VGP Trading Update: Surge in VGP's new contracted rental income doubles development activity
19 November 2021, 7:00am, Antwerp, Belgium: VGP NV (‘VGP’ or ‘the Group’), a European provider of high-quality logistics and semi-industrial real estate, today published a trading update for the first ten months of 2021:
- Record operating performance underpinned by strong client-led demand
- €63.4 million signed and renewed lease agreements (versus €34.6 million for 10M’20), bringing total annualized rental income to €240.5 million (+29.8% year-to-date)
- 1,619,000 m2 under construction – 2.2x the level of Oct 2020 – representing €100.0 million in additional annual rent once fully built and let (currently 80.7% pre-let)
- 427,000 m2 added to the completed portfolio, now at 2.87 million m2 (98.8% let)
- Expansion of land bank despite significant consumption secures future growth
- 17 million m2 of new land positions bought and a further 4.21 million m2 committed subject to permits
- Total land bank acquired and committed has grown to 10.49 million m2 (+37.1% year-to-date) which provides 4.69 million m2 of future lettable area
- Agreement in principle with Allianz Real Estate in respect of setting up a fourth joint venture with an investment capacity of €2.8 billion and first closing anticipated in 2022
VGP’s Chief Executive Officer, Jan Van Geet, said: “The year 2021 is turning into a record year in many respects as e-commerce demand continues to go through a structural shift and adjustments to business supply chains increase demand for warehouse space. We have achieved our best-ever new leases signed and square meters under construction whilst maintaining a high pre-let level of 80.7%.”
Jan Van Geet continued: " I am most delighted that we have managed to further expand our land bank. The level of elevated construction activity consumed a significant amount of our existing land bank, yet even on a net-basis we managed to continue to increase it – since December 2020 by 2.84 million m2 – as we have managed to secure several more iconic land positions during the last few months. These include positions in Vienna, Budapest and San Sebastián, and an extension of our existing park in Bratislava, that will drive our Group’s future prospects and growth. VGP further expanded its footprint across Europe as we have acquired a first land position in Serbia and will open our first office in France, allowing us to serve more businesses and communities across Europe. We are also expanding our renewable energy business with now 145.4 MWp in solar roof projects installed or in the pipeline.”
Jan Van Geet concluded: “In addition to our outstanding operating performance, the increasing engagement with our clients is a strong proof point of our successful strategy as we remain committed to using our resources to drive sustainable solutions to support our employees, clients and the communities we serve. Our expanding balance sheet and growing capital base allows us to expand our client-led construction activities and keep income-generating assets on our balance sheet longer. Our newly announced joint venture with Allianz Real Estate will, once operational, provide us with the ability to continue to recycle our capital expenditures and re-invest into new development opportunities”