In This Article:
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Earnings Per Share (EPS): On track to reach EUR1.47 by year-end, representing a 5% growth.
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Balance Sheet Value: Increased by EUR600 million, reaching EUR4.7 billion.
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Occupancy Rate: High and stable at 98%.
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New Investments: EUR600 million in new investments this year, with EUR100 million in Q3.
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Average Yield on Investments: 7%.
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Lease Indexation: Around 3% indexation on all leases.
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Rent Reversions: Positive rent reversions for 15% of 300,000 square meters.
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Market Rent Position: 12% below market rent, indicating potential for further value creation.
Release Date: October 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Warehouses De Pauw SA (WDPSF) reported a 5% growth in earnings per share, aligning with their target of EUR1.47 by year-end.
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The company added EUR600 million in value to its balance sheet, reaching a total of EUR4.7 billion, indicating strong financial growth.
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WDPSF maintains a high and stable occupancy rate of 98%, showcasing the quality and demand for their portfolio.
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The company successfully executed EUR600 million in new investments, with a blend of equity and debt deals in Belgium and France.
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WDPSF's balance sheet remains strong and liquid, providing significant investment potential and supporting future growth initiatives.
Negative Points
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There is a noted slowdown in tenant demand, impacting tenant retention and development pipeline expectations.
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The company anticipates a drop in client retention from 90% to 80% for 2025, indicating potential challenges in maintaining occupancy.
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Economic uncertainty is causing delays in new developments, as clients adopt a wait-and-see approach before committing to large investments.
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The market is experiencing a cyclical downturn, with stocks bottoming out and clients reducing surplus inventory.
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Speculation about potential acquisitions, such as the rumored [or shop] portfolio, raises concerns about the impact on yield expectations.
Q & A Highlights
Q: Can you provide details on the slowdown in tenant demand and its impact on tenant retention and development pipeline? A: Joost Uwents, Co-CEO, explained that the warehouse sector is late cyclical, and as the economic cycle ends, tenant demand decreases due to surplus stock. The internal utilization rate has dropped from 120% to 80-75%, but long-term contracts and high occupancy rates protect against significant impacts. The expectation for 2025 is a drop in client retention from 90% to 80%, but this is manageable with opportunities for rent increases.