Investors

Alternative Performance Measures

Alternative Performance Indicators used by VGP in regulated information	Definition
Annualised committed leases or annualised rent income	The annualised committed leases or the committed annualised rent income represents the annualised rent income agreed for all lease agreements signed within the group. This includes both (i) executed leases where hand-over to tenants took place and (ii) future lease agreements, where hand-over to tenant is planned. This measure therefore reflects the full-year potential Gross Rental Income once all signed lease agreements become effective and disregarding any rent incentives granted. The measure is also abbreviated as ‘CARA’. The most directly reconcilable line item in the financial statements is the Gross Rental Income. Nevertheless, this APM will deviate from the Gross Rental Income mainly as a result of: (i) lease agreements which are not handed-over to tenant are included in this APM but not in Gross Rental Income, (ii) any rent incentives granted are not reflected in this APM but are recognised in the Gross Rental Income.
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	This measure represents the potential rental income that can be obtained by the Group when there is no vacancy in the building and construction is finalised. This is determined by multiplying the Estimated Rental Value per m² per year ("ERV" – see also Glossary of Terms in Annual Report), reported by the independent property expert, with the total surface of the vacant area. There is no directly reconcilable line item in the financial statements though to determine the fair value of the investment property this additional rental income once fully built and let is included in the assessment of the independent property expert.
Cash generative leases	A cash generative lease is a lease agreement under which the lease term has commenced, and the premises have been handed over to the tenant, such that contractual lease payments have become due and the asset is generating recurring rental cash flow for the landlord. While lease incentives (such as rentfree periods or stepped rents) may still be running, the lease is legally effective and enforceable, and the tenant has taken possession of the property. Accordingly, the lease contributes to contracted rental income and cash flow generation, subject to the agreed incentive structure. The most directly reconcilable line item in the financial statements is the Gross Rental Income. Nevertheless, this APM will deviate from the Gross Rental Income mainly as a result of: (i) the APM covers the annualised rental income and doesn't take into account when lease agreement started during the year which is considered in the recognition of the Gross Rental Income (ii) any rent incentives granted are not reflected in this APM but are recognised in the Gross Rental Income.
Net Activated Rental Income/New Leases activated	This measure is linked with cash generative leases but is limited to the incremental cash generative leases in the current reporting period. In other words it is the annualised rental income of all lease agreements handed-over to the tenants in the current reporting period. In accordance with the APM Annualised committed leases the most directly reconcilable line item in the financial statements is the difference between the Gross Rental Income of this reporting period and previous reporting period. Nevertheless, this APM will deviate from the figure in the financial statement mainly as a result of: (i) this measure doesn't consider the start date of the lease during the year which is an important parameter for the recognition of the gross rental income, (ii) any rent incentives granted are not reflected in this APM but are recognised in the Gross Rental Income.
Signed and renewed rental income	The signed and renewed rental income KPI captures the uplift and reassured committed annualised rental income in comparison with last year. On the one hand it contains, the new lease agreements which increases the annualised committed leases or annualised rent income. On the other hand, it includes the renewed rental income which means that lease agreements which would terminate are prolonged. This renewed rental income has no incremental value in the annualised committed leases APM. In accordance with the APM Annualised committed leases the most directly reconcilable line item in the financial statements is the difference between the Gross Rental Income of this reporting period and previous reporting period. Nevertheless, this APM will deviate from the figure in the financial statement mainly as a result of: (i) this measure doesn't consider the start date of the lease (for signed lease agreements can be even in the next reporting period(s)) which is an important parameter for the recognition of the Gross Rental Income, (ii) any rent incentives granted are not reflected in this APM but are recognised in the 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-known 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 measured as the construction potential in sqm on all the acquired and committed land plots. For the renewable energy segment, it is measured 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 "Contingencies 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 shows 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	This measure refers to the total value of the investment property of the Group and its share in the investment property of the 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)	This measure is similar to portfolio value at share but considers the full portfolio value of the 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	Is the net rental income generated by the Group and its Joint Ventures at share. This amount is reported in the financial statements in the note "Supplementary notes not part of the audited financial statements" in particular Income statement, proportionally consolidated under the line Net Rental income but deducting the net renewables income reported in the same table.
Proportional LTV	The loan-to-value is determined by dividing the net financial debt by Investment property. Proportional loan-to-value is calculated including the Group’s proportionate share of the net financial debt and investment property held within Joint Ventures and associates. 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).