Share Issue/Capital Change • Sep 17, 2024
Share Issue/Capital Change
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM AN OFFER OF SECURITIES IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION.
Further to the announcement on 16 September 2024, CTP N.V. (the "Company" or "CTP"), has raised €300 million of gross proceeds through an equity issuance of new ordinary shares (the "New Shares") in the share capital of the Company (the "Capital Raise"). This raise constitutes approximately 4% of the Company's existing share capital, at a price of €16.00 per ordinary share. The capital raise will improve CTP's stock liquidity and increase the free float by c. 12.6% 1 .
The Capital Raise was comprised of: (i) the issuance of New Shares for €227 million (the "Placing Shares"), representing approximately 76% of the total New Shares, through an accelerated bookbuilding process to institutional investors (the "Placing"); and (ii) the issuance of New Shares for approximately €73 million (the "Founder Shares"), representing approximately 24% of the total New Shares, that Remon Vos, the founder and controlling shareholder of CTP, who has subscribed through his holding company CTP Holding B.V. in full at the same price as investors in the Placing (the "Founder Tranche"). The Founder Tranche will be settled after the payment of the interim dividend. Following the issuance of the Placing Shares and the Founder Shares, Mr. Vos' stake would reduce from 75.3% to approximately 73.2% of the share capital of the Company.
The Capital Raise will provide CTP with new capital and increased financial flexibility to pursue additional development-led growth opportunities and to take advantage of select attractive investment opportunities, whilst maintaining a strong balance sheet and Investment Grade credit rating, with a Normalized Net Debt to EBITDA below 10x. The company expects the capital raise to be earnings accretive once the capital is fully deployed, which is expected to be within the next 12 months.
Demand for industrial and logistics real estate in CTP's markets continues to be strong, driven by structural demand factors, such as e-commerce, and occupiers seeking to enhance the resilience of their supply chains through nearshoring and friend-shoring. The Central and Eastern European ("CEE") region, in which approximately 87% of the Company's Gross Asset Value ("GAV") is located, is the fastest growing region in Europe, an attractive cost location with labor costs on average only 1/3 of those in Western European markets and is benefitting most from increasing nearshoring trends.
1 Increase in the number of free float shares
CTP's short-term development pipeline was 2.0 million sqm as of 30 June 2024, with an estimated yield on cost of 10.3% and potential rental income of €148 million.
The Company's land bank stands at 25.5 million sqm, which with a build-up ratio of 1 sqm of GLA:2 sqm of land provides CTP the ability to build over 12 million sqm of gross lettable area ("GLA") and nearly double the size of its existing investment portfolio of 12.4 million sqm as of 30 June 2024. Acquisition of additional land would further increase this potential. CTP's land bank is high quality and allows the Company to expand and support the growth of its existing clients and capture new ones. 64% of the land bank is located in CTP's existing parks allowing for growth with existing clients, the quickest delivery and the highest return on investment. Of the remaining land bank, 25% is suitable for development of new larger scale parks of more than 100,000 sqm of GLA.
CTP's industry leading development yield on cost of over 10% allows the Company to realise significant development profits. The costs of land and construction for new developments amount on average to approximately €600 per sqm of GLA. This compares to the current 30 June 2024 valuation of CTP's standing assets at an average of €950 sqm of GLA (significantly less than in Western European markets), offering the potential to realise profits on development on average of approximately €350 per sqm of GLA (at today's values) with potentially more upside if the valuations in CEE markets were to narrow the gap with Western European markets.
The Company continues to roll-out the installation of roof-top solar panels, which allows CTP to meet growing demand from occupiers for green energy as well as driving additional returns.
CTP is well-placed to continue to generate strong growth through delivering new space to meet growing occupier demand and capturing like-for-like rental increases in its existing portfolio, with a reversionary potential of 15% as at 30 June 2024. The Company's target is to reach €1 billion of annualised rental income by 2027 representing an increase of c. 56% over its annualised rental income as at 30 June 2024.
The net proceeds from the Capital Raise will reduce CTP's Loan-to-Value ratio by 2% (from 46.2% to 44.2%) based on the balance sheet as of 30 June 2024.
"We continue to see strong leasing demand, especially in the business-smart CEE region. We leased 918,000 sqm in H1-2024, with the rental levels up 8% year-on-year on a country-adjusted basis. Long-term demand drivers for the industrial and logistics sector remain strong and we expect to see further market rent growth in the coming years. With most of our portfolio located in the business-smart region of CEE, we will benefit from the faster growth in GDP as CEE is the fastest growing region in Europe, as well as from the acceleration of nearshoring, with CEE remaining the best cost location in Europe.
The next growth phase of CTP is already locked-in with our pipeline of 2 million sqm under construction, with most of it expected to be delivered in 2024. Our industry-leading double-digit yield on cost on development, allows us the potential to realize an average development profit (at today's values) of €350 per sqm of GLA now and in the future as we mobilise our 25.5 million sqm land bank, 79% of which we have already bought and paid for as at 30 June 2024. We are confident that we can achieve our ambitious goals and reach over €1 billion of annualised rental income by 2027 and 20 million sqm of GLA before the end of the decade."
CTP is Europe's largest listed owner, developer, and manager of industrial and logistics real estate by GLA, owning 12.4 million sqm of GLA across 10 countries, with a Gross Asset Value of €14.8 billion as of 30 June 2024.
CTP was listed in March 2021, and since then, it has delivered strong growth in a range of metrics including 105% growth in EPRA NTA per share and 84% growth in EPRA EPS per share.
| As of 31 | |||
|---|---|---|---|
| December 2020 | As of 30 June | Change % | |
| (IPO date: 25 | 2024 | ||
| March 2021) | |||
| EPRA NTA per share (€) | 8.32 | 17.05 | +105% |
| LTM Company Specific Adjusted EPRA EPS per share | 0.44 | 0.812 | +84% |
| (€) | |||
| Investment Property (€ billion) | 5.8 | 14.5 | +152% |
| Annualised Rental Income (€ million) | 302 | 679 | +125% |
Over this period, it has doubled the operating portfolio from 5.9 million sqm at 31 December 2020 to 12.4 million sqm at 30 June 2024, established a sizeable presence in Germany, Europe's largest industrial & logistics market, nearly tripled the land bank from 8.8 million to 25.5 million sqm and significantly scaled its rate of development deliveries, whilst its average yield on cost on developments has averaged 10.8% from 2020 to 2023.
The combination of moderate vacancy, continued elevated demand, disciplined new supply and rising replacement costs resulted in elevated rental growth in many markets in 2023 and 2024.
Occupier demand for industrial and logistics real estate has intensified driven by factors including nearshoring, e-commerce and growth of domestic consumption. Overall, in the under supplied CEE markets demand continues to surpass the supply of high quality stock, and we expect the supply-demand dynamics to continue serving as a driver for future rental growth.
In H1-2024, CTP signed a record 0.9 million sqm of new leases, of which two-thirds were with existing clients who are expanding with the Company throughout the CTPark network. CTP realised a like-for-like
2 Mid-point 2024 Company Specific Adjusted EPRA EPS guidance: €0.80 - €0.82
rental growth of 4.8% in H1 2024, while average rents per sqm of the new leases that the Company signed in H1-2024 were 8% above the average rents per sqm of the new leases signed in H1-2023 on a country adjusted basis.
J.P. Morgan SE ("J.P. Morgan") and Morgan Stanley Europe SE ("Morgan Stanley") are acting joint global coordinators and joint bookrunners in the context of the Placing. BNP PARIBAS ("BNPP"), Goldman Sachs Bank Europe SE ("Goldman Sachs") and ING Bank N.V. ("ING" together with J.P. Morgan, Morgan Stanley, BNPP and Goldman Sachs, the "Joint Bookrunners") are acting as joint bookrunners in the context of the Placing. The Joint Bookrunners are not involved in the Founder Tranche.
The Placing Shares are expected to be listed and admitted to trading on Euronext Amsterdam on 19 September 2024. Payment and settlement of the Placing Shares is expected to take place on 19 September 2024. The Founder Tranche will settle within 5 days after payment of the next interim dividend to be declared by the Company, expected to be paid in on 3 October 2024.
In connection with the Capital Raise, the Company has entered into a lock-up for a period from the date hereof up until 180 days from settlement of the Placing Shares. CTP Holding B.V. has entered into a lockup agreement for a period from the date hereof up until of 90 days from settlement of the Placing Shares.
This press release contains inside information as defined in article 7(1) of Regulation (EU) 596/2014 of 16 April 2014 (the Market Abuse Regulation).
This announcement is not for publication or distribution, directly or indirectly, in or into the United States. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy, securities to any person in the United States, Australia, Canada, Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The shares referred to herein may not be offered or sold in the United States unless registered under the US Securities Act of 1933 (the "Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act. The offer and sale of shares referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, Japan. Subject to certain exceptions, the shares referred to herein may not be offered or sold in Australia, Canada, Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of the shares referred to herein in the United States, Australia, Canada, Japan or elsewhere.
This communication is addressed in any member state of the European Economic Area only to those persons who are qualified investors in such member state ("Qualified Investors") within the meaning of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and such other persons as this announcement may be addressed on legal grounds, and no person that is not a Qualified Investor may act or rely on this announcement or any of its contents.
In the United Kingdom, this announcement is directed only at persons who are "qualified investors" ("UK Qualified Investors") (as defined under assimilated Regulation (EU) 2017/1129 as it forms part of the law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation") who also (i) have professional experience in matters relating to investments falling within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are high net worth entities falling within Article 49(2)(a) to (d) of the Order; and/or (iii) are other persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated (all such persons in items (i) to (iii) above together being referred to as "Relevant Persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with relevant persons. Any person in the United Kingdom who is not a Relevant Person should not take any action on the basis of this announcement and should not act or rely on it.
J.P. Morgan and Morgan Stanley are acting exclusively for CTP and no-one else in connection with the transaction. J.P. Morgan and Morgan Stanley will not regard any other person as their client in relation to the transaction and will not be responsible to anyone other than CTP for providing the protections afforded to their respective clients, nor for providing advice in relation to the transaction, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
No prospectus or offering document has been or will be prepared in connection with the transaction. Any investment decision in connection with the transaction must be made on the basis of publicly available information. Such information has not been independently verified. The information contained in this announcement is for background purposes only and does not purport to be full or complete.
J.P. Morgan and Morgan Stanley and their respective affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward looking statement contained in this announcement whether as a result of new information, future developments or otherwise.
In connection with the transaction, J.P. Morgan and Morgan Stanley and any of their affiliates may take up a portion of the shares referred to herein as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of CTP or related investments in connection with the transaction or otherwise. In addition, J.P. Morgan and Morgan Stanley and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which J.P. Morgan and Morgan Stanley and any of their affiliates may from time to time acquire, hold or dispose of shares. Accordingly, references to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, J.P. Morgan and Morgan Stanley and any of their affiliates acting in such capacity. Neither J.P. Morgan nor Morgan Stanley intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.
None of J.P. Morgan and Morgan Stanley or any of theirrespective affiliates or any of their or their affiliates' directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to CTP, their subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forwardlooking statements may and often do differ materially from actual results. Any forward-looking statements reflect CTP's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions. Forward-looking statements speak only as of the date they are made.
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