €700 million in cash. This joint venture will be operated by VGP in a similar way to the existing ones and, I am told, the transaction is the largest in Europe so far this year. I believe I can proudly state at this time that this is testament to the ongoing quality of our portfolio.”
“As expected, the recent turmoil in the real estate industry due to rising interest rates has revealed many opportunities and we are ready to take advantage of them. As a result, VGP has acquired the exclusive rights to several iconic industrial sites located in absolutely perfect locations. In this regard, our solid balance sheet and transactions with existing and new joint ventures allow us to recycle cash to sustain continued growth. I am really excited about this prospect and look forward to updating you on further developments,” concludes Jan van Geet.
