Earnings Release • Nov 14, 2013
Earnings Release
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Brussels 14 November 2013
The encouraging increase in demand for new lettable space observed during the first half of 2013 gained momentum during the third quarter of 2013. VGP recorded a significant increase in demand, not only in Germany where we are now firmly established, but also in most of our other parks i.e. especially in VGP's home market Czech Republic, in Estonia and in Romania.
On the back of these encouraging signs the development activities accelerated during the third quarter and 6 new projects were started up since the end of June 2013 representing 77,224 m² of lettable area.
During the third quarter the main focus of VGP's development pipeline has clearly shifted to Germany where the Group wants to accelerate the acquisition of development land, concentrating on the largest regional cities such as Berlin, Munich, Stuttgart, Düsseldorf and Frankfurt.
The strategy of VGP to focus on strategically located plots of land i.e. land always located in vicinity of urban centres to allow easy access to highways and ring roads and assuring availability of adequate workforce as well as the core competence in integrating operating processes of tenants, is clearly having a positive impact on the development activities of the Group with new buildings being developed or extended. Significant future projects of which several, large E-commerce oriented companies, are under negotiation.
VGP's activities can be summarised as follows:
VGP partially owns another 57 buildings which represent 618,919 m² of lettable area and for which property and facility management services are provided by the VGP Group.
VGP continued to successfully sign new and / or renew existing leases on the back of the pick-up in demand for lettable space.
With its footprint firmly established in Germany, VGP was able to start negotiations with a number of potential tenants, which are not only interested in the existing VGP parks but are also interested in having VGP develop built-to-suit projects under long term lease contracts. A number of negotiations are on-going in this respect.
In other VGP parks located in VGP Park Timisoara (Romania) and VGP Park Tallinn II (Estonia) there were clear signs that the economic conditions are rapidly improving, resulting in significant take-up of new lettable area in the first building in each of these parks i.e. 10,477 m² in VGP Park Timisoara and 21,950 m² in VGP Park Tallinn II. Also in the Czech parks demand for lettable space was on the rise.
The annualised committed leases increased to EUR 7.4 million as at the end of September 2013 (compared to EUR 5.0 million as at 31 December 2012).
In November 2013 an agreement was reached to acquire a fully let new 25,000 m² building located within the VGP Park Hamburg (see below) which will secure additional committed annual rent income of € 1.4 million. This transaction increases the annualised rent income to € 8.8 million.
The committed annualised rent income represents the annualised rent income generated or to be generated by executed lease – and future lease agreements.
During the third quarter 2013, VGP delivered 1 building of 10,477 m² for its own account. This building, which is the first completed building in VGP Park Timisoara (Romania) is fully let.
In October 2013 an additional building of 9,324 m² was delivered in VGP Park Liberec (Czech Republic) on behalf of the associates.
For its own account VGP has the following 11 new buildings under construction: In the Czech Republic, 1 building in VGP Park Usti nad Labem, 1 building in VGP Park Hradek nad Nisou and 2 buildings in VGP Park Brno. In the other countries: 1 building in VGP Park Malacky (Slovakia), 1 building in VGP Park Timisoara (Romania), 1 building in VGP Park Györ (Hungary), 2 buildings in VGP Park Tallinn (Estonia), 1 building in VGP Park Bingen (Germany) and finally 1 new building in VGP Park Hamburg (Germany) which is being started up during the month of November. The new buildings under construction on which several pre-leases have already been signed, represent a total future lettable area of 152,145 m² of which 77,224 m² have been started up after the end of June 2013.
On behalf of its associates VGP is constructing 1 building in VGP Park Nýřany representing a total future lettable area of 8,961 m².
During the third quarter of 2013 VGP continued to prepare the development pipeline for future growth through the acquisition of 45,000 m² of new development land in the Czech Republic
VGP has currently a land bank in full ownership of 1,769,193 m². Besides the current completed projects and projects under construction (251,080 m²) the land bank allows VGP to develop a further 485,000 of lettable area of which 185,000 m² in Germany; 130,000 m² in the Czech Republic and 170,000 m² in the other countries.
Besides this VGP has secured another 324,215 m² of new plots. These plots allow the construction of 148,000 m² of future lettable area, all located in Germany of which 218,000 m² are expected to be bought in December 2013. The remaining plots of land are expected to be bought during the course of 2014 following the receipt of the zoning permits.
In November 2013 VGP reached an agreement to acquire a fully let new 25,000 m² building located within its VGP Park Hamburg. The purchase agreement is due to be signed in the second half of November 2013 with settlement to occur during the month of December 2013 and generates around EUR 1.4 million rent income per annum.
The acquisition of the building provides a rare opportunity for VGP Park Hamburg to fully benefit from economies of scale from a development and commercial point of view.
During the third quarter 2013 VGP was able to secure a new 5 year € 7.5 million committed credit facility with Swedbank for the financing of its development in Estonia. In addition VGP was able to renew the existing € 10.5 million credit facility with UniCredit Bank Hungary used to finance the developments in Hungary, for another year.
At the beginning of November the Group successfully negotiated the renewal of the EUR 1.4 million credit facility of Tatra Banka (expiring at the end of December 2013) until 31 December 2015.
Mr Jan Van Geet Mr Dirk Stoop CEO CFO Tel. + 42 0602 404 790 Tel.+32 2 737 74 06 E-mail: [email protected] E-mail: [email protected]
VGP (www.vgpparks.eu) constructs and develops high-end semi-industrial real estate and ancillary offices for its own account and the account of its associates, 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 of its own real estate portfolio.
VGP is quoted on Euronext Brussels and the Main Market of the Prague Stock Exchange.
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