VGP NV, a European provider of logistics and semi-industrial real estate, has reported significant financial and operational growth for the first half of 2024, ending June 30. The company achieved a pre-tax profit of EUR 154.6 million, a remarkable increase of 218% compared to the same period in 2023. This profit includes EUR 33 million from net rental and renewable energy revenues, EUR 15.7 million in fees from joint venture management, and EUR 99.1 million from net portfolio valuation gains.
The company’s leasing activity was robust during the first half of 2024, with signed and renewed leases amounting to EUR 45.6 million, bringing VGP’s total annual rental income to EUR 384.7 million—a year-on-year increase of 9.7%. Notably, newly concluded leases reached a record EUR 28.8 million, marking a 47% annual increase. On a proportional basis, net income from rentals and renewable energy rose by 21% to EUR 91.6 million compared to the first half of 2023.
As of June 30, 2024, VGP had 34 projects under construction, covering a total of 835,000 square meters. These projects are expected to generate an additional EUR 56.8 million in annual rent once fully built and leased. Of these, 326,000 square meters of projects were launched in the first half of 2024, anticipated to bring in EUR 21.6 million in rental income upon completion. The company’s pre-leasing rates remain strong, with 70.1% of space pre-leased, and projects that have been under construction for more than six months are pre-leased at 74.2%.
During the first half of 2024, VGP completed and handed over eight projects, totaling 264,000 square meters, all of which were fully leased, contributing EUR 17.2 million to the company’s rental income. The company’s portfolio now includes 229 buildings, covering 5.63 million square meters, with a 99% occupancy rate and an average building age of just four years.
VGP’s land bank also saw significant growth, with the total area reaching 8.5 million square meters. The company added 375,000 square meters of new development land and sold its stake in the Development Joint Venture LPM, bringing the development potential to 3.7 million square meters.
In the renewable energy sector, VGP recorded a 31% year-on-year increase in gross revenue, reaching EUR 3.8 million, despite a significant drop in energy prices. This growth was driven by a 115% increase in photovoltaic capacity, which now stands at 143.3 MWp, compared to 66.6 MWp in June 2023. The company is currently developing 29.7 MWp of photovoltaic projects, with another 92.6 MWp planned. Additionally, VGP plans to launch its first battery project with a capacity of 6.8 MWh to support its own energy consumption and address grid capacity challenges.
VGP’s financial position remains strong, with total cash reserves of EUR 625 million and an undrawn loan of EUR 400 million. The company utilized EUR 135 million from the European Investment Bank’s credit framework, granted in February, to support its growth initiatives. VGP’s net recyclical cash reached EUR 662.1 million, bolstered by the closure of joint ventures with Deka and Areim, and the sale of its stake in the Development Joint Venture LPM Moerdijk. A third closure with Deka in August 2024 added EUR 68 million in gross income. Following the balance sheet date, VGP repaid a EUR 75 million bond due in July 2024, reducing its debt financing cost from 2.25% in the first half of 2024 to 2.21% after repayment.
Looking ahead, VGP is set for a strong second half of 2024, with plans to finalize numerous new leases, contributing to its organic growth strategy. The company also anticipates significant progress in developing its large brownfield projects, such as Rüsselsheim near Frankfurt, while pursuing strategic land acquisitions across several countries. Increased investor activity in the industrial segment is expected to further stabilize real estate valuations. VGP is also considering additional property transfers to its joint ventures, with potential rental revenues of EUR 35.2 million projected over the next 12 months.
Photo: VGP Park Olomouc
