VGP results for the first half of 2024

VGP NV, a European provider of prime logistics and semi-industrial real estate, announces results for the first half of 2024, ended 30 June.

Profit before tax reached EUR 154.6 million (up 218% compared to H1 2023), which includes €33 million of net rental and renewable energy income, €15.7 million of joint venture management fee income and €99.1 million of net portfolio valuation gains.

Lease agreements were signed and renewed to the value of €45.6 million during the first half of 2024, bringing the total annual rental income to EUR 384.7 million (year-on-year increase of 9.7%).

Record volume of new lease agreements of EUR 28.8 million (year-on-year increase of 47 % compared to H1 2023).

On a pro-rata basis, net rental income and renewable energy increased by 21% compared to H1 2023 to 91.6 million EUR 91 MILLION.

A total of 34 projects were under construction as at 30 June 2024 835 000 m², representing an additional annual rent of EUR 56.8 milliononce they are fully built and leased.

326 000 m² projects commenced in the first half of 2024, representing EUR 21.6 million of rental income once completed and let.

Share of pre-leases is 70.1% following the conclusion of several significant lease agreements. Properties that have been under construction for more than six months are 74.2% pre-let.

During the first half of 2024, 8 projects with a total 264,000 m²which have been 100% let and represent rental income of EUR 17.2 million.

The completed properties represent 5 632 000 m², i.e. 229 buildings, which are 99% leased and have an average age of just 4 years.

The total land area is 8.5 million m² with a development potential of 3.7 million m² following the acquisition of 375,000 m² of new development land and the sale of VGP's stake in Development Joint Venture LPM in H1 2024.

Renewable energy gross revenues increased 31 % year-on-year to EUR 3,8 million, despite a significant drop in energy prices, mainly due to the year-on-year increase photovoltaic (PV) capacity by 115% with an operating capacity of 143.3 MWp (compared to 66.6 MWp in June 2023). 29.7 MWp of PV projects are under development and a further 92.6 MWp is planned. The first 6.8 MWh battery project is also planned to support self-consumption and alleviate grid capacity issues. Further battery projects are expected.

A solid balance sheet with total cash of EUR 625 million VGP has drawn EUR 135 million from the European Investment Bank's credit facility granted in February this year up to EUR 150 million.

Net cash recycling amounted to EUR 662.1 million due to the closure of the Deka and Areim joint ventures and the sale of the Development Joint Venture to LPM Moerdijk. The third closure with Deka in August 2024 resulted in additional gross proceeds of €68 million.Subsequent to the balance sheet date, VGP repaid the €75 million bond due July 2024, which debt financing costs reduced from 2.25% in the first half of 2024 to 2.21% after repayment.

Outlook:

VGP has made an excellent start to the second half of 2024, having entered into a number of new leases that have significantly increased its pre-lease ratio and annual rental income. In addition, VGP is negotiating a number of leases, both for new projects and existing assets. This will contribute significantly to VGP's stated organic growth plan.

In addition, VGP expects to take significant steps in the leasing and development of its large brownfield projects, such as Rüsselsheim near Frankfurt, while making a number of attractive land acquisitions within the VGP Group in several countries.

Last but not least, there has been increased investor activity in the industrial segment, which should further stabilise property valuations. VGP is considering the further transfer of properties to its joint ventures as it is expected to realise additional rental income of EUR 35.2 million over the next twelve months

Source: VGP Group press release.