VGP NV: Strong Demand for Premium European Logistic Assets Drives Annual Results
28 Febbraio 2020 - 7:00AM
VGP NV: Strong Demand for Premium European Logistic Assets Drives
Annual Results
28 February 2020, 7:00am, Antwerp
(Berchem), Belgium: VGP NV (‘VGP’ or ‘the Group’), a
leading European provider of high-quality logistics and
semi-industrial real estate, today announces the results for
financial year ended 31 December 2019:
- Record net profit of €205.6 million, a 69.8% YoY increase
- Solid business growth across European portfolio
- Record signed and renewed rental income of €54.9 million,
bringing total signed rental income to € 155.0 million, a 48.9% YoY
increase
- 34 buildings with 706,000 m² under construction at
year-end
- Owned and secured land bank of 6.21 million m² - a 39.6% YoY
increase
- Delivered 19 projects with 287,000 m² of lettable area,
representing €15.8 million of annualised committed leases
- Start of construction of landmark VGP Park Munich project with
several other iconic projects in the pipeline, including Laatzen
and Magdeburg
- Launched second joint venture with Allianz Real Estate and
completed three successful joint venture transactions for a total
transaction value of €610 million
- Successfully completed a € 150 million bond offering and
arranged several multi-year bilateral credit facilities
- Intention to propose to the Annual Meeting of Shareholders a
distribution of a gross dividend of € 60 million which equates to €
3.25 per share – a 47.7% YoY increase
VGP’s Chief Executive Officer, Jan Van
Geet, said: “We had a busy year as usual in which our
committed rental income grew by nearly 50%, profoundly changing the
scale of our operations as we increasingly reap the benefits of the
investments made over the last few years in our growing
pan-European platform. Particularly we saw very strong growth in
Germany – where we are already active since 2013 but mostly under
the radar. However, over the last few months our profile in
the German market changed significantly as we launched iconic
projects in Munich, Laatzen and Göttingen bearing the fruit of
intense cooperation with communities and SME clients over the past
few years.”
Jan Van Geet continued: “During the year we made
significant investments into our organizational structure as we
further aligned our country teams with our pan-European matrix
organization and split the COO role – with Jon Watkins joining us
from Amazon as COO Western Europe. We reinforced our
financial position through a second joint venture with Allianz, a
successful €150 million bond offering and new credit facilities.
We believe it will be critical to maintain a fortress capital
position so we can continue to benefit from investment
opportunities as we see land becoming increasingly scarce.
Jan Van Geet added: “We are very confident for
the outlook for 2020 as we will construct various pre-let trophy
projects already in the pipeline which will support the results
this year. Furthermore, we will continue the implementation
of our pan-European roll-out and, supported by the foundation of
our expanded land bank, we have the ambition to add a lot of new
and iconic parks and tenants across the markets we are active
in.”
FINANCIAL AND OPERATING HIGHLIGHTS
Record new signed lease agreements
- Record signed and renewed rental income of € 54.9 million
driven by 727,000 m² of new lease agreements signed (corresponding
to € 53.3 million of new annualised rental income), combined with
31,000 m² of lease agreements renewed (corresponding to € 1.6
million of annualised rental income)
- The signed and renewed rental income is generated mostly in
Germany € 39.5 million or 74% of which € 20.8 million is
contributed by pre-let agreements signed to date for VGP Park
Munich
- The total signed lease agreements represent € 155.0 million1
annualised committed rental income (equivalent to 2.66 million m²
of lettable area), a 48.9% increase since December
2018
Record level of construction
activity
- A total of 19 projects delivered representing 287,000 m² of
lettable area, representing €15.8 million of annualised committed
rental income
- A record 34 projects under construction representing 706,000 m²
of future lettable area representing €45.8 million of annualised
committed rental income once built and fully let
- In addition, in our pipeline we have 11 pre-let projects to be
started up in the coming months, representing 331,000m2 of future
lettable area representing €30.4 million of pre-let lease
agreements
Record land bank expansion
- Acquisition of 2.88 million m² of development land and a
further 1.80 million m2 committed subject to permits which brings
the total land bank (owned and committed) to 6.21 million m² (a
39.6% net increase since December 2018), which supports 2.78
million m² of future lettable area
- A further 1.02 million m² of new land plots identified which
are under negotiation which have a development potential of 0.51
million m² of future lettable area. Since the start of 2020
this pipeline has increased by another 1.64 million m2 of
development land representing another 0.94 million m2 of
development potential
Significant strengthening of the team
- The team expanded to 220 FTE equivalent as we hired 40
additional people across the organization
- The COO role was split – with Jon Watkins, previously Amazon’s
Head of EME Real Estate, joining as of December 2019 as COO Western
Europe, and Matthias Sander as COO Eastern Europe – to align with
the enlarged organization and create a platform for continued
successful land acquisition as a driver for future growth
Reinforced our financial and capital
position
- Expanded the strategic partnership with Allianz with a new
50:50 joint venture “VGP European Logistics 2” – an investment
vehicle targeting core logistics assets in Austria, Italy, the
Netherlands, Portugal, Romania and Spain. We are targeting to
grow the joint venture to a gross asset value of €1.7 billion
within five years by exclusively acquiring prime assets developed
by VGP
- We conducted three successful closings with the Joint Ventures
for a total gross asset value of €610 million. The first
joint venture conducted two closings, one in April 2019 for €203
million and one in November 2019 for €232 million. The second
joint venture successfully closed a first transaction of €175
million in July 2019
- A €150 million bond offering was completed in November 2019
and, in addition, through several bilateral agreements we secured
multi-year credit facilities for a total of €183.5 million
- These combined proceeds and facilities will allow VGP to
reinvest in its development pipeline and continue to grow the
business. Gearing2 at the end of 2019 stood at 37.2%, in line
with the company’s target maximum consolidated gearing of 65%
Corporate Responsibility as key strategic
principle
- During 2019 a number of initiatives were introduced including a
new minimum building standard as we seek BREAAM Very Good
certification (or equivalent) for new constructions as of 2020
onwards. In addition, we plan a broader roll-out of sustainable
energy production in our parks through photovoltaic and other
renewable sources in order to support our tenants with their goal
of neutralizing their carbon footprint
- The VGP Foundation was founded in 2019 as a registered Belgian
private foundation. VGP has committed to contribute circa 1-2% of
its annual profit into the VGP Foundation and this year we will
propose to contribute a starting capital of € 3 million.
The foundation will focus on three main areas: firstly,
supporting education for children and young people in need,
secondly, the preservation and creation of biospheres and nature
conservation zones and, thirdly, the protection of European
cultural assets and heritage
- For 2020 we have set ourselves enhanced sustainability targets
as we believe the private sector – and especially the logistics
sector – plays an important role in creating solutions that help
grow the economy and addressing challenges such as climate change.
We will therefore regularly publish our strategy, goals and
initiatives in a comprehensive Corporate Responsibility report. The
first edition is scheduled for publication in the coming weeks
Outlook 2020
- It is with confidence that we look at 2020 and beyond, as we
continue to leverage on the implementation and expansion of our
pan-European roll-out. The positive trend in demands for
lettable area recorded by VGP during 2019 in combination with the
significant increase of our land bank during the last 12 months has
laid the foundation for growth over the coming years. VGP
expects to be able to continue expanding its rental income and
property portfolio through the completion and start-up of
additional new buildings in 2020. Development activities should
continue to operate at elevated levels during 2020 supported by
solid demand from potential tenants. We expect e-commerce to
continue to be an important driver for demand across our
platform.
- Finally, in respect of partnership with Allianz Real Estate, we
expect in the course of 2020 to be able to announce the details of
an expansion of our first joint venture beyond the €1.7 billion
original target and we anticipate to be able to conduct several
closings with the Joint Ventures in the course of this year.
KEY FINANCIAL METRICS
Operations and results |
2019 |
2018 |
Change (%) |
Committed annualised rental income (€mm) |
155.0 |
104.1 |
48.9% |
IFRS Operating Profit before tax (€mm) |
252.4 |
151.1 |
67.0% |
IFRS net profit (€mm) |
205.6 |
121.1 |
69.8% |
IFRS earnings per share (€ per share) |
11.06 |
6.52 |
69.8% |
Dividend per share (€ per share) |
3.25 |
2.20 |
47.7% |
Portfolio and balance sheet |
2019 |
2018 |
Change (%) |
Portfolio value, including Joint Ventures at 100% (€mm) |
2,771 |
1,936 |
43.1% |
Portfolio value, including Joint Ventures at share (€mm) |
1,897 |
1,355 |
40.0% |
Occupancy ratio of standing portfolio (%) |
99.8 |
99.3 |
- |
EPRA NAV per share (€ per share) |
39.89 |
30.94 |
28.9% |
IFRS NAV per share (€ per share) |
37.66 |
29.25 |
28.8% |
Net financial debt (€mm) |
604.2 |
419.3 |
44.1% |
Gearing2 (%) |
37.2 |
34.6 |
- |
CONFERENCE CALL FOR INVESTORS AND ANALYSTS
VGP will host a conference call at 10:30 (CET) on 28
February 2020The conference call will be available on:
- Belgium: 0800 58228 (toll free) / +32 (0)2 404 0659
- UK: 0800 358 6377 (toll free) / +44 (0)330 336 9105
- US: 800-263-0877 (toll free) / +1 646-828-8143
- Confirmation Code: 8533079
A presentation is available under “Reports and Presentations” on
VGP website:
https://www.vgpparks.eu/en/investors/
FINANCIAL CALENDAR
Annual Report
2019 |
7 April 2020 |
First quarter
2020 trading update |
8 May 2020 |
General meeting
of shareholders |
8 May 2020 |
Dividend
ex-date |
15 May 2020 |
Dividend payment
date |
19 May 2020 |
Half year results
2020 |
24 August 2020 |
Third quarter
2019 trading update |
20 November 2020 |
CONTACT DETAILS FOR INVESTORS AND MEDIA
ENQUIRIES
Martijn Vlutters (VP – Business Development & Investor
Relations) |
Tel: +32 (0)3 289 1433 |
Petra Vanclova (External Communications) |
Tel: +42 0 602 262 107 |
Anette NachbarBrunswick Group |
Tel: +49 152 288 10363 |
ABOUT VGP
VGP is a leading pan-European developer, manager
and owner of high-quality logistics and semi-industrial real
estate. VGP operates a fully integrated business model with
capabilities and longstanding expertise across the value chain. The
company has an development land bank (owned or committed) of 6.2
million m² and the strategic focus is on the development of
business parks. Founded in 1998 as a family-owned real estate
developer in the Czech Republic, VGP with a staff of circa 220
employees today owns and operates assets in 12 European countries
directly and through VGP European Logistics and VGP European
Logistics 2, both joint ventures with Allianz Real Estate. As of
December 2019, the Gross Asset Value of VGP, including the joint
ventures at 100%, amounted to €2.77 billion and the company had a
Net Asset Value (EPRA NAV) of €741 million. VGP is listed on
Euronext Brussels and on the Prague Stock Exchange (ISIN:
BE0003878957).
For more information, please
visit: http://www.vgpparks.eu
Forward-looking statements:
This press release may contain forward-looking statements.
Such statements reflect the current views of management regarding
future events, and involve known and unknown risks, uncertainties
and other factors that may cause actual results to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. VGP is
providing the information in this press release as of this date and
does not undertake any obligation to update any forward-looking
statements contained in this press release considering new
information, future events or otherwise. The information in this
announcement does not constitute an offer to sell or an invitation
to buy securities in VGP or an invitation or inducement to engage
in any other investment activities. VGP disclaims any
liability for statements made or published by third parties and
does not undertake any obligation to correct inaccurate data,
information, conclusions or opinions published by third parties in
relation to this or any other press release issued by VGP.
1 For Joint Ventures at 100%
2 Calculated as Net debt / Total equity and
liabilities
- VGP_Press_Release_FY2019 - EN
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