Investors

Alternative Performance Measures

Alternative Performance Indicators used by VGP in regulated information	Definition
Annualised committed leases or annualised rent income	Annualised committed leases, also referred to as committed annualised rent income or CARA, represent the annualised rental income from all lease agreements signed within the Group. This includes (i) leases that have commenced and for which the property has been handed over to the tenant and (ii) signed future leases for which hand-over to the tenant is still to take place. CARA therefore reflects the full-year rental income potential once all signed leases have become effective, without taking into account any rent incentives granted. The financial statement line item most directly comparable with CARA is Gross Rental Income. The two measures differ mainly because (i) CARA includes signed leases that have not yet been handed over to the tenant and therefore do not yet contribute to Gross Rental Income, (ii) rent incentives are not deducted from CARA but are reflected in Gross Rental Income, and (iii) leases terminated or disposed to Joint Ventures or other divestments during the reporting period are no longer included in CARA, although they may still have generated rental income during part of the reporting period.
Annualised committed leases or annualised rent income (including Joint Ventures at 100%)	The annualised committed leases or the committed annualised rent income including joint ventures at 100% represents the annualised rent income agreed for all lease agreements signed within the group and its joint ventures. The joint ventures' annualised committed leases are recognised in full and not at the Group's share. This measure therefore reflects the full-year potential gross rental income for the Group and its Joint Ventures once all signed lease agreements become effective and disregarding any rent incentives granted.
Additional annual rent once fully built and let	Additional annual rental income once fully built and let represents the potential annual rental income that the Group could generate once a building is fully completed and fully let. The measure is calculated by multiplying (i) the Estimated Rental Value per m² per year (“ERV” – see Glossary), as determined by the independent property expert, by (ii) the total surface area that remains vacant. There is no directly reconcilable line item in the financial statements. However, this potential additional rental income is taken into account by the independent property expert when assessing the fair value of the investment property.
Cash generative leases	Cash generative leases are lease agreements for which the lease term has commencedcommenced, and the premises have been handed over to the tenant, meaning that contractual rental payments have become due and the asset is generating recurring rental cash flow for the Group. Lease incentives, such as rent-free periods or stepped rents, may still apply; however, the lease is legally effective and enforceableenforceable, and the tenant has taken possession of the property. The financial statement line item most directly comparable with this APM is Gross Rental Income. The two measures differ mainly because (i) cash generative leases are presented on an annualised basis and therefore do not reflect the timing of lease commencements during the reporting period, whereas Gross Rental Income is recognised based on the period during which the lease is effective, and (ii) rent incentives are not deducted from cash generative leases but are reflected in Gross Rental Income.
Net Activated Rental Income/New Leases activated	Net Activated Rental Income / New Leases Activated represents the incremental annualised rental income from leases that became cash generative during the current reporting period, i.e. lease agreements for which the premises were handed over to tenants during the period. The financial statement measure most directly comparable with this APM is the change in Gross Rental Income between the current and previous reporting periods. The two measures differ mainly because (i) Net Activated Rental Income is presented on an annualised basis and therefore does not reflect the timing of lease commencements during the reporting period, whereas Gross Rental Income is recognised based on the period during which the lease is effective, and (ii) rent incentives are not deducted from this APM but are reflected in Gross Rental Income.
Signed and renewed rental income	Signed and renewed rental income represents the annualised rental income secured or adjusted during the reporting period through new lease agreements, lease renewals, lease amendments and indexation. It includes (i) rental income from newly signed lease agreements, which increases annualised committed leases, (ii) rental income from lease renewals, whereby existing lease agreements are extended, potentially at different rental terms, and (iii) changes in rental income resulting from amendments to existing lease agreements or contractual indexation. While renewed leases generally preserve existing committed rental income rather than creating entirely new rental income, changes in rental levels upon renewal, amendment or indexation may result in an increase or decrease in Annualised committed leases. The financial statement measure most directly comparable with this KPI is the change in Gross Rental Income between the current and previous reporting periods. The two measures differ mainly because (i) signed and renewed rental income is presented on an annualised basis and does not reflect the actual effective date of the relevant lease, renewal, amendment or indexation, which for newly signed leases may fall in a subsequent reporting period, and (ii) rent incentives are not deducted from this KPI but are reflected in Gross Rental Income.
Incremental new lease agreements	In accordance with the signed and renewed rental income APM, it refers only to its component of the new lease agreements signed during the reporting period and increases the annualised committed leases or annualised rent income. The main difference between new lease agreements APM and new activated leases is the start date of the lease. The new lease agreements are signed in the reporting period, the activated leases are the started lease agreements (and could have been signed in previous reporting periods).
Leases to be activated	With this measure the Group captures the lease agreements which will start in the coming twelve months after the reporting date. Since, this measure is forward-looking there is not directly reconcilable line item in the financial statements.
Cash recycling	VGP’s goal is to be a leading pan-European logistics real estate group specialised in the acquisition, development, and management of logistic real estate. The development part of this strategy is very capital intensive. Therefore, VGP entered into stategic partnerships i.e. Joint ventures with well-knonw institutional investors. These joint venture structures allow VGP to partially recover its initial invested capital when completed projects are acquired by the respective joint ventures and allow VGP to re-invest the sales proceeds in the continued expansion of the development pipeline, including the further expansion of the land bank, thus allowing VGP to concentrate on its core development activities. The most directly reconcilable line item in the financial statements for the amount is the "cash flow from disposal of subsidiaries and investment properties" in the cashflow statements and detailed in note 23 of the annual report. The line "Net cash inflow from divestement of subsidiaries and investment properties" represent the cash recycled during the reporting period as a result of the transactions done with mainly the Joint Ventures.
Development pipeline	With the development pipeline the Group refers to the potential the Group holds at the reporting date for future developments. For the development segment, it is measered as the construction potential in sqm on all the acquired and committed land plots. For the renewable energy segment, it is measered as the potential power capacity that can be installed on the roofs of the existing buildings and future developments. There is no directly reconcilable line item in the financial statements though to determine the fair value of the land this development pipeline is included in the assessment of the independent property expert. Furthermore, note 26 in the annual report "Contigencies and commitments" show the commitments to purchase land and to develop new projects.
EBITDA	The result from continuing operating activities before depreciation and amortization. For the Group it includes only the operating result of the joint ventures at share as well. This means that the net valuation gains/(loss) on investment properties realised by the Joint Ventures are excluded in this measure. The calculation from the reconcilable line items in the financial statements to come to the reported EBITDA can be found in note 4 "Segment Reporting" of the financial statements.
Effective current tax rate	The effective current tax expresses the tax burden of the Group on its financial performance. This measure is calculated as current tax divided by profit before tax, yet normalized for unrealized valuation gains and share in the result of Joint Ventures.
EPRA performance measures on the Joint Ventures at share	VGP owns a number of Joint Ventures which are reported under equity method in the IFRS financial statements. These Joint Ventures own mainly completed assets on which VGP Group retains asset management services. In order to increase transparency and comparability of the Joint Ventures some performance measures are calculated in accordance with the Best Practices Recommendations of the European Public Real Estate Association (EPRA). These measures are provided at share, in particular for the First, Second, Third, Fifth and the Sixth Joint Venture. The Development Joint Ventures have been excluded as these only contain development land to date. How these EPRA performance indicators are derived from IFRS measures can be found in note 9.5 "EPRA performance measures on the Joint Ventures at share" of the Annual Report.
ERV of committed land	Estimated rental value (ERV) is the external valuers’ opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained in this case on committed land plots. There is no directly reconcilable line item in the financial statements though it show the potential additional gross rental income on an annual base when these land plots would be acquired and are developed and fully leased.
Rental income potential on vacancy and acquired land (total)/Rental income potential (total)	This measure shows the increase in rental income the group could generate when all acquired land is fully developed and commercialised/leased and there is no vacancy on the existing portfolio. This amount is determined based on the reported Estimated Rental value (ERV) from the indepedent expert report, the development pipeline in m² (see seperate APM) and vacant area of the Group in m². There is no directly reconcilable line item in the financial statements but with this measure the Group tries to quantify the growth potential on the reporting date.
Gearing ratio	This measure shows the debt leverage of the Group. This ratio is calculated as consolidated net financial debt divided by total equity and liabilities or total assets.
Investment property at share	The proportionally Investment property at share, as can be derived from the supplementary notes, reflects VGP’s economic exposure to Investment Property by combining the Group’s directly held Investment Properties with VGP’s share of the Investment Property held through its Joint Ventures. This amount is reported in the financial statements in the note "Supplementary notes not part of the audited financial statements" in particular Balance sheet propertionally consolidated under the line Investment properties total.
Portfolio value, including Joint Venture at share	This measure is similar to Investment property at share APM but includes the investment property classified as held for sale as well. This amount can be derived by taking the sum of (i) the investment property reported in the note "Supplementary notes not part of the audited financial statements" in particular Balance sheet proportionally consolidated under the line Investment properties total and (ii) the Investment property reported in note 21 "Assets classified as held for sale and liabilities associated with those assets".
Portfolio value, including Joint Venture at 100%/Portfolio value (total)	Portfolio value at 100% reflects the full value of the property portfolio held directly by VGP and through its Joint Ventures, irrespective of VGP’s economic ownership percentage in those Joint Ventures. This amount can be derived by taking the sum of (i) the investment property reported in the balance sheet of the Group, (ii) the investment property reported in the balance sheet in respect of the Joint Ventures in note 9.2 and (iii) the Investment property reported in note 21 "Assets classified as held for sale and liabilities associated with those assets".
Proportional Net rental income	Proportional net rental income represents the net rental income generated by the Group’s own portfolio and its share of the net rental income generated by the Joint Ventures. The measure is derived from the proportionally consolidated income statement included in the Supplementary notes not part of the audited financial statements.
Proportional LTV	Loan-to-value (LTV) is calculated by dividing net financial debt by the value of investment property. Proportional loan-to-value is calculated on the same basis but also includes the Group’s proportionate share of net financial debt and investment property held through Joint Ventures and associates. As external debt also includes the EIB loan used to finance property, plant and equipment relating to the Renewable Energy segment, the corresponding assets are included in the denominator of the LTV calculation. The net financial debt of the group can be consulted in note 24.6 "Capital management" of the annual report. This note shows the calculation of the net financial debt as well. The financial line items to calculate the loan-to-value for the joint ventures can be consulted in note 9.2 "Balance sheet in respect of the Joint Ventures" and the share of the Group in the Joint Ventures can be roughly applied at 50%.
Retention Rate	The retention rate is a ratio to assess the stability and continuity of rental income from an existing tenant base. It is defined as the proportion of rental income that has been successfully renewed or extended, by more than 1 year, relative to the total rental income subject to renewal during the period (i.e. the sum of renewed rental income and rental income on terminated contracts during the period).
Average cost of debt	Is the average yearly interest rate at the reporting date, taking into account the outstanding debt.
Average weighted yield	Average weighted yield represents the average yield of the Group’s investment property portfolio and is calculated by dividing (i) the contracted annualised rental income, increased by the Estimated Rental Value (“ERV”) of vacant space as determined by the independent property appraiser, by (ii) the fair value of the respective investment properties as determined by the independent property appraiser.
Yield on cost	Yield on cost represents the expected yield on the total cost of an investment property and is calculated by dividing (i) the contracted annualised rental income, increased by the Estimated Rental Value (“ERV”) of vacant space as determined by the independent property appraiser, by (ii) the total cost of the asset. The total cost includes the acquisition or land cost, construction and development costs, allocated infrastructure costs, capitalised development fees and capitalised interest.