Annualised committed rent income
The increase in demand of lettable area resulted in the signing of new lease contracts in excess of
€ 10.4 million in total of which € 8.7 million related to new or replacement leases[2] (€ 2.8 million on behalf of VGP European Logistics) and € 1.7 million (€ 1.5 million on behalf of VGP European Logistics) were related to renewals of existing lease contracts. During the first four months of the year lease contracts for a total amount of € 1.5 million (all related to VGP European Logistics) were terminated.
The annualised committed leases therefore increased to € 90.9 million[3], as at the end of April 2018 (compared to € 82.2 million as at 31 December 2017).
Germany was the main driver of the growth in committed leases with € 2.6 million of new leases signed during the year (€ 1.1 million on behalf of VGP European Logistics).
The other countries also performed very well with new leases being signed in the Czech Republic
+ € 2.5 million (€ 1.6 million on behalf of VGP European Logistics), in Spain + € 1.1 million (own portfolio), in Latvia + € 1.9 million (own portfolio), in Romania + € 0.1 million (own portfolio) and finally in Hungary + € 0.1 million (JV portfolio).
The signed committed lease agreements of the own portfolio (post fourth Joint Venture closing at the end of April 2018) represent a total of 480,363 m² of lettable area with the weighted average term of the annualised committed leases standing at 13.8 years[4].
The signed committed lease agreements of the Joint Venture portfolio (post fourth Joint Venture closing at the end of April 2018) represent a total of 1,306,903 m² of lettable area with the weighted average term of the annualised committed leases standing at 8.1 years[5].
The weighted average term of the annualised leases of the combined own and Joint Venture portfolio (post fourth Joint Venture closing at the end of April 2018) stood at 9.5 years[6] compared to 9.7 years at the end of December 2017.
Evolution of the property portfolio
The development activities during 2018 can be summarised as follows:
Completed projects
During the first four months of 2018, 7 buildings were completed totalling 227,407 m² of lettable area.
For its own account VGP delivered 5 buildings i.e. In the Czech Republic: 2 buildings in VGP Park Usti nad Labem totalling 12,502 m². In Germany: 1 building of 12,803 m² in VGP Park Wustermark and 1 building of 19,264 in VGP Park Wetzlar and finally, in Spain 1 building of 22,746 m² in VGP Park San Fernando de Henares.
Of these buildings the Joint Venture acquired at the end of April 2018: In the Czech Republic the buildings of VGP Park Usti nad Labem and in Germany: the building in VGP Park Wetzlar.
For the Joint Venture VGP completed 2 buildings i.e. In the Czech Republic: 1 building of 13,071 in VGP Park Cesky Ujezd and in Germany 1 building of 147,022 in VGP Park Frankenthal. These buildings were also part of the fourth Joint Venture closing at the end of April 2018.
Projects under construction
At the end of April 2018 (post Joint Venture closing) VGP has the following 26 buildings under construction:
For its own account VGP has 14 new buildings under construction i.e. in the Czech Republic: 2 buildings in VGP Park Chomotov. In Latvia 2 buildings in VGP Park Kekava. In Romania; 2 buildings in VGP Park Timisoara. In Germany 1 building in VGP Park Göttingen, 1 building in VGP Park Halle, 2 buildings in VGP Park Wustermark and finally 1 building in VGP Park Dresden. In Spain; 2 buildings in VGP Park San Fernando de Henares and 1 building in VGP Park Mango. The new buildings under construction represent a total future lettable area of 352,876 m² which corresponds to an estimated annualised rent income of € 16.5 million.
On behalf of the Joint Venture VGP is constructing 12 new buildings: In the Czech Republic: 2 buildings in VGP Park Hradek nad Nisou, 1 building in VGP Park Olomouc and 2 buildings in VGP Park Jenec. In Germany: 1 building in VGP Park Hamburg, 2 buildings in VGP Park Leipzig, 1 building in VGP Park Wetzlar and 2 buildings in VGP Park Berlin. In the other countries: 1 building in VGP Park Malacky (Slovakia). The new buildings under construction represent a total future lettable area of 152,274 m² which corresponds to an estimated annualised rent income of € 7.6 million.
Land bank
During the first four months of the year, VGP continued to target land plots to support the development pipeline for future growth. VGP acquired 433,389 m² of new development land of which 333,311 m² was located in Romania with the remaining 100,078 m² being located in Germany. These new land plots have a development potential of 200,000 m² of future lettable area.
Besides this VGP has another 1,275,760 m² of new land plots under option which are located in Germany, the Czech Republic and Slovakia. These land plots have a development potential of approximately 570,000 m² of new lettable areas and the bulk of the land plots are expected to be purchased during 2018, subject to obtaining the necessary permits.
VGP has currently a remaining secured development land bank of 2,983,860 m² of which 57% or 1,708,100 m² is in full ownership. The secured land bank allows VGP to develop, in addition to, the current completed projects and projects under construction an additional 1,368,000 m² of lettable area of which 418,000 m² in Germany, 426,000 m² in the Czech Republic, 155,000 m² in Spain, 205,000 m² in Slovakia and 164,000 m² in Romania.
The Joint Venture has currently a remaining development land bank in full ownership of 149,219 m² on which a total of 59,000 m² of new lettable area can be developed.
Geographic expansion
During the first months of 2018 we have established our operational presence in Italy and the Benelux. In Italy we have seen a number of interesting opportunities and we are currently close to securing 2 plots of land. In the Benelux we are close to securing one plot of land.
Expansion of the VGP team
During 2018 we expanded the VGP team with a number of highly experienced and high-profile individuals. Mr Matthias Sander joined as new Chief Investment Officer. Matthias spent the last 11 years in several leading roles with Knorr Bremse and was its Managing Director in the Czech Republic. His industrial and automotive experience will be a valuable asset to identify and originate new business opportunities across our different markets. He will also help to further streamline VGP`s internal processes with the establishment of measurable key performance indicators to support a focussed growth of the VGP Group. In line with building out a more professional organisation and focus on sustainable cost and profit deliverables a new Group Controller was also hired and will join VGP during the summer months.
We also attracted a new VP Business Development and Investor Relations who will join VGP during the second half of 2018 and who comes from a large blue chip investment bank. Further details will be disclosed closer to the effective start date of this person.
For more information
Profile
VGP (www.vgpparks.eu) constructs and develops high-end logistic real estate and ancillary offices for its own account and for the account of its VGP European Logistics joint venture (50:50 joint venture between Allianz Real Estate and VGP), which are subsequently rented out to reputable clients on long term lease contracts. VGP has an in-house team which manages all activities of the fully integrated business model: from identification and acquisition of land, to the conceptualisation and design of the project, the supervision of the construction works, contracts with potential tenants and the facility management.
VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.
[1] 1n this statement, lettable area and lease contracts in respect of VGP European Logistics are stated at 100 per cent. Financial figures are stated for the three months to, or at, 31 March unless otherwise indicated.
[2] Including € 0.4 million of other rental income from rent reviews and indexation.
[3] Including VGP European Logistics Joint Venture. Post fourth Joint Venture closing annualised committed leases for VGP European Logistics stood at € 67.5 million (31 December 2017: € 52.5 million).
[4] The weighted average term of the committed leases up to the first break stands at 9.9 years as at the end of April 2018 (post fourth JV closing).
[5] The weighted average term of the committed leases up to the first break stands at 7.5 years as at the end of April 2018 (post fourth JV closing).
[6] The weighted average term of the committed leases up to the first break stands at 8.1 years as at the end of April 2018 (post fourth JV closing).
VGP_Press Release_EN_11.05.18
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Source: VGP NV via GlobeNewswire
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