AI Terminal
VGP NV
Earnings Release • Aug 26, 2022
4022_ir_2022-08-26_ef961b64-9049-4d53-b320-e4b4fab34968.pdf
Earnings Release
Open in ViewerOpens in native device viewer
VGP'S HALF YEAR RESULTS 2022
26 August 2022, 7:00am, Antwerp, Belgium: VGP NV ('VGP' or 'the Group'), a European provider of high-quality logistics and semi-industrial real estate, today announces the results for half-year ended 30 June 2022:
- Strong operating performance resulting in a net profit of € 153.1 million
- € 35.4 million worth of signed and renewed lease agreements during H1'22, bringing total annualised rental income to € 281.1 million (+9.7% YTD)1
- As at 30 June 2022, a total of 1,346,000 m2 under construction through 40 projects representing € 88.1 million in additional annual rent once fully built and let (87.4% pre-let)
- o 206,000 m2 of projects started up in H1'22 pre-let at 81.7%, representing € 11.1 million of rental income once fully built and let
- o Delivered 17 projects representing 334,000 m2 during H1'22, 99.3% let and representing € 17.1 million of rental income
- Strong liquidity position of €730 million2 expected to be further positively impacted through seed portfolio closing of Fourth JV and completion of works in VGP Park Munich in H2'22
- o Cash balance supported by third closing with Second JV with net proceeds of € 215 million in Q1'22 and includes gross proceeds of € 82 million of two additional JV transactions as per July 1st '22
- o Expected minimum gross proceeds of € 73 million for completion of works in VGP Park Munich expected in Q4'22
- o Fourth Joint Venture seed portfolio closing planned for Q4'22
- o Revolving credit facility increased by 50% to € 300 million (all remaining undrawn)
- Gearing ratio of 35.2% (33.5% on a pro forma basis²)
VGP's Chief Executive Officer, Jan Van Geet, said: "In the first half year we have seen robust growth with € 35 million of new or renewed lease agreements signed and supported by significant rental growth in most countries. This growth was realised despite a more prudent approach by e-commerce sector of which a number of major players have shifted their take-up focus towards 2024 and beyond."
Jan Van Geet continued: "The unstable energy markets have not only given a significant boost to our renewable energy revenue potential, it has also served as an accelerator in our tenants' desire to switch to renewable energy consumption. Beyond the traditional stronghold countries of Germany and the Netherlands we are now initiating solar projects in almost all regions based on direct tenant demand."
Jan Van Geet added: "Although we have taken a more cautious approach to our land acquisitions during the first half of the year, an important side effect of these unstable energy markets is that it creates tremendous growth opportunities for us. After all, it accelerates the need for energy-inefficient industries to reinvent themselves and move to more sustainable and energy-efficient housing and operations. One of the side effects of this is that they are putting their old factories, mostly in prime locations, up for sale which consequently offers interesting brownfield redevelopment opportunities for VGP."
Jan Van Geet concluded: "A strong capital position is important, particularly as such highly attractive brownfield opportunities start to increasingly arise. The significant cash recycling through the completed and anticipated joint venture closings enhances our balance sheet and allows us the flexibility to best serve our customers whilst enabling us to create significant value for all stakeholders involved."
1 Compared to 31 December 2021 and inclusive of Joint Ventures at 100%.
2 Includes €82 million cash received on 1-Jul-22 as part of two JV closings. Cash balance as at 30 Jun-22 amounts to €648 million
FINANCIAL AND OPERATING HIGHLIGHTS
New leases signed
As at 30 June 2022, the signed and renewed rental income amounted to € 35.4 million (up 9.7% YTD).
Leasing activity year-to-date has been strong across the board with increased demand from a broad range of tenants. From a geographical perspective, Germany contributed circa a third of new leases and particular strong activity was noted in Spain, The Netherlands and Slovakia.
The increase was driven by 416,000 m² of new lease agreements signed, corresponding to € 22.4 million of new annualised rental income1 , whilst during same period for a total of 173,500 m² of lease agreements were renewed and extended corresponding to € 9.3 million of annualised rental income (of which € 8.2 million related to the joint ventures2 ). Indexation accounted for € 3.6 million in the first half of 2022 (of which € 3.2 million related to the joint ventures²). Terminations represented a total of €1.0 million or 19,000 m², of which € 0.8 million within the joint ventures' portfolio.
The signed annualised committed leases total € 281.1 million3 (equivalent to 4.9 million m² of lettable area), a 9.7% increase since December 2021.
The leasing activity after 30 June 2022 has resulted in an additional € 6.1 million of new contracts being signed bringing the total annualised committed rental income to € 287.8 million (+12.4% YTD).
Construction activity
A total of 40 projects under construction which will create 1,346,000 m² of future lettable area, representing € 88.1 million of annualised leases once built and fully let – the portfolio under construction is 87.4% pre-let as at 30 June 2022.
During the first 6 months of 2022 a total of 17 projects were completed delivering 334,000 m² of lettable area, representing € 17.1 million of annualised committed leases. Several other projects currently under construction are scheduled for delivery in the coming months resulting in a delivery pipeline of >700,000m2 expected for H2 2022.
During H1 we experienced additional increases of construction costs. First signs of stabilization have been noted towards the end of H1. The resulting effects on the development margins of the projects under construction were mitigated through a mix of higher rental income and yield changes.
Land bank
Acquisition of 1,55 million m² of development land and a further 3.25 million m2 committed subject to permits which brings the remaining total owned and committed land bank for development to 11.31 million m², which supports more than 5.12 million m² of future lettable area.
A further 601,000 m² of new land plots have been identified and are under negotiation and have a development potential of at least 254,000 m² of future lettable area. This brings the land bank of owned, committed, secured and/or under option to 11.91 million m2.
1 Of which 250,000 m² (€ 14.1 million) related to the own portfolio
2 Joint ventures refer to VGP European Logistics, VGP European Logistics 2 and VGP Park München, All three 50:50 joint ventures with Allianz Real Estate
3 Including Joint Ventures at 100%
The land bank includes an agreement to purchase 32 hectares of land in Petit-Couronne, near Rouen, the capital of Normandy (of which 50% was already acquired during the 1H 2022), the first project of VGP in France. This brownfield project is expected to offer circa 150,000 m² of total gross lettable area, with construction works due to begin in 2023.
Renewable Energy
A total solar power generation capacity of 120.9 MWp is currently installed or under construction through 89 roof-projects in 4 countries. As at 30 June 2022 this represents a total aggregate investment amount of € 48 million.
In addition, 40 solar power projects have been identified in four additional countries which equates to an additional power generation capacity of 53.7 MWp. For these projects we expect the installation works to commence in the coming months. The current total solar portfolio, including pipeline projects totals 174 MWp.
Completion of the 3 rd closing with the Second Joint Venture with Allianz Real Estate
On 16th of March 2022, VGP announced the successful third closing with its 50:50 joint venture, VGP European Logistics 2 ('Second Joint Venture'). The transaction comprised 13 logistic buildings, including 9 buildings in 7 new VGP parks and another 4 newly completed logistic buildings which were developed in parks previously transferred to the Joint Second Venture. The transaction value was € 364 million1 and net proceeds from this transaction amounted to circa € 215.5 million. Following the completion of this third closing, the Second's Joint Venture's property portfolio consist of 32 completed buildings representing around 642,000 m² of lettable area, with an 99.8% occupancy rate.
On 1 July 2022, two additional closings, one of each with the First and Second Joint Venture occurred for a total gross asset value of € 105 million and with gross cash proceeds for VGP in amount of € 82 million.
A final closing with the Third Joint Venture is anticipated during Q4 2022 upon completion of the Munich construction site, which is within its original time frame. The expected minimum gross proceeds of the transaction totals € 73 million.
Finally, during Q4 '22 VGP expects to sell a seed portfolio of completed projects to the Fourth Joint Venture.
Capital and liquidity position
On the 10th of January 2022, VGP announced the successful issuance of its second public benchmark green bond for an aggregate nominal amount of € 1.0 billion, in two tranches i.e., a € 500 million 5 year bond tranche paying a coupon of 1.625% p.a. and maturing on 17 January 2027 and a € 500 million 8-year bond tranche paying a coupon of 2.250% p.a. and maturing on 17 January 2030. The proceeds from this issuance are being used to fund the majority pre-let development pipeline, the build out of renewable energy assets and the design and development of new green logistics and semi-industrial parks.
Total cash balance as at 30 June 2022 stood at € 648.5 million and increased further on 1 July 2022 with € 82 million following the closings with the First and Second Joint Venture.
1 The transaction value is composed of the purchase price for the completed income generating buildings and the net book value of the development pipeline which is transferred as part of a closing but not yet paid for by the First Joint Venture.
In August 2022, VGP further strengthened its liquidity position by increasing its committed credit facilities with an additional € 100 million granted under similar terms as the existing credit facilities. As a result, the current committed credit facilities amount to € 300 million, all of which currently remain undrawn.
Progress towards our Sustainable Development Goals
We have made significant progress towards our Sustainable Development Goals and are on track to achieve carbon neutrality by 2025 and 50% gross reduction under scope 1 and 2 and 55% reduction in 'in use' scope 3 emissions by 2030.
With regards to the sustainable building target, the Group targets BREEAM Excellent or DGNB Gold for all new constructions started up in 2022. Currently 61.2% of our portfolio has been certified.
In order to allow transparent reporting on the progress on our ESG initiatives we will, in addition to our annual CDP disclosure, 2022 GRESB (Global Real Estate Sustainability Benchmark) participation and publication of our Corporate Responsibility Reporting in accordance with GRI Standards, participate in the S&P Global CSA 2022 and Sustainalytics 2022 analysis.
Outlook
As a result of the strong rental and asset growth and +1 million m2 to be delivered in 2022, VGP's (along with the JV's) recurring rental income basis will increase to € 280 million within the next twelve months. This significantly increases the recurring cash generation and delivers an attractive return on the funds invested.
VGP has currently been able to mostly mitigate the increased construction costs through a mix of higher rental income and yield compression. Any adverse change in any of the aforementioned components might not be fully offset and hence might have adverse effect on the development margins. We remain prudent and selective on any start-up of new projects to ensure that our development margins remain attractive.
The Group opened its first office in Scandinavia with appointment of Kristoffer Kaae Stimpel as country manager for Denmark. The Group anticipates to be able to announce the opening of first office in Sweden in 2H 2022.
Based on the combination of our increasing recurring cash flow, our inflation protected portfolio, our strategic land bank and partnership with Allianz Real Estate, in combination with attractive land acquisition opportunities in the markets along with renewable energy dynamics is expected to result in further – solid - NAV growth for VGP.
Finally, the expected sale of the seed portfolio to the Fourth Joint Venture during Q4 '22 should further strengthen the Group's balance sheet.
KEY FINANCIAL METRICS
| H1 2022 | H1 2021 | Change (%) | |
|---|---|---|---|
| Operations and results | |||
| Committed annualised rental income (€mm) | 281.1 | 205.7 | 36.7% |
| IFRS Operating profit (€mm) | 190.5 | 240.0 | (20.6)% |
| IFRS net profit (€mm) | 153.1 | 203.8 | (24.9)% |
| IFRS earnings per share (€ per share) | 7.01 | 9.90 | (29.2)% |
| Portfolio and balance sheet | 30 Jun 22 | 31 Dec 21 | Change (%) |
| Portfolio value, including joint venture at 100% (€mm) | 6,534 | 5,746 | 13.7% |
| Portfolio value, including joint venture at share (€mm) | 4,656 | 4,084 | 14.0% |
| Occupancy ratio of standing portfolio (%) | 99 | 99 | - |
| EPRA NTA per share (€ per share) | 106.97 | 106.93 | 0.0% |
| IFRS NAV per share (€ per share) | 99.81 | 99.65 | 0.2% |
| Net financial debt (€mm) | 1,713 | 1,159 | 47.8% |
| Gearing1 (%) |
35.2 | 29.8 | - |
AUDIO WEBCAST FOR INVESTORS AND ANALYSTS
VGP will host an audio webcast at 11:00 (CEST) on 26 August 2022
Webcast link:
https://event.webcasts.com/starthere.jsp?ei=1563403&tp\_key=c71da089b6
Click on the link above to attend the presentation from your laptop, tablet or mobile device. Audio will stream through your selected device
Please join the event audio webcast 5-10 minutes prior to the start time
A presentation will be available on VGP website: https://www.vgpparks.eu/en/investors/publications/
CONTACT DETAILS FOR INVESTORS AND MEDIA ENQUIRIES
| Investor Relations | Tel: +32 (0)3 289 1433 |
|---|---|
| [email protected] | |
| Karen Huybrechts (Head of Marketing) | Tel: +32 (0)3 289 1432 |
1 Calculated as Net debt / Total equity and liabilities
ABOUT VGP
VGP is a 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 a development land bank (owned or committed) of 11.31 million m² and the strategic focus is on the development of business parks. Founded in 1998 as a Belgian family-owned real estate developer in the Czech Republic, VGP with a staff of circa 380 FTEs today and operates in 19 European countries directly and through several 50:50 joint ventures. As of June 2022, the Gross Asset Value of VGP, including the joint ventures at 100%, amounted to € 6.53 billion and the company had a Net Asset Value (EPRA NTA) of € 2.34 billion. VGP is listed on Euronext Brussels. (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.
BUSINESS REVIEW
During the first half of 2022, VGP continued on its achievements of 2021 with 1.3 million m2 under construction, a net increase of € 25 million of committed annual rent agreements contracted and 1.55 million m2 of land acquired. At the same time VGP strengthened its capital position with the issue of € 1 billion of bonds and has recycled cash through disposals to its joint ventures. Market fundamentals such as land scarcity and historic low vacancy rates combined with raising inflation resulted in rental growth in existing portfolio's as well as mitigating leverage for rising construction costs for assets under construction.
A third closing was made with VGP European Logistics 2 ('Second Joint Venture') in which the joint venture acquired 13 logistic buildings, including 9 buildings in 7 new VGP parks and another 4 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The 13 buildings are located in Spain (7), Italy (4), the Netherlands (1) and in Romania (1). The transaction value is € 364 million. The net proceeds from this transaction amounts to circa € 215 million.
Following the completion of this third closing of the Second Joint Venture, the Second's Joint Venture's property portfolio consist of 32 completed buildings representing around 642,000 m² of lettable area.
A further closing has occurred in July with the First Joint Venture totalling a gross asset value of € 81 million resulting in gross cash proceeds of € 69.6 million, as well as a follow up closing in the Second Joint Venture for a total gross asset value of € 23.8 million with gross proceeds of € 12.9 million for VGP NV.
In the remainder of the year, the Third Joint Venture is expected to settle upon the completion of the construction works in VGP Park Munich. During Q4 '22 , VGP expects to sell an initial seed portfolio of completed projects to the Fourth Joint Venture.
The signed annualised committed leases amount to € 281.1 million1 at the end of June 2022 and represent a total of 4,855,000 m² of lettable area. Of this total space 1,913,000 m² belong to the own portfolio (1,640,000 m² as at 31 December 2021) and 2,941,000 m² to the joint ventures (2,860,000 m² at 31 December 2021).
During the first half of 2022 VGP delivered in total 9 projects representing 334,000 m² of lettable area, with an additional 40 projects under construction representing 1,346,000 m² of future lettable area2 .
The net valuation of the property portfolio as at 30 June 2022 showed a net valuation gain of € 155.9 million (against a net valuation gain of € 163.2 million per 30 June 2021).
The own investment property portfolio consists of 43 completed buildings representing 991,000 m² of lettable area whereas the joint ventures property portfolio consists of 126 completed buildings representing 2,473,000 m² of lettable area.
Gearing level of the Group as at 30 June 2022 was 35.2%, versus 29.8% as at 31 December 2021,
1 Including joint ventures. As at 30 June 2022 the annualised committed leases for the JVs stood at € 172 million.
2 Including joint ventures.
OPERATING RESULT
| (in thousands of €) | June | June |
|---|---|---|
| 2022 | 2021 | |
| Revenue1 | 35,128 | 18,144 |
| Gross rental income | 19,129 | 7,113 |
| Property operating expenses | (2,028) | (1,071) |
| Net rental income | 17,101 | 6,042² |
| Joint venture management fee income | 9,931 | 8,547 |
| Net valuation gains / (losses) on investment properties | 155,914 | 163,247 |
| Administration expenses² | (20,801) | (20,290) |
| Share of net profits of joint ventures and associates | 31,383 | 84,414 |
| Other expenses | (3,000) | (2,000) |
| Operating profit / (loss) | 190,528 | 239,960 |
| Net financial results | (14,266) | (6,162) |
| Profit before taxes | 176,262 | 233,798 |
| Taxes | (23,124) | (30,001) |
| Profit for the period | 153,138 | 203,797 |
Net rental income
The net rental income increased to € 17.1 million for the first half of 2022 compared to € 6.0 million2 for the first half of 2021 primarily due to full impact of income generating assets delivered during the second half of 2021 and the first half of 2022.
Including VGP's share of the joint ventures on a "look-through" basis net rental income increased by € 15.4 million, or 48% compared to H1 2021 (from € 31.9 million for the period ending 30 June 2021 to € 47.4 million for the period ending 30 June 2022) 3 .
As per H1 2022, total net rental income (JV's at 100%) increased with 29% to € 80.9 million versus € 62.7 million for the period ending 30 June 2021.
Annualised committed rent income
The demand for lettable area resulted in the signing of new lease contracts during the first half of 2022 of € 35.4 million in total of which € 22.4 million related to new or replacement leases (€ 6.8 million on behalf of the joint ventures) and € 9.3 million (€ 8.2 million on behalf of the joint ventures) were related to renewals or prolongations of existing lease contracts. The remainder of the increase (€ 3.6 million of which € 3.3 million on behalf of the joint ventures) due to indexation.
During the period lease contracts for a total amount of € 1.0 million (of which € 0.9 related to the joint ventures' portfolio) were terminated.
1 Revenue is composed of gross rental income, service charge income, property and facility management income and property development income.
2 Restated versus previous reporting due to change of presenting of travel expenses as part of admin costs
3 See attached section 'Supplementary notes not part of the condensed interim financial information' for further details
Net, the annualised committed leases increased to € 281.1 million as at the end of June 2022 1 (compared to € 256.1 million as at 31 December 2021).
Germany, Spain and The Netherlands were the main drivers of growth in new or replacement leases with € 9.32 million of new leases signed during the year in Germany (€ 2.1 million on behalf of the joint ventures), € 3.8 million in Spain (€ 2.6 million on behalf of the joint ventures), The Netherlands for € 3.8 million (€ 3.3 million on behalf of the joint ventures). Other contributing countries include Slovakia for € 2.7 million (€ 0.2 million on behalf of the joint ventures), Romania for € 2.2 million (€ 0.2 million on behalf of the joint ventures), the Czech Republic € 2.1 million (€ 1.4 million on behalf of the joint ventures), Hungary for € 1.1 million (€ 0.1 million on behalf of the joint ventures) and remainder split between Italy, Latvia, and Austria.
As at 30 June 2022, the weighted average term of the combined own and joint venture portfolio stood at 8.2 years2 (compared to 8.6 years as at 31 December 2021). The own portfolio stood at 9.95 years3 and the joint venture portfolio stood at 7.13 years4 .
The Group's completed property portfolio, including the own and joint ventures' property portfolio, reached an occupancy rate of 99% at the end of June 2022 compared to 99.3% at the end of December 2021.
The signed annualised committed leases amount to € 281.1 million5 at the end of June 2022 and represent a total of 4,855,000 m² of lettable area. Of this total space 1,913,000 m² belong to the own portfolio (1,640,000 m² as at 31 December 2021) and 2,941,000 m² to the joint ventures (2,860,000 m² at 31 December 2021).
Net valuation gains on the property portfolio
As at 30 June 2022 the net valuation gains on the property portfolio reached € 155.9 million compared to a net valuation gain of € 163.2 million for the period ended 30 June 2021.
The net valuation gain was mainly driven by: (i) € 68.1 mmillion unrealised valuation gain on the own portfolio, (ii) € 40.2 million unrealised gain on assets being developed on behalf of the joint ventures, and (iii) € 47.6 million realised valuation gain on assets transferred as part of the third close with the Second Joint Venture.
The own property portfolio, excluding development land but including the buildings being constructed on behalf of the Joint Ventures, is valued by the valuation expert at 30 June 2022 based on a weighted average yield of 4.57 % (compared to 4.64% as at 31 December 2021) applied to the contractual rents increased by the estimated rental value on unlet space.
The (re)valuation of the own portfolio was based on the appraisal report of the property expert Jones Lang LaSalle.
Income from joint ventures
The joint venture management fee income increased by € 1.4 million to € 9.9 million. The increase was mainly due to the growth of the joint ventures' portfolio.
1 Including joint ventures. As at 30 June 2022 the annualized committed leases for the joint ventures stood at € 172.7 million compared to € 151.2 million as at 31 Dec '21
2 Weighted average term of the combined committed leases up to the first break stands at 7.9 years at 30 Jun '22
3 Weighted average term of the own portfolio committed leases up to the first break stands at 9.7 years at 30 Jun '22
4 Weighted average term of the JVs portfolio committed leases up to the first break stands at 6.8 years at 30 Jun '22 5
Including JVs. As at 30 June 2022 the annualized committed leases for the joint ventures stood at € 172.7 million.
Property and facility management fee income increased from € 6.4 million for the period ending 30 June 2021 to € 8.1 million for the period ending 30 June 2022. The development management fee income generated during the period was € 1.8 million compared to € 2.1 million for the period ending 30 June 2021.
Share in net profit of the joint ventures
VGP's share of the joint ventures' profit for the period came in at € 31.4 million from € 84.4 million for the period ending 30 June 2021, the decrease is mainly reflecting a lower net valuation gain contribution of the joint ventures' portfolio due to bottoming out of the yield compression.
Net rental income at share increased to € 30.3 million for the period ending 30 June 2022 compared to €27.6 million for the period ended 30 June 2021. The increase reflects the underlying growth of the joint ventures' portfolio resulting from the different closings made between the VGP European Logistics and VGP European Logistics 2 joint ventures since May 2016, as well as rental growth within the portfolio.
At the end of June 2022, the joint ventures (100% share) had € 172.3 million of annualised committed leases representing 2,942,000 m² of lettable area compared to € 151.2 million of annualised committed leases representing 2,545,000 m² at the end of December 2021.
The net valuation gains on investment properties at share decreased from € 84.1 million for the period ending 30 June 2021 to € 15.0 million for the period ending 30 June 2022. The portfolio of the joint ventures, excluding development and the buildings being constructed by VGP on behalf of the Joint Ventures, was valued at a weighted average yield of 4.35% as at 30 June 2022 (compared to 4.53% as at 31 June 2021). The (re)valuation of the First and Second Joint Ventures' portfolios was based on the appraisal report of the property expert Jones Lang LaSalle. The VGP Park München joint venture continued to be measured at its proportional agreed purchase price with Allianz Real Estate, as this is considered to be the best reflection of its fair value. Following the completion of the majority of the buildings such buildings will be carried at fair value and revalued by an external independent valuation expert at least annually in accordance with the Group's valuation rules. (This is consistent with note 3.2 - Critical judgements in applying accounting policies -of the Annual Report 2021).
The net financial expenses of the joint ventures at share for the period ending 30 June 2022 decreased to € 7.8 million.
Administrative costs
The administrative costs for the period were € 20.8 million compared to € 20.3 million for the period ended 30 June 2021 1 . Though it reports an increase of costs, the June 2021 included higher provisions for LTIP and bonus pay-out.
As at 30 June 2022, the group had a headcount of over 385 FTE's in 19 different countries (compared to over 300 people as at 30 June 2021).
Net financial costs
For the period ending 30 June 2022, the financial income was € 8.1 million (€ 5.6 million for the period ending 30 June 2021) driven by € 8.1 million interest income on loans granted to the joint ventures (€ 5.6 million for the period ending 30 June 2021).
1 Restated versus previous reporting due to change of presenting of travel expenses as part of admin costs
The reported financial expenses as at 30 June 2022 of € 22.3 million (€ 11.8 million as at 30 June 2021) are mainly made up of € 27.8 million expenses related to financial debt (€ 15.5 million as at 30 June 2021) and other financial expenses of € 2.5 million (compared to € 1.4 million as at 30 June 2021), partially offset by € 8.8 million of capitalised interests (€ 5.6 million as at 30 June 2021).
As a result, the net financial costs reached € 14.2 million for the period ending 30 June 2022 compared to € 6.2 million at the end of June 2021.
Shareholder loans to the joint ventures amounted to € 454 million as at 30 June 2022 (compared to € 329.1 million as at 30 June 2021) of which € 121.4 million (€ 83.2 million as at 30 June 2021) was related to financing of the buildings under construction and development land held by the joint ventures. Other current receivable amounted to € 169.2 million, relating amongst others to the remaining balance due by Allianz Real Estate of € 73.4 million in respect of their acquisition last year of VGP Park München and which shall become payable by Allianz Real Estate in different instalments based on the completion dates of the respective buildings.
EVOLUTION OF THE DEVELOPMENT ACTIVITIES
The development activities in the first half of 2022 can be summarised as follows:
Completed projects
During the first half of the year 17 projects were completed totalling 334,000 m² of lettable area and representing € 17.1 million of annualised committed leases (€ 12.5 million for VGP's own account and € 4.6 million for the joint ventures).
One completed project has been transferred to the Second Joint Venture in Q1 2022. This building in Fuenlabrada, Spain was delivered totalling 41,745 m2 of lettable area:
Furthermore VGP Park Nürnberg has been acquired as a completed asset. The site is currently in use and has the potential for future redevelopment the site has currently a gross lettable area of 67,000 m2 .
Projects under construction
At the end of June 2022, VGP had 40 buildings under construction for a total future lettable area of 1,346,000 m². The new buildings under construction, which are pre-let for 87.4%1 , represent €88.1 million of annualised leases when fully built and let.
For its own account VGP had 28 buildings under construction totalling 995,000 m² of lettable area representing €59.3 million of annualised leases:
- Germany: 8 buildings for 516,000m2 (3 buildings in VGP Park Giessen am Alten Flughafen and 1 building in each VGP Park Erfurt 2, VGP Park Laatzen, VGP Park Magdeburg, VGP Park Oberkrämer and VGP Park Rostock);
- Czech Republic: 3 building for 111,000 m2 (1 building in VGP Park Hradek Nad Nisou, 1 building in VGP Park Kladno and 1 building in VGP Park Olomouc);
- Romania: 4 buildings for 102,000 m2 (1 building in each VGP Park Arad, VGP Park Brasov, VGP Park Bucharest and VGP Park Sibiu);
- Hungary: 5 buildings for 98,000 m2 (2 buildings in VGP Park Budapest, 2 buildings in VGP Park Gyor Beta and 1 building in VGP Park Kecskemet);
- Slovakia: 2 buildings for 39,000 m2 (all three in VGP Park Bratislava);
1 Calculated based on the contracted rent and estimated market rent for the vacant space.
- Spain: 1 building for 30,000 m2 (in VGP Park Dos Hermanas);
- Italy: 1 building for 6,000 m2 (1 building in VGP Park Parma Lumiere);
- Latvia: 2 buildings for 71,000 m2 (1 building in VGP Park Riga and 1 building in VGP Park Tiraines);
- Netherlands: 3 buildings for 105,000 m2 (2 buildings in VGP Park Nijmegen and 1 building in VGP Park Roosendaal);
- Austria: 2 buildings for 23.000 m2 in (VGP Park Graz 2).
On behalf of the Joint Ventures, VGP is constructing 12 new buildings totalling 352,000 m² of lettable area representing € 28.7 million of annualised leases:
- Czech Republic: 1 building for 5,500 m2 (in VGP Park Chomutov);
- Spain: 3 buildings for 60,000 m2 (1 building in VGP Park San Fernando de Henares and 1 building in VGP Park Zaragoza);
- Germany: 6 buildings for 216,000 m2 (in VGP Park Munich);
- The Netherlands: 2 buildings for 70,000 m2 (1 building in VGP Park Nijmegen and 1 building in VGP Park Roosendaal).
Land bank
During the first half of the year, VGP continued to acquire new land plots to support the future development pipeline. During this period, VGP acquired 1,547,000 m² bringing total development potential to 5.1 million m2 .
Of these land plots, 359,000 m² (23%) is in Germany, 352,000 m² (23%)1 is in Hungary, 174,000 m² (11%) is in the Netherlands, 162,000 m² (10%) is in France, 129,000 m² (8%) in Austria, 128,000 m² (8%) in Spain, 90,000 m² (6%) in Croatia, 68,000 m² (4%) in Italy, 58,000 (4%) in Czech Republic and 26,000 m² (2%) in Portugal.
As at 30 June 2022, VGP had another 3.25 million m² of committed land plots which are expected to be purchased during the next 6-18 months, subject to obtaining the necessary permits. This brings the remaining total owned and committed land bank for development to 11.31 million m² which represents a remaining development potential of 5.1 million m² of which 858,000 m² in Germany, 800,000 m² in Romania, 645,000 m² in The Netherlands, 523,000 m² in the Slovakia, 487,000 m² in Serbia, 434,000 m² in Spain, 336,000 m² in Hungary, 313,000 m² in Italy, 154,000 m² in France, 145,000 m² in Portugal, 142,000m² in Austria, 36,000 m² in Croatia, 240,000 m² in Czech Republic and 14,000 m² in Latvia. Included in the above is the remaining 1,307,000 m² development land bank held by the Joint Ventures with a development potential of circa 666,000 m² of new lettable area.
Besides the owned and committed land bank, VGP has signed non-binding agreements and is currently performing due diligence investigations, on an exclusive basis, on the potential acquisitions of in total circa 601,000 m² of new land plots located in Hungary, Germany, Spain, Portugal and the Czech Republic. This land represents a development potential of circa 254,000 m2 and it is expected that a significant number of these land plots will be contractually locked in during the next 12 months.
1 Including 192,000 m2 from the Nürnberg site in Germany
DISPOSAL GROUP HELD FOR SALE
The balance of the Disposal group held for sale decreased from € 501.9 million as at 31 December 2021 to € 292.2 million as at 30 June 2022 and is composed of assets under construction and development land (at fair value) which are being / will be developed by VGP on behalf of VGP European Logistics and VGP European Logistics 2 and VGP European Logistics 3 joint ventures.
Under the respective joint venture agreements, VGP European Logistics and VGP European Logistics 3 have an exclusive right of first refusal in relation to acquiring the income generating assets developed by VGP that are in Germany, the Czech Republic, Slovakia and Hungary and VGP European Logistics 2 has a similar right for Austria, Italy, the Netherlands, Portugal, Romania and Spain. The development pipeline which is transferred to the joint ventures as part of the different closings between the joint ventures and VGP is being developed at VGP's own risk and subsequently acquired and paid for by the respective joint venture subject to pre-agreed completion and lease parameters.
CAPITAL MANAGEMENT
On the 10th of January 2022, VGP announced the successful issue of its second public benchmark green bond for an aggregate nominal amount of € 1.0 billion, in two tranches, with a € 500 million 5-year bond paying a coupon of 1.625% p.a. and maturing on 17 January 2027 and a € 500 million 8-year bond paying a coupon of 2.250% p.a. and maturing on 17 January 2030. The market received VGP's issuance well as the demand just under 2.5 times the volume of the issue. The proceeds from this issuance will be used to finance and /or refinance a portfolio of eligible assets in accordance with the VGP Green Finance Framework dated March 2021. The bond has been listed on the Luxembourg Stock Exchange (EuroMTF).
Primarily due to this bond issue the total financial debt increased from € 1,384.6 million as at 31 December 2021 to € 2,361.7 million as at 30 June 2022 of which € 33.4 million schuldschein loans (2021: € 33.4 million), €2,304 million of issued bonds (2021: € 1,311 million) and € 23.8 million accrued interest on bonds (2021: € 20.7 million).
The group has access to €200 million revolving credit facilities which as of 30 June 2022 remain entirely undrawn. In august '22 the revolving credit facilities have been increased, at similar terms with € 100 million, increasing total undrawn committed credit facilities up to € 300 million.
The gearing ratio1 of the Group increased from 29.8% at 31 December 2021 to 35.2% as at 30 June 2022.
DIVIDEND
At the Annual General Meeting held on 13 May 2022 a distribution of a gross dividend of € 149.6 million equal to €6.85 per share for year 2021 was approved and this has since been distributed to shareholders on 25 May 2022.
1 Calculated as Net debt / Total equity and liabilities
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS1
CONDENSED CONSOLIDATED INCOME STATEMENT For the six months ended 30 June
| INCOME STATEMENT (in thousand of €) | NOTE | 30.6.2022 | 30.6.2021 |
|---|---|---|---|
| Revenue | 5 | 35,128 | 18,143 |
| Gross rental income | 5 | 19,129 | 7,113 |
| Property operating expenses | (2,028) | (1,071) | |
| Net rental income | 17,101 | 6,042 | |
| Joint venture management fee income | 5 | 9,931 | 8,547 |
| Net valuation gains / (losses) on investment properties | 6 | 155,914 | 163,247 |
| Administration expenses2 | (20,801) | (20,290) | |
| Share in result of Joint Ventures | 7 | 31,383 | 84,414 |
| Other expenses | (3,000) | (2,000) | |
| Operating profit / (loss) | 190,528 | 239,960 | |
| Financial income | 8 | 8,056 | 5,623 |
| Financial expenses | 8 | (22,322) | (11,785) |
| Net financial result | (14,266) | (6,162) | |
| Profit before taxes | 176,262 | 233,798 | |
| Taxes | (23,124) | (30,001) | |
| Profit for the period | 153,138 | 203,797 | |
| Attributable to: | |||
| Shareholders of VGP NV | 9 | 153,138 | 203,797 |
| Non-controlling interests | - | - |
| EARNINGS PER SHARE | NOTE | 30.6.2022 | 30.6.2021 |
|---|---|---|---|
| Basic earnings per share (in €) | 9 | 7.01 | 9.90 |
| Diluted earnings per share (in €) | 9 | 7.01 | 9.90 |
1 The condensed interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.
2 Restated versus previous reporting due to change of presenting of travel expenses as part of admin costs
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period ended 30 June
| STATEMENT OF COMPREHENSIVE INCOME (in thousand of €) | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Profit for the year | 153,138 | 203,797 |
| Other comprehensive income to be reclassified to profit or loss in subsequent periods |
- | - |
| Other comprehensive income not to be reclassified to profit or loss in subsequent periods |
- | - |
| Other comprehensive income for the period | - | - |
| Total comprehensive income / (loss) of the period | 153,138 | 203,797 |
| Attributable to: | ||
| Shareholders of VGP NV | 153,138 | 203,797 |
| Non-controlling interest | - | - |
CONDENSED CONSOLIDATED BALANCE SHEET For the period ended
| ASSETS (in thousand of €) | NOTE | 30.6.2022 | 31.12.2021 |
|---|---|---|---|
| Intangible assets | 1,241 | 1,046 | |
| Investment properties | 10 | 2,403,174 | 1,852,514 |
| Property, plant and equipment | 54,016 | 32,141 | |
| Non-current financial assets | 0 | 0 | |
| Investments in joint venture and associates | 7.2, 7.4 | 965,193 | 858,116 |
| Other non-current receivables | 7.3 | 332,310 | 264,905 |
| Deferred tax assets | 3,280 | 1,953 | |
| Total non-current assets | 3,759,214 | 3,010,675 | |
| Trade and other receivables | 11 | 169,267 | 148,022 |
| Cash and cash equivalents | 648,499 | 222,160 | |
| Disposal group held for sale | 14 | 292,989 | 501,882 |
| Total current assets | 1,110,755 | 872,064 | |
| TOTAL ASSETS | 4,869,969 | 3,882,739 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
|---|---|---|---|
| (in thousands of €) | NOTE | 30.6.2022 | 31.12.2021 |
| Share capital | 12 | 78,458 | 78,458 |
| Share premium | 12 | 574,088 | 574,088 |
| Retained earnings | 1,526,600 | 1,523,019 | |
| Shareholders' equity | 2,179,146 | 2,175,565 | |
| Non-current financial debt | 13 | 2,183,775 | 1,340,609 |
| Other non-current financial liabilities | 0 | 0 | |
| Other non-current liabilities | 41,797 | 32,459 | |
| Deferred tax liabilities | 125,825 | 112,295 | |
| Total non-current liabilities | 2,351,397 | 1,485,363 | |
| Current financial debt | 13 | 177,977 | 44,147 |
| Trade debts and other current liabilities | 126,459 | 107,510 | |
| Liabilities related to disposal group held for sale | 14 | 34,990 | 70,154 |
| Total current liabilities | 339,426 | 221,811 | |
| Total liabilities | 2,690,823 | 1,707,174 | |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 4,869,969 | 3,882,739 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period ended 30 June
| STATEMENT OF CHANGES IN EQUITY (in thousands of €) |
Statutory share capital |
Capital reserve |
IFRS share capital |
Other reserves |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Balance as at 1 January 2021 | 102,641 | (30,416) | 72,225 | 285,420 | 948,092 | 1,305,737 |
| Other comprehensive income / (loss) | - | - | - | - | - | 0 |
| Result of the period | - | - | - | - | 203,797 | 203,797 |
| Effect of disposals | - | - | - | - | - | 0 |
| Total comprehensive income / (loss) | - | - | - | - | 203,797 | 203,797 |
| Capital and share premium increase net of transaction costs (see note 16) |
- | - | - | - | - | - |
| Share capital distribution to shareholders | - | - | - | - | - | - |
| Dividends | - | - | - | - | (75,128) | (75,128) |
| Balance as at 30 June 2021 | 102,641 | (30,416) | 72,225 | 285,420 | 1,076,761 | 1,434,406 |
| Balance as at 1 January 2022 | 108,874 | (30,416) | 78,458 | 574,088 | 1,523,019 | 2,175,565 |
| Other comprehensive income / (loss) | - | - | - | - | - | 0 |
| Result of the period | - | - | - | - | 153,138 | 153,138 |
| Effect of disposals | - | - | - | - | - | 0 |
| Total comprehensive income / (loss) | 0 | 0 | 0 | 0 | 153,138 | 153,138 |
| Capital and share premium increase net of transaction costs (see note 16) |
- | 0 | - | 0 | ||
| Share capital distribution to shareholders | - | - | - | - | - | 0 |
| Dividends | - | - | - | - | (149,557) | (149,557) |
| Balance as at 30 June 2022 | 108,874 | (30,416) | 78,458 | 574,088 | 1,526,600 | 2,179,146 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the period ended 30 June
| CASH FLOW STATEMENT (in thousand of €) | Note | 30.6.2022 | 30.6.2021 |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit before taxes | 176,262 | 233,798 | |
| Adjustments for: | |||
| Depreciation | 1,831 | 1,375 | |
| Unrealised (gains) / losses on investment properties | 6 | (108,266) | (151,429) |
| Realised (gains) / losses on disposal of subsidiaries and investment | |||
| properties Unrealised( gains) / losses on financial instruments and foreign |
6 | (47,648) | (11,818) |
| exchange | 811 | 200 | |
| Interest (income) | (8,056) | (5,623) | |
| Interest expense | 21,511 | 11,585 | |
| Share in (profit) / loss of Joint Venture and associates | 7 | (31,383) | (84,414) |
| Operating profit before changes in working capital and provisions | 5,062 | (6,326) | |
| Decrease/(Increase) in trade and other receivables | (37,080) | (4,417) | |
| (Decrease)/Increase in trade and other payables | (2,189) | (857) | |
| Cash generated from the operations | (34,207) | (11,601) | |
| Interest income | 0 | 1 | |
| Interest (expense) | (25,498) | (15,236) | |
| Income taxes paid | (1,164) | (125) | |
| Net cash generated from operating activities | (60,869) | (26,961) | |
| Cash flows from investing activities | |||
| Proceeds from disposal of tangible assets and other | 17 | 0 | |
| Proceeds from disposal of subsidiaries and investment properties | 15 | 215,457 | 49,647 |
| Investment property and investment property under construction | (472,238) | (231,242) | |
| Distribution by / (investment in) Joint Venture and associates | (8,485) | (500) | |
| Loans provided to Joint Venture and associates | (73,035) | (61,717) | |
| Loans repaid by Joint Venture and associates | 0 | 0 | |
| Net cash used in investing activities | (338,284) | (243,812) | |
| Cash flows from financing activities | |||
| Dividends paid | (149,557) | (75,128) | |
| Proceeds from loans | 13 | 991,149 | 594,149 |
| Loan repayments | 13 | (19,000) | (667) |
| Net cash used in financing activities | 822,592 | 518,354 | |
| Net increase / (decrease) in cash and cash equivalents | 423,439 | 247,581 | |
| Cash and cash equivalents at the beginning of the period | 222,160 | 222,356 | |
| Effect of exchange rate fluctuations | (49) | (742) | |
| Reclassification to (-) / from held for sale | 2,949 | 0 | |
| Cash and cash equivalents at the end of the period | 648,499 | 469,195 |
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS For the period ended 30 June
1. Basis of preparation
The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting", as adopted by the European Union. The consolidated financial information was approved for issue on 25 August 2022 by the Board of Directors.
2. Significant accounting policies
The condensed interim financial statements are prepared on a historic cost basis, with the exception of investment properties and investment property under construction as well as financial derivatives which are stated at fair value. All figures are in thousands of Euros (EUR '000).
The accounting policies adopted are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021 except for following new standards, amendments to standards and interpretations and the accounting policy re share based payments, which became effective during the first half year of 2022:
- Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (applicable for annual periods beginning on or after 1 January 2022)
- Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts Cost of Fulfilling a Contract (applicable for annual periods beginning on or after 1 January 2022)
- Amendments to IFRS 3 Business Combinations: Reference to the Conceptual Framework (applicable for annual periods beginning on or after 1 January 2022)
- Annual Improvements to IFRS Standards 2018–2020 (applicable for annual periods beginning on or after 1 January 2022)
The initial recognition of the above new standards did not have a material impact on the financial position and performance of the Group.
New standards, amendments to standards and interpretations not yet effective during the first half year of 2022:
- IFRS 17 Insurance Contracts (applicable for annual periods beginning on or after 1 January 2023)
- Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 Comparative Information (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
- Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Noncurrent (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
- Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (applicable for annual periods beginning on or after 1 January 2023)
- Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates (applicable for annual periods beginning on or after 1 January 2023)
- Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU)
3. Critical accounting estimates and judgements and key sources of estimation uncertainty
The critical accounting judgements and key sources of estimation uncertainty are consistent with those outlined in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2021 (See Annual Report 2021 – Note 3).
4. Segment reporting
The chief operating decision maker is the person that allocates resources to and assesses the performance of the operating segments. The Group has determined that its chief operating decision-maker is the chief executive officer (CEO) of the Company. He allocates resources to and assesses the performance at business line and country level.
The segmentation for segment reporting within VGP is primarily by business line and secondly by geographical region.
4.1 Business lines
For management purpose, the Group also presents financial information according to management breakdowns, based on these functional allocations of revenues and costs. These amounts are based on a number of assumptions, and accordingly are not prepared in accordance with IFRS audited consolidated financial statements of VGP NV for the periods ended 30 June 2022 and 2021 and year ended 31 December 2021.
Within H1 2022 there have been no new business lines identified, which had not been previously reported in the annual accounts of 2021.
Investment business
The Group's investment or so-called rental business consists of operating profit generated by the completed and leased out projects of the Group's portfolio and the proportional share of the operating profit (excluding net valuation gains) of the completed and leased out projects of the Joint Ventures' portfolio. Revenues and expenses allocated to the rental business unit include 10% of the Group's property operating expenses; other income; other expenses, after deduction of expenses allocated to property development; and share in result of the joint ventures, excluding any revaluation result.
Property development
The Group's property development business consists of the net development result on the Group's development activities. Valuation gains (losses) on investment properties outside the VGP European Logistics and VGP European Logistics 2 joint venture perimeter i.e. Latvia, Serbia, Croatia and France are excluded, as they are assumed to be non-cash generating, on the basis that these assets are assumed to be kept in the Group's own portfolio for the foreseeable future. In addition, 90% of total property operating expenses are allocated to the property development business, as are administration expenses after rental business and property management expenses.
Property and asset management
Property and asset management revenue includes asset management, property management and facility management income. Associated operating, administration and other expenses include directly allocated expenses from the respective asset management, property management and facility management service companies. The administrative expenses of the Czech and German property management companies have been allocated on a 50:50 basis between the rental business and the property and asset management business.
| In thousands of € | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Investment EBITDA | 46,994 | 33,369 |
| Property development EBITDA | 147,139 | 145,892 |
| Property management and asset management EBITDA | 6,668 | 5,009 |
| Total | 200,801 | 184,270 |
Breakdown summary of the business lines
| In thousands of € | For the year ended 30 June 2022 | ||||
|---|---|---|---|---|---|
| Property and asset |
|||||
| Investment | Development | management | Total | ||
| Gross rental income | 19,129 | - | - | 19,129 | |
| Property operating expenses | (202) | (1,826) | - | (2,028) | |
| Net rental income | 18,927 | (1,826) | - | 17,101 | |
| Joint ventures' management fee income | - | - | 9,931 | 9,931 | |
| Net valuation gains / (losses) on investment properties destined to the joint ventures |
- | 163,101 | - | 163,101 | |
| Administration expenses | (1,571) | (14,136) | (3,263) | (18,970) | |
| Share of joint ventures adjusted operating profit after tax ¹ |
29,638 | - | - | 29,638 | |
| Operating EBITDA | 46,994 | 147,139 | 6,668 | 200,801 | |
| Other expenses | - | - | - | (3,000) | |
| Depreciation and amortisation | (179) | (1,615) | (37) | (1,831) | |
| Earnings before interest and tax | 46,815 | 145,524 | 6,631 | 195,970 | |
| Net finance costs - Own | (14,266) | ||||
| Net finance costs - joint ventures and associates | (8,907) | ||||
| Profit before tax | 172,797 | ||||
| Current income taxes - Own | (1,165) | ||||
| Current income taxes - joint ventures and associates | (1,505) | ||||
| Recurrent net income | 170,127 | ||||
| Net valuation gains / (losses) on investment properties – other countries ² |
(7,187) | ||||
| Net valuation gains / (losses) on investment properties - joint ventures and associates |
15,012 | ||||
| Net fair value gain/(loss) on interest rate swaps and other derivatives |
- | ||||
| Net fair value gain/(loss) on interest rate swaps and other derivatives - joint ventures and associates |
1,128 | ||||
| Deferred taxes -Own | (21,959) | ||||
| Deferred taxes -joint ventures and associates | (3,983) | ||||
| Reported profit for the period | 153,138 |
¹ The adjustments to the share of profit from the joint ventures (at share) are composed of € 15 million of net valuation gains on investment properties, € 1.1 million of net fair value gain on interest rate derivatives and € 3.9 million of deferred taxes in respect of these adjustments.
² Relates to developments in countries outside of the joint ventures' perimeter i.e. all countries except for Latvia, France, Serbia and Croatia
| In thousands of € | For the year ended 30 June 2021 | ||||
|---|---|---|---|---|---|
| Property | |||||
| Investment | Development | and asset management |
Total | ||
| Gross rental income | 7,113 | - | - | 7,113 | |
| Property operating expenses | (271) | (2,443) | - | (2,714) | |
| Net rental income | 6,842 | (2,443) | - | 4,399 | |
| Joint ventures' management fee income | - | - | 8,547 | 8,547 | |
| Net valuation gains / (losses) on investment properties destined to the joint ventures |
- | 161,569 | - | 161,569 | |
| Administration expenses | (500) | (13,234) | (3,538) | (17,272) | |
| Share of joint ventures adjusted operating profit after tax ¹ |
27,027 | - | - | 27,027 | |
| Operating EBITDA | 33,369 | 145,892 | 5,009 | 184,270 | |
| Other expenses | - | - | - | (2,000) | |
| Depreciation and amortisation | (5) | (1,335) | (38) | (1,378) | |
| Earnings before interest and tax | 33,364 | 144,557 | 4,971 | 180,892 | |
| Net finance costs - Own | (6,162) | ||||
| Net finance costs - joint ventures and associates | (8,551) | ||||
| Profit before tax | 166,179 | ||||
| Current income taxes - Own | (125) | ||||
| Current income taxes - joint ventures and associates | (1,085) | ||||
| Recurrent net income | 164,969 | ||||
| Net valuation gains / (losses) on investment properties – other countries ² |
1,678 | ||||
| Net valuation gains / (losses) on investment properties - joint ventures and associates |
84,151 | ||||
| Net fair value gain/(loss) on interest rate swaps and other derivatives |
- | ||||
| Net fair value gain/(loss) on interest rate swaps and other derivatives - joint ventures and associates |
462 | ||||
| Deferred taxes -Own | (29,876) | ||||
| Deferred taxes -joint ventures and associates | (17,587) | ||||
| Reported profit for the period | 203,797 |
¹ The adjustments to the share of profit from the joint ventures (at share) are composed of € 84.2 million of net valuation gains on investment properties, € 0.5 million of net fair value gain on interest rate derivatives and € 17.6 million of deferred taxes in respect of these adjustments.
² Relates to developments in countries outside of the joint ventures' perimeter i.e. all countries except for Latvia.
4.2 Geographical information
This basic segmentation reflects the geographical markets in Europe in which VGP operates, VGP's operations are split into the individual countries where it is active. This segmentation is important for VGP as the nature of the activities and the customers have similar economic characteristics within those segments.
| 30 June 2022 In thousands of € |
Gross rental income (Incl. JV at share) |
Net rental income (Incl. JV at share) |
Operating EBITDA (Incl. JV at share) |
Investment properties (Incl. JV at share) |
Total assets (Incl. JV at share) |
Capital expenditure¹ |
|---|---|---|---|---|---|---|
| Western Europe | ||||||
| Germany | 28,114 | 22,537 | 83,935 | 2,502,706 | 2,639,137 | 252,027 |
| Spain | 4,665 | 3,240 | 41,231 | 388,448 | 466,514 | 36,767 |
| Austria | 352 | (252) | 4,005 | 131,523 | 141,168 | 39,084 |
| Netherlands | 2,587 | (416) | 28,310 | 333,495 | 356,768 | 12,967 |
| Italy | 1,447 | 775 | 20,461 | 81,653 | 97,945 | 12,170 |
| France | - | (28) | (414) | 13,240 | 17,006 | 13,240 |
| Portugal | 104 | 259 | (1,104) | 32,746 | 44,659 | 8,427 |
| Luxembourg | - | - | - | - | 213,483 | - |
| Belgium | - | - | - | - | 753,530 | - |
| 37,269 | 26,115 | 176,424 | 3,483,811 | 4,730,210 | 374,681 | |
| Central and Eastern Europe | ||||||
| Czech Republic | 8,347 | 7,712 | 20,324 | 547,731 | 568,726 | 36,748 |
| Slovakia | 2,102 | 999 | (3,944) | 209,486 | 216,129 | 21,565 |
| Hungary | 2,198 | 1,658 | 8,213 | 161,862 | 174,429 | 26,195 |
| Romania | 1,994 | 1,099 | (5,583) | 139,558 | 160,935 | 20,000 |
| 14,641 | 11,468 | 19,010 | 1,058,637 | 1,120,219 | 104,508 | |
| Baltics and Balkan | ||||||
| Latvia | 1,267 | 525 | 354 | 84,200 | 88,021 | 17,891 |
| Serbia | - | (615) | (863) | 23,952 | 24,840 | 685 |
| 1,267 | (90) | (509) | 108,152 | 112,861 | 18,576 | |
| Other² | 31 | 9,865 | 5,876 | 5,432 | 6,994 | 5,357 |
| Total | 53,208 | 47,358 | 200,801 | 4,656,032 | 5,970,284 | 503,121 |
¹ Includes joint venture at share.
³ Other includes the Group central costs and costs relating to the operational business which are not specifically geographically allocated.
² Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio amounts to € 477.8 million and amounts to € 25.3 million on development properties of the First and Second Joint Venture.
| 31 December 2021 In thousands of € |
Gross rental income (Incl. JV at share) |
Net rental income (Incl. JV at share) |
Operating EBITDA (Incl. JV at share) |
Investment properties (Incl. JV at share) |
Total assets (Incl. JV at share) |
Capital expenditure¹ |
|---|---|---|---|---|---|---|
| Western Europe | ||||||
| Germany | 42,442 | 33,297 | 317,886 | 2,169,350 | 2,249,782 | 244,805 |
| Spain | 6,267 | 3,979 | 49,137 | 392,795 | 409,536 | 100,921 |
| Austria | 663 | 280 | 26,359 | 61,825 | 66,709 | 33,312 |
| Netherlands | 3,445 | 3,072 | 68,180 | 306,143 | 326,511 | 61,449 |
| Italy | 1,476 | 744 | 10,710 | 93,070 | 110,591 | 35,252 |
| France | - | (19) | (19) | - | 100 | - |
| Portugal | - | (228) | 5,150 | 24,873 | 29,754 | 13,056 |
| Luxembourg | - | - | - | - | 160,676 | - |
| Belgium | - | - | - | - | 381,379 | - |
| 54,293 | 41,125 | 477,403 | 3,048,056 | 3,735,037 | 488,794 | |
| Central and Eastern Europe | ||||||
| Czech Republic | 13,507 | 12,529 | 97,861 | 488,585 | 504,922 | 65,284 |
| Slovakia | 2,056 | 1,003 | 40,045 | 190,729 | 197,004 | 68,568 |
| Hungary | 4,075 | 3,548 | 20,305 | 126,706 | 140,346 | 40,548 |
| Romania | 3,227 | 1,754 | 3,124 | 132,705 | 156,090 | 41,424 |
| 22,865 | 18,834 | 161,335 | 938,725 | 998,361 | 215,824 | |
| Baltics and Balkan | ||||||
| Latvia | 2,891 | 2,691 | 2,558 | 72,840 | 76,796 | 15,288 |
| Serbia | 4 | (51) | (213) | 23,950 | 25,176 | 23,269 |
| 2,895 | 2,640 | 2,345 | 96,790 | 101,972 | 38,557 | |
| Other² | - | 8,119 | (6,962) | 73 | 864 | - |
| Total | 80,053 | 70,718 | 634,121 | 4,083,644 | 4,836,234 | 743,176 |
¹ Capital expenditures includes additions and acquisition of investment properties and development land but does not include tenant incentives, letting fees, and capitalised interest. Capital expenditure directly incurred for the own portfolio amounts to € 719.3 million (of which € 299.1 related to land acquisition) and amounts to € 23.9 million on development properties of the First and Second Joint Venture.
² Other includes the Group central costs and costs relating to the operational business which are not specifically geographically allocated.
5. Revenue
| In thousands of € | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Rental income from investment properties | 14,597 | 5,907 |
| Rent incentives | 4,532 | 1,206 |
| Total gross rental income | 19,129 | 7,113 |
| Property and facility management income | 8,097 | 6,416 |
| Development management income | 1,834 | 2,131 |
| Joint Venture management fee income | 9,931 | 8,547 |
| Service charge income | 6,068 | 2,483 |
| Total revenue | 35,128 | 18,143 |
The Group leases out its investment property under operating leases. The operating leases are generally for terms of more than 5 years. The gross rental income reflects the full impact of the income generating assets delivered during the first half year of 2022. During the first half of 2022 rental income included € 1.9 million of rent for the period 1 January 2022 to 15 March 2022 related to the property portfolio sold during the third closing with the Second Joint Venture on 15 March 2022.
At the end of June 2022, the Group (including the joint ventures) had annualised committed leases of € 281.1 million1 compared to € 256 million 2 as at 31 December 2021,
The breakdown of future lease income on an annualised basis for the own portfolio was as follows:
| In thousands of € | 30.6.2022 | 30.06.2021 |
|---|---|---|
| Less than one year | 108,119 | 57,910 |
| Between one and five years | 405,706 | 216,434 |
| More than five years | 577,049 | 280,581 |
| Total | 1,090,874 | 554,925 |
6. Net valuation gains / (losses) on investment properties
| In thousands of € | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Unrealised valuation gains / (losses) on investment properties | 68,055 | 141,309 |
| Unrealised valuation gains / (losses) on disposal group held for sale | 40,211 | 10,120 |
| Realised valuation gains / (losses) on disposal of subsidiaries and | ||
| investment properties | 47,648 | 11,818 |
| Total | 155,914 | 163,247 |
The own property portfolio, excluding development land but including the assets being developed on behalf of the joint ventures, is valued by the valuation expert at 30 June 2022 based on a weighted average yield of 4.57% (compared to 4.64% as at 31 December 2021) applied to the contractual rents increased by the estimated rental value on unlet space. A 0,10% variation of this market rate would give rise to a variation of the total portfolio value of € 54.0 million.
1 € 172.7 million related to the joint ventures' property portfolio and € 108 million related to the own property portfolio.
2 € 151.1 million related to the Joint ventures' property portfolio and € 105 million related to the own property portfolio.
7. Investments in Joint Ventures
7.1 Profit from Joint Ventures
The table below presents a summary Income Statement of the Group's joint ventures with (i) Allianz Real Estate (VGP European Logistics, VGP European Logistics 2, VGP Park München) and the associates; (ii) the joint venture with Roozen Landgoederen Beheer (LPM), (iii) the joint venture with VUSA (Belartza) located in San Sebastian, Spain and (iv) the joint venture with Weimer Bau (Siegen) in Germany, all of which are accounted for using the equity method.
VGP European Logistics and VGP European Logistics 2 are incorporated in Luxembourg. VGP European Logistics owns logistics property assets in Germany, the Czech Republic, Slovakia and Hungary. VGP European Logistics 2 owns logistics property assets in Spain, Austria, the Netherlands, Italy and Romania. VGP Park München is incorporated in München (Germany) and owns and develops the VGP park located in München. LPM Joint Venture will develop Logistics Park Moerdijk ("LPM") together with the Port Authority Moerdijk on a 50:50-basis. The objective is to build a platform of new, grade A logistics and industrial properties of which 50% for account of the LPM Joint Venture 50% directly for account of the Port Authority Moerdijk.
The joint ventures with Belartza and Siegen contain land to be developed jointly with its partner. In Siegen a part of the land has already been sold in August 2022.
VGP NV holds 50% directly in all joint ventures and holds another 5.1% in the subsidiaries of VGP European Logistics holding assets in Germany.
| In thousands of € | VGP European Logistics (excl. minorities) at 100% |
VGP European Logistics 2 at 100% |
VGP Park München at 100% |
Development Joint Ventures at 100 % |
Joint Ventures at 50% |
VGP European Logistics German Asset Companies at 5.1% |
30.06.2022 |
|---|---|---|---|---|---|---|---|
| Gross rental income | 48,042 | 15,261 | 1,574 | 22 | 32,450 | 1,629 | 34,079 |
| Property Operating expenses | |||||||
| - underlying property operating expenses |
818 | (1,695) | 52 | 318 | (253) | 6 | (247) |
| - property management fees | (4,313) | (2,189) | (329) | 0 | (3,416) | (159) | (3,575) |
| Net rental income | 44,547 | 11,377 | 1,297 | 340 | 28,781 | 1,476 | 30,257 |
| Net valuation gains / (losses) on investment properties |
43,199 | (15,487) | 0 | 0 | 13,856 | 1,156 | 15,012 |
| Administration expenses | (871) | (235) | (52) | (48) | (603) | (19) | (622) |
| Operating profit | 86,875 | (4,345) | 1,245 | 292 | 42,034 | 2,613 | 44,647 |
| Net financial result | (9,552) | (4,219) | (1,011) | (7) | (7,395) | (381) | (7,776) |
| Taxes | (12,677) | 2,396 | (30) | (5) | (5,157) | (331) | (5,488) |
| Profit for the period | 64,646 | (6,168) | 204 | 280 | 29,482 | 1,901 | 31,383 |
| In thousands of € | VGP European Logistics (excl. minorities) at 100% |
VGP European Logistics 2 at 100% |
VGP Park München at 100% |
Development Joint Ventures at 100 % |
Joint Ventures at 50% |
VGP European Logistics German Asset Companies at 5.1% |
30.06.2021 |
|---|---|---|---|---|---|---|---|
| Gross rental income | 45,094 | 11,332 | 1,578 | 0 | 29,002 | 1,531 | 30,533 |
| Property Operating expenses | |||||||
| - underlying property operating expenses |
(10) | (536) | (43) | 277 | (156) | 14 | (142) |
| - property management fees | (3,657) | (1,400) | (313) | 0 | (2,685) | (133) | (2,818) |
| Net rental income | 41,426 | 9,396 | 1,222 | 277 | 26,161 | 1,413 | 27,573 |
| Net valuation gains / (losses) on investment properties |
138,733 | 19,555 | 0 | 0 | 79,144 | 5,007 | 84,151 |
| Administration expenses | (611) | (106) | (60) | (293) | (535) | (14) | (549) |
| Operating profit | 179,548 | 28,845 | 1,162 | (16) | 104,770 | 6,406 | 111,175 |
| Net financial result | (10,668) | (3,681) | (927) | (110) | (7,693) | (396) | (8,089) |
| Taxes | (29,133) | (5,815) | (543) | 0 | (17,746) | (927) | (18,672) |
| Profit for the period | 139,747 | 19,349 | (308) | (126) | 79,331 | 5,083 | 84,414 |
| First Joint Venture (excl. minorities) |
Second Joint Venture |
Third Joint Venture |
Development Joint Ventures |
Joint Ventures |
First Joint Venture's German Asset Companies |
||
|---|---|---|---|---|---|---|---|
| In thousands of € | at 100% | at 100% | at 100% | at 100 % | at 50% | at 5.1% | 30.06.2022 |
| Investment properties | 2,252,447 | 757,735 | 594,037 | 151,162 | 1,877,692 | 85,723 | 1,963,415 |
| Other assets | 759 | 1,155 | 3,751 | 75 | 2,869 | - | 2,869 |
| Total non-current assets |
2,253,206 | 758,890 | 597,788 | 151,237 | 1,880,561 | 85,723 | 1,966,284 |
| Trade and other receivables |
12,046 | 20,473 | 11,362 | 1,241 | 22,561 | 417 | 22,978 |
| Cash and cash equivalents |
84,044 | 34,487 | 28,425 | 144 | 73,550 | 2,696 | 76,246 |
| Total current assets | 96,090 | 54,960 | 39,787 | 1,385 | 96,111 | 3,113 | 99,224 |
| Total assets | 2,349,296 | 813,850 | 637,575 | 152,622 | 1,976,672 | 88,836 | 2,065,508 |
| Non-current financial debt |
883,647 | 417,315 | 336,198 | 75,341 | 856,251 | 35,056 | 891,307 |
| Other non-current financial liabilities |
- | - | - | - | - | - | - |
| Other non-current liabilities |
5,926 | 5,552 | - | 950 | 6,214 | 161 | 6,375 |
| Deferred tax liabilities | 217,714 | 53,753 | 2,658 | 583 | 137,354 | 7,594 | 144,948 |
| Total non-current liabilities |
1,107,288 | 476,620 | 338,856 | 76,874 | 999,819 | 42,811 | 1,042,630 |
| Current financial debt | 23,096 | 8,415 | - | - | 15,755 | 744 | 16,499 |
| Trade debts and other current liabilities |
16,699 | 23,540 | 37,028 | 4,344 | 40,806 | 380 | 41,186 |
| Total current | |||||||
| liabilities | 39,794 | 31,955 | 37,028 | 4,344 | 56,561 | 1,124 | 57,685 |
| Total liabilities | 1,147,082 | 508,575 | 375,884 | 81,218 | 1,056,380 | 43,935 | 1,100,315 |
| Net assets | 1,202,214 | 305,275 | 261,691 | 71,404 | 920,292 | 44,901 | 965,193 |
7.2 Summarised balance sheet information in respect of Joint Ventures
| In thousands of € | First Joint Venture (excl. minorities) at 100% |
Second Joint Venture at 100% |
Third Joint Venture at 100% |
Development Joint Ventures at 100 % |
Joint Ventures at 50% |
First Joint Venture's German Asset Companies at 5.1% |
31.12 2021 |
|---|---|---|---|---|---|---|---|
| Investment properties | 2,215,851 | 451,500 | 551,441 | 105,322 | 1,662,057 | 84,713 | 1,746,770 |
| Other assets | 41 | 54 | 3,531 | 75 | 1,850 | - | 1,851 |
| Total non-current assets |
2,215,892 | 451,554 | 554,972 | 105,397 | 1,663,908 | 84,713 | 1,748,620 |
| Trade and other receivables |
10,920 | 8,044 | 5,257 | 1,247 | 12,734 | 395 | 13,129 |
| Cash and cash equivalents |
59,747 | 19,192 | 16,691 | 421 | 48,025 | 1,836 | 49,862 |
| Total current assets | 70,667 | 27,236 | 21,948 | 1,668 | 60,760 | 2,231 | 62,990 |
| Total assets | 2,286,560 | 478,790 | 576,920 | 107,065 | 1,724,667 | 86,943 | 1,811,611 |
| Non-current financial debt |
892,941 | 239,304 | 271,522 | 53,774 | 728,771 | 35,325 | 764,095 |
| Other non-current financial liabilities |
399 | (15) | - | - | 192 | - | 192 |
| Other non-current liabilities |
6,158 | 2,709 | - | 950 | 4,909 | 141 | 5,049 |
| Deferred tax liabilities | 207,402 | 40,578 | 2,408 | 583 | 125,486 | 7,331 | 132,816 |
| Total non-current liabilities |
1,106,901 | 282,576 | 273,930 | 55,307 | 859,357 | 42,796 | 902,153 |
| Current financial debt | 23,588 | 5,033 | - | - | 14,310 | 744 | 15,055 |
| Trade debts and other current liabilities |
18,505 | 7,203 | 41,459 | 4,604 | 35,885 | 402 | 36,288 |
| Total current liabilities |
42,093 | 12,236 | 41,459 | 4,604 | 50,196 | 1,146 | 51,342 |
| 0 | |||||||
| Total liabilities | 1,148,994 | 294,812 | 315,389 | 59,911 | 909,553 | 43,942 | 953,495 |
| Net assets | 1,137,566 | 183,978 | 261,531 | 47,154 | 815,114 | 43,001 | 858,116 |
The second Joint Venture (VGP European Logistics 2) recorded one closing during the year. On 15 March 2022, VGP completed a third closing, whereby the Second Joint Venture ("VGP European Logistics 2 S.a r.l.") acquired 13 logistic buildings, including 9 buildings in 7 new VGP parks and another 4 newly completed buildings (in parks which were previously transferred to the Second Joint Venture).
At July 1st 2022, two additional closings with the First and Second Joint Venture transitioned for a total gross asset value of € 105 million, resulting in net proceeds for VGP in amount of € 82 million.
The Joint Ventures' property portfolio, excluding development land and buildings being constructed by VGP on behalf of the Joint Ventures, is valued at 30 June 2022 based on a weighted average yield of 4.35%1 (compared to 4.28% as at 31 December 2021). A 0.10% variation of this market rate would give rise to a variation of the Joint Venture portfolio value (at 100%) of € 86.6 million.
The (re)valuation of the First and Second Joint Ventures' portfolio was based on the appraisal report of the property expert Jones Lang LaSalle.
1 The First and Second Joint Venture have been valued by an independent valuation expert. The valuation of the Third Joint Venture is based on the agreed proportional purchase price with Allianz Real Estate. The LPM Joint Venture only holds development land and hence has been excluded from the weighted average yield calculation.
VGP provides certain services, including asset-, property- and development advisory and management, for the Joint Ventures and receives fees from the Joint Ventures for doing so. Those services are carried out on an arms-length basis and do not give VGP any control over the relevant Joint Ventures (nor any unilateral material decision-making rights). Significant transactions and decisions within the Joint Ventures require full Board and/or Shareholder approval, in accordance with the terms of the Joint Venture agreement.
7.3 Other non-current receivables
| in thousands of € | 30.06.2022 | 31.12.2021 |
|---|---|---|
| Shareholder loans to First Joint Venture | 43,009 | 42,183 |
| Shareholder loans to Second Joint Venture | 30,377 | 15,963 |
| Shareholder loans to Third Joint Venture | 168,099 | 135,908 |
| Shareholder loans to Development Joint Ventures | 72,796 | 52,940 |
| Shareholder loans to associates (subsidiaries of First Joint Venture) | 17,066 | 16,976 |
| Construction and development loans to subsidiaries of First Joint Venture | 49,506 | 36,769 |
| Construction and development loans to subsidiaries of Second Joint Venture | 73,526 | 46,192 |
| Construction and development loans reclassified as assets held for sale | (123,032) | (82,961) |
| Other non-current receivables | 963 | 935 |
| Total | 332,310 | 264,905 |
7.4 Investments in joint ventures and associates
| in thousands of € | 30.06.2022 | 31.12.2021 |
|---|---|---|
| As at 1 January | 858,116 | 654,773 |
| Additions | 81,217 | 23,770 |
| Result of the year | 31,383 | 186,703 |
| Repayment of equity | (5,500) | (7,130) |
| Adjustment from sale of participations | (23) | - |
| As at the end of the period | 965,193 | 858,116 |
8. Net financial result
| In thousands of € | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Interest income - loans to joint venture and associates | 8,056 | 5,622 |
| Financial income | 8,056 | 5,623 |
| Bond interest expense | (25,401) | (14,279) |
| Bank interest expense – variable debt | (2,504) | (1,433) |
| Interest capitalised into investment properties | 8,834 | 5,571 |
| Net foreign exchange losses | (811) | (200) |
| Other financial expenses | (2,440) | (1,444) |
| Financial expenses | (22,322) | (11,785) |
| Net financial result | (14,266) | (6,162) |
9. Earnings per share
9.1 Earnings per ordinary share (EPS)
| In number | 30.6.2022 | 30.6.2021 |
|---|---|---|
| Weighted average number of ordinary shares (basic) | 21,833,050 | 20,583,050 |
| Dilution | - | - |
| Weighted average number of ordinary shares (diluted) | 21,833,050 | 20,583,050 |
| In thousands of € | 30.6.2022 | 30.6.2021 |
| Result for the period attributable to the Group and to ordinary | ||
| shareholders | 153,138 | 203,797 |
| Earnings per share (in €) - basic | 7.01 | 9.90 |
| Earnings per share (in €) - diluted | 7.01 | 9.90 |
9.2 EPRA NAV's – EPEA NAV's per share
The EPRA NAV metrics make adjustments to the IFRS NAV in order to provide stakeholders with the most relevant information on the fair value of the assets and liabilities. The three different EPRA NAV indicators are calculated on the basis of the following scenarios:
Net Reinstatement Value: based on the assumption that entities never sell assets and aims to reflect the value needed to build the entity anew. The purpose of this indicator is to reflect what would be required to reconstitute the company through the investment markets based on the current capital and financing structure, including Real Estate Transfer Taxes. EPRA NRV per share refers to the EPRA NRV based on the number of shares in circulation as at the balance sheet date. See www.epra.com.
Net Tangible Assets: assumes that entities buy and sell assets, thereby realizing certain levels of deferred taxation. This pertains to the NAV adjusted to include property and other investments at fair value and to exclude certain items that are not expected to be firmly established in a business model with long-term investment properties. EPRA NTA per share refers to the EPRA NTA based on the number of shares in circulation as at the balance sheet date. See www.epra.com.
Net Disposal Value: provides the reader with a scenario of the sale of the company's assets leading to the realization of deferred taxes, financial instruments and certain other adjustments. This NAV should not be considered a liquidation NAV as in many cases the fair value is not equal to the liquidation value. The EPRA NDV per share refers to the EPRA NDV based on the number of shares in circulation as at the balance sheet date. See www.epra.com.
| 30 June 2022 | EPRA NRV | EPRA NTA | EPRA NDV | EPRA NAV | EPRA NNNAV |
|---|---|---|---|---|---|
| In thousands of € | |||||
| IFRS NAV | 2,179,146 | 2,179,146 | 2,179,146 | 2,179,146 | 2,179,146 |
| IFRS NAV per share (in euros) | 99.81 | 99.81 | 99.81 | 99.81 | 99.81 |
| NAV at fair value (after the exercise of options, convertibles and other equity) |
2,179,146 | 2,179,146 | 2,179,146 | 2,179,146 | 2,179,146 |
| To exclude: | |||||
| Deferred tax | 157,508 | 157,508 | - | 157,508 | - |
| Intangibles as per IFRS balance sheet | - | (1,241) | - | - | |
| Subtotal | 2,336,654 | 2,335,413 | 2,179,146 | 2,336,654 | 2,179,146 |
| Fair value of fixed interest rate debt | - | - | 474,817 | - | 474,817 |
| Real estate transfer tax | 77,992 | - | - | - | - |
| NAV | 2,414,646 | 2,335,413 | 2,653,963 | 2,336,654 | 2,653,963 |
| Number of shares | 21,833,050 | 21,833,050 | 21,833,050 | 21,833,050 | 21,833,050 |
| NAV / share (in euros) | 110.60 | 106.97 | 121.56 | 107.02 | 121.56 |
| 31 December 2021 | EPRA NRV | EPRA NTA | EPRA NDV | EPRA NAV | EPRA NNNAV |
|---|---|---|---|---|---|
| In thousands of € | |||||
| IFRS NAV | 2,175,565 | 2,175,565 | 2,175,565 | 2,175,565 | 2,175,565 |
| IFRS NAV per share (in euros) | 99.65 | 99.65 | 99.65 | 99.65 | 99.65 |
| NAV at fair value (after the exercise of | |||||
| options, convertibles and other equity) | 2,175,565 | 2,175,565 | 2,175,565 | 2,175,565 | 2,175,565 |
| To exclude: | |||||
| Deferred tax | 160,176 | 160,176 | - | 160,176 | - |
| Intangibles as per IFRS balance sheet | - | (1,051) | - | - | |
| Subtotal | 2,335,741 | 2,334,690 | 2,175,565 | 2,335,741 | 2,175,565 |
| Fair value of fixed interest rate debt | - | - | (7,470) | - | (7,470) |
| Real estate transfer tax | 63,285 | - | - | - | - |
| NAV | 2,399,026 | 2,334,690 | 2,168,095 | 2,335,741 | 2,168,095 |
| Number of shares | 21,833,050 | 21,833,050 | 21,833,050 | 21,833,050 | 21,833,050 |
| NAV / share (in euros) | 109.88 | 106.93 | 99.30 | 106.98 | 99.30 |
10. Investment properties
| 30.6.2022 | ||||
|---|---|---|---|---|
| In thousands of € | Completed | Under Construction |
Development land |
Total |
| As at 1 January | 562,730 | 855,160 | 434,624 | 1,852,514 |
| Reclassification from held for sale | 183,100 | 160,770 | 3,735 | 347,605 |
| Capex | 105,479 | 187,469 | 11,584 | 304,633 |
| Acquisitions | 36,282 | 2,381 | 134,597 | 173,260 |
| Capitalised interest | 62 | 8,743 | 28 | 8,833 |
| Capitalised rent free and agent's fee | 3,524 | 240 | 2,035 | 5,799 |
| Sales and disposal | (215,958) | (115,874) | (3,757) | (335,589) |
| Transfer on start-up of development | - | 20,404 | (20,404) | - |
| Transfer on completion of development | 262,070 | (262,070) | - | - |
| Net gain from value adjustments in investment properties |
23,165 | 46,277 | (1,388) | 68,054 |
| Reclassification to held for sale | (21,935) | - | - | (21,935) |
| As at June 30 | 938,620 | 903,500 | 561,054 | 2,403,174 |
| 31.12.2021 | ||||
|---|---|---|---|---|
| In thousands of € | Completed | Under Construction |
Development land |
Total |
| As at 1 January | 166,410 | 456,681 | 297,060 | 920,151 |
| Reclassification from held for sale | - | - | - | - |
| Capex | 163,678 | 231,983 | 24,499 | 420,160 |
| Acquisitions | - | 17,935 | 281,211 | 299,146 |
| Capitalised interest | 777 | 12,435 | - | 13,212 |
| Capitalised rent free and agent's fee | 7,995 | 2,045 | 676 | 10,716 |
| Sales and disposal | (36,419) | - | - | (36,419) |
| Transfer on start-up of development | - | 177,545 | (177,545) | - |
| Transfer on completion of development | 318,947 | (318,947) | - | - |
| Net gain from value adjustments in investment properties |
124,443 | 436,253 | 12,457 | 573,153 |
| Reclassification to (-) / from held for sale | (183,100) | (160,770) | (3,735) | (347,605) |
| As at 31 December | 562,730 | 855,160 | 434,624 | 1,852,514 |
10.1 Fair value hierarchy of the Group's investment properties
All of the Group's properties are level 3, as defined by IFRS 13, in the fair value hierarchy as at 30 June 2022 and there were no transfers between levels during the year. Level 3 inputs used in valuing the properties are those which are unobservable, as opposed to level 1 (inputs from quoted prices) and level 2 (observable inputs either directly, i.e. as prices, or indirectly, i.e. derived from prices).
10.2 Property valuation techniques and related quantitative information
(i) Valuation process
The Group's own investment properties and the joint venture's investment properties were valued at 30 June 2022 by Jones Lang LaSalle. The valuation process was unchanged compared to the valuation process described in the 2021 Annual Report (page 265-266).
(ii) Quantitative information about fair value measurements using unobservable inputs
The quantitative information in the following tables is taken from the different reports produced by the independent real estate experts, The figures provide the range of values and the weighted average of the assumptions used in the determination of the fair value of investment properties.
| Fair value 30 Jun-22 |
|||||
|---|---|---|---|---|---|
| Region | Segment | (€ '000) | Valuation technique | Level 3 - Unobservable inputs | Range |
| Czech Republic | IP | 87,930 | Discounted cash flow | ERV per m² (in €) | 38-56 |
| Discount rate | 4.25%-6.00% | ||||
| Exit yield | 4.25%-5.00% | ||||
| Weighted average yield | 4,65% | ||||
| Cost to completion (in '000) | 250 | ||||
| Properties valued (aggregate m²) | 89.912 | ||||
| WAULT (until maturity) (in years) | 6.31 | ||||
| WAULT (until first break) (in years) | 6.31 | ||||
| IPUC | 103,570 | Discounted cash flow | ERV per m² (in €) | 48-60 | |
| Discount rate | 4.25%-4.90% | ||||
| Exit yield | 4.25%-4.90% | ||||
| Weighted average yield | 4,71% | ||||
| Cost to completion (in '000) | 14.900 | ||||
| Properties valued (aggregate m²) | 111.248 | ||||
| DL | 38,278 | Sales comparison | Price per m² | ||
| Germany | IP | 640,170 | Discounted cash flow | ERV per m² (in €) | 40-79 |
| Discount rate | 4.15%-6.00% | ||||
| Exit yield | 3.30%-5.00% | ||||
| Weighted average yield | 4,31% | ||||
| Cost to completion (in '000) | 31.822 | ||||
| Properties valued (aggregate m²) | 518.110 | ||||
| WAULT (until maturity) (in years) | 7.21 | ||||
| WAULT (until first break) (in years) | 6.88 | ||||
| IPUC | 558,930 | Discounted cash flow | ERV per m² (in €) | 44-94 | |
| Discount rate | 4.15%-6.50% | ||||
| Exit yield | 3.10%-4.30% | ||||
| Weighted average yield | 3,80% | ||||
| Cost to completion (in '000) | 284.237 | ||||
| Properties valued (aggregate m²) | 516.285 | ||||
| DL | 100,378 | Sales comparison | Price per m² | ||
| Spain | IP | 49,200 | Equivalent yield | ERV per m² (in €) | 42-51 |
| Exit yield | 4.65%-4.79% | ||||
| Reversionary yield | 4.91% |
| Weighted average yield | 4,95% | ||||
|---|---|---|---|---|---|
| Cost to completion (in '000) | 600 | ||||
| Properties valued (aggregate m²) | 48.506 | ||||
| WAULT (until maturity) (in years) | 4.15 | ||||
| WAULT (until first break) (in years) | 3.48 | ||||
| IPUC | 18,750 | Equivalent yield | ERV per m² (in €) | 39-64 | |
| Exit yield | 4.20%-5.20% | ||||
| Reversionary yield | 4.48%-5.43% | ||||
| Weighted average yield | 5,60% | ||||
| Cost to completion (in '000) | 1.700 | ||||
| Properties valued (aggregate m²) | 29.644 | ||||
| DL | 92,112 | Sales comparison | Price per m² | ||
| Romania | IP | 5,700 | Discounted cash flow | ERV per m² (in €) | 50 |
| Discount rate | 8.50% | ||||
| Exit yield | 8.00% | ||||
| Weighted average yield | 8,41% | ||||
| Cost to completion (in '000) | 0 | ||||
| Properties valued (aggregate m²) | 9.556 | ||||
| WAULT (until maturity) (in years) | 5.02 | ||||
| WAULT (until first break) (in years) | 5.02 | ||||
| IPUC | 48,900 | Discounted cash flow | ERV per m² (in €) | 46-61 | |
| Discount rate | 8.40%-9.50% | ||||
| Exit yield | 7.65%-8.75% | ||||
| Weighted average yield | 9,51% | ||||
| Cost to completion (in '000) | 6.860 | ||||
| Properties valued (aggregate m²) | 101.614 | ||||
| DL | 42,908 | Sales comparison | Price per m² | ||
| Netherlands | DL | 37,547 | Sales comparison | Price per m² | |
| Italy | IPUC | 3,300 | Discounted cash flow | ERV per m² (in €) | 88 |
| Discount rate | 6.85% | ||||
| Exit yield | 5.00%% | ||||
| Weighted average yield | 5,69% | ||||
| Cost to completion (in '000) | 5.432 | ||||
| Properties valued (aggregate m²) | 5.656 | ||||
| DL | 30,551 | Sales comparison | Price per m² | ||
| Austria | IPUC | 53,190 | Discounted cash flow | ERV per m² (in €) | 78-193 |
| Discount rate | 5.00%-5.50% | ||||
| Exit yield | 3.50%-4.25% | ||||
| Weighted average yield | 3,71% | ||||
| Cost to completion (in '000) | 39.587 | ||||
| Properties valued (aggregate m²) | 22.730 | ||||
| DL | 63,448 | Sales comparison | Price per m² | ||
| Hungary | IP | 29,950 | Discounted cash flow | ERV per m² (in €) Discount rate |
60-66 6.50%-7.00% |
| Exit yield | 6.00%-6.50% | ||||
| Weighted average yield | 7,09% | ||||
| Cost to completion (in '000) Properties valued (aggregate m²) |
0 33.711 |
||||
| WAULT (until maturity) (in years) | 7.38 | ||||
| WAULT (until first break) (in years) | 6.44 | ||||
| IPUC | 50,590 | Discounted cash flow | ERV per m² (in €) | 50-61 |
| Exit yield | 5.75%-6.50% | ||||
|---|---|---|---|---|---|
| Weighted average yield | 6,72% | ||||
| Cost to completion (in '000) | 25.766 | ||||
| Properties valued (aggregate m²) | 97.579 | ||||
| DL | 38,608 | Sales comparison | Price per m² | ||
| Latvia | IP | 41,110 | Discounted cash flow | ERV per m² (in €) | 52 |
| Discount rate | 7.25%-8.15% | ||||
| Exit yield | 7.15% | ||||
| Weighted average yield | 7,71% | ||||
| Cost to completion (in '000) | 1.000 | ||||
| Properties valued (aggregate m²) | 62.545 | ||||
| WAULT (until maturity) (in years) | 7.00 | ||||
| WAULT (until first break) (in years) | 7.00 | ||||
| IPUC | 41,450 | Discounted cash flow | ERV per m² (in €) | 58-61 | |
| Discount rate | 7.00% | ||||
| Exit yield | 7.00% | ||||
| Weighted average yield | 7,21% | ||||
| Cost to completion (in '000) | 17.150 | ||||
| Properties valued (aggregate m²) | 70.605 | ||||
| DL | 1,640 | Sales comparison | Price per m² | ||
| Slovakia | IP | 84,560 | Discounted cash flow | ERV per m² (in €) | 40 |
| Discount rate | 5.35% | ||||
| Exit yield | 5.35% | ||||
| Weighted average yield | 5,07% | ||||
| Cost to completion (in '000) | 850 | ||||
| Properties valued (aggregate m²) | 100.664 | ||||
| WAULT (until maturity) (in years) | 9.91 | ||||
| WAULT (until first break) (in years) | 9.91 | ||||
| Slovakia | IPUC | 24,820 | Discounted cash flow | ERV per m² (in €) | 47-55 |
| Discount rate | 5.35%-6.00% | ||||
| Exit yield | 5.35%-5.50% | ||||
| Weighted average yield | 5,76% | ||||
| Cost to completion (in '000) | 10.600 | ||||
| Properties valued (aggregate m²) | 39.262 | ||||
| Slovakia | DL | 61,558 | Sales comparison | Price per m² | |
| Portugal | DL | 11,476 | Sales comparison | Price per m² | |
| Serbia | DL | 23,952 | Sales comparison | Price per m² | |
| Croatia | DL | 5,358 | Sales comparison | Price per m² | |
| France | DL | 13,240 | Sales comparison | Price per m² | |
Total 2,403,174
IP= completed investment property IPUC= investment property under construction DL= development land
11. Trade and other receivables
| In thousands of € | 30.6.2022 | 31.12.2021 |
|---|---|---|
| Trade receivables | 12,464 | 9,283 |
| Tax receivables - VAT | 67,866 | 64,417 |
| Accrued income and deferred charges | 1,984 | 1,592 |
| Other receivables | 89,691 | 86,490 |
| Reclassification to (-) / from held for sale | (2,738) | (13,760) |
| Total | 169,267 | 148,022 |
12. Share capital and other reserves
12.1 Share capital
| Number of Shares | Par value of Shares | |
|---|---|---|
| Issued and fully paid | (€ 000) | |
| Ordinary Shares issued at 1 January 2022 | 21,833,050 | 78,458 |
| issue of new shares | - | - |
| Ordinary Shares issued at 30 June 2022 | 21,833,050 | 78,458 |
The statutory share capital of the Company amounts to € 108,873 k. The € 30.4 million capital reserve included in the Statement of Changes in Equity, relates to the elimination of the contribution in kind of the shares of a number of Group companies and the deduction of all costs in relation to the issuing of the new shares and the stock exchange listing of the existing shares from the equity of the company, at the time of the initial public offering ("IPO") in 2007 (see also "Statement of changes in equity").
13. Current and non-current financial debts
The contractual maturities of interest-bearing loans and borrowings (current and non-current) are as
| follows: | |||||
|---|---|---|---|---|---|
| MATURITY | 30.6.2022 | ||||
| In thousands of € | Outstanding balance | < 1 year | > 1-5 year | > 5 year | |
| Non-current | |||||
| Bank borrowings | - | - | - | ||
| Schuldschein Loan | 28,946 | 26,946 | 2,000 | ||
| Bonds | |||||
| 3.90% bonds Sep -23 | 224,209 | - | 224,209 | - | |
| 3.25% bonds Jul - 24 | 74,761 | - | 74,761 | - | |
| 3.35% bonds Mar - 25 | 79,852 | - | 79,852 | - | |
| 3.50% bonds Mar - 26 | 189,185 | - | 189,185 | - | |
| 1.50% bonds Apr - 29 | 595,047 | - | 595,047 | ||
| 1.625% bonds Jan - 27 | 496,496 | 496,496 | - | ||
| 2.25% bonds Jan - 30 | 495,280 | - | 495,280 | ||
| 2,154,829 | - | 1,064,502 | 1,090,327 | ||
| Total non-current financial debt | 2,183,775 | - | 1,091,448 | 1,092,326 | |
| Current | |||||
| Bank borrowings | - | - | |||
| Schuldschein Loan | 4,457 | 4,457 | |||
| Bonds (2.75% bonds Apr - 23) | 149,693 | 149,693 | |||
| Accrued interests | 23,827 | 23,827 | - | - | |
| Liabilities related to disposal group held for sale |
- | ||||
| Total current financial debt | 177,977 | 177,977 | - | - | |
| Total current and non-current financial debt |
2,361,752 | 177,977 | 1,091,448 | 1,092,326 |
| MATURITY | 31.12.2021 | |||||
|---|---|---|---|---|---|---|
| In thousands of € | Outstanding balance | < 1 year | > 1-5 year | > 5 year | ||
| Non-current | ||||||
| Bank borrowings | - | - | - | |||
| Schuldschein Loan | 28,939 | 26,940 | 1,999 | |||
| Bonds | ||||||
| 2.75% bonds Apr - 23 | 149,492 | - | 149,492 | - | ||
| 3.90% bonds Sep -23 | 223,890 | - | 223,890 | - | ||
| 3.25% bonds Jul - 24 | 74,702 | - | 74,702 | - | ||
| 3.35% bonds Mar - 25 | 79,825 | - | 79,825 | - | ||
| 3.50% bonds Mar - 26 | 189,076 | - | 189,076 | - | ||
| 1.50% bonds Apr - 29 | 594,684 | - | 594,684 | |||
| 1,311,669 | - | 716,985 | 594,684 | |||
| Total non-current financial debt | 1,340,609 | - | 743,925 | 596,684 | ||
| Current | ||||||
| Bank borrowings | 18,917 | 18,917 | ||||
| Schuldschein Loan | 4,496 | 4,496 | ||||
| Bonds | ||||||
| Accrued interests | 20,734 | 20,734 | - | - | ||
| Liabilities related to disposal group held for sale |
- | |||||
| Total current financial debt | 44,147 | 44,147 | - | - | ||
| Total current and non-current financial debt |
1,384,756 | 44,147 | 743,925 | 596,684 |
The above 30 June 2022 balances include capitalised finance costs of (i) € 201k on bank borrowings and schuldschein loans (2021: € 147k) and (ii) € 9,425k on bonds of (2021: € 8,331 k).
The bond "Apr-23" has been reclassified from non-current to current financial debt as it is due April 2023.
The accrued interest relates to the 81 issued bonds (€ 23.5 million) and the Schuldschein loans (€ 0.34 million). The coupons of the bonds are payable annually on 2 April for the Apr-23 Bond, 21 September for the Sep-23 Bond, 6 July for the Jul-24 Bond, 30 March for the Mar-25 Bond, 19 March for the Mar-26, 8 April for the Apr-29 bond and 17 January for bonds Jan-27 & Jan-30. The interest on the Schuldschein loans are payable on a semi-annual basis on 15 April and 15 October for the variable rate Schuldschein loans and annually on 15 October for the fixed rate Schuldschein loans.
1 The issued bond as per January 10th 2022 has been considered as two bonds, given their dual tranche maturity as well as different cost
13.1 Overview
13.1.1 Bank loans
The loans and credit facilities granted to the VGP Group are all denominated in € can be summarised as follows (all figures below are stated excluding capitalised finance costs):
| 30.6.2022 In thousands of € |
Facility amount |
Facility expiry date |
Outstanding balance |
< 1 year | > 1-5 year |
> 5 year |
|---|---|---|---|---|---|---|
| KBC Bank NV | 75,000 | 31-dec-26 | - | - | - | - |
| Belfius Bank NV | 75,000 | 31-dec-26 | - | - | - | - |
| BNP Paribas Fortis | 50,000 | 31-dec-24 | - | - | - | - |
| Total bank debt | 200,000 | - | - | - | - |
| 31.12.2021 In thousands of € |
Facility amount |
Facility expiry date |
Outstanding balance |
< 1 year | > 1-5 year |
> 5 year |
|---|---|---|---|---|---|---|
| Swedbank AS - Latvia | 22,000 | 31-mrt-22 | 19,000 | 19,000 | - | - |
| KBC Bank NV | 75,000 | 31-dec-26 | - | - | - | - |
| Belfius Bank NV | 75,000 | 31-dec-26 | - | - | - | - |
| BNP Paribas Fortis | 50,000 | 31-dec-24 | - | - | - | - |
| Total bank debt | 222,000 | 19,000 | 19,000 | - | - |
The loan, with outstanding balance of € 19 million as per 31.12.2021 has been repaid on its maturity date in full. In August 2022 VGP NV increased its credit facility with Belfius Bank NV with € 100 million, as such increasing total committed revolving facilities to € 300 million, which are to date undrawn.
13.1.2 Schuldschein loans
The Schuldschein loans represents a combination of fixed and floating notes whereby the variable rates represent a nominal amount of EUR 21.5 million which is not hedged. The current average interest rate is 2.73 per cent per annum. The loans have a remaining weighted average term of 3.6 years.
| 30.6.2022 In thousands of € |
Facility amount |
Facility expiry date |
Outstanding balance |
< 1 year | > 1-5 year |
> 5 year |
|---|---|---|---|---|---|---|
| Schuldschein loans | 33,500 | Oct -22 to Oct-27 | 33,500 | 4,500 | 27,000 | 2,000 |
| 31.12.2021 | Facility amount |
Facility expiry date |
Outstanding balance |
< 1 year | > 1-5 year |
> 5 year |
| In thousands of € | ||||||
| Schuldschein loans | 33,500 | Oct -22 to Oct-27 | 33,500 | 4,500 | 27,000 | 2,000 |
13.1.3 Bonds
The following eight bonds are outstanding at 30 June 2022:
- the € 150 million fixed rate bond maturing on 2 April 2023 which carries a coupon of 2.75% per annum (listed on the regulated market of Euronext Brussels with ISIN Code: BE0002677582 )("Apr-23 Bond")
- € 225 million fixed rate bonds due 21 September 2023 carry a coupon of 3.90% per annum. The bonds have been listed on the regulated market of NYSE Euronext Brussels (ISIN Code: BE0002258276). ("Sep-23 Bond")
- € 75 million fixed rate bonds due 6 July 2024 which carry a coupon of 3.25% per annum. The bonds have been listed on the regulated market of NYSE Euronext Brussels (ISIN Code: BE0002287564). ("Jul-24 Bond")
- € 80 million fixed rate bonds due 30 March 2025 carry a coupon of 3.35% per annum. The bonds are not listed (ISIN Code: BE6294349194). ("Mar-25 Bond")
- € 190 million fixed rate bonds due 19 March 2026 carry a coupon of 3.50% per annum. The bonds have been listed on the regulated market of NYSE Euronext Brussels (ISIN Code: BE0002611896). ("Mar-26 Bond")
- € 600 million fixed rate bonds due 8 April 2029 carry a coupon of 1.50% per annum. The bonds have been listed on the Luxembourg Stock Exchange (Euro MTF) (ISIN Code: BE6327721237). ("Apr-29 Bond")
- € 1000 million fixed rate bonds, dual tranche on five and eight years due 17 January 2027 and 17 January 2030, carry a coupon of 1.625% and 2.25% per annum. The bonds have been listed on the Luxembourg Stock Exchange (Euro MTF) (ISIN Code: BE6332786449 and BE6332787454). ("Jan-27 and Jan-30 Bond")
13.2 Key terms and covenants
Please refer to Annual Report 2021 - Note 17.2 Key terms and covenants for further information.
During the first half year of 2022, the Group operated well within its bank loans, schuldschein loans and bond covenants and there were no events of default nor were there any breaches of covenants with respect to loan agreements noted.
14. Assets classified as held for sale and liabilities associated with those assets
| In thousands of € | 30.6.2022 | 31.12.2021 |
|---|---|---|
| Intangible assets | - | 5 |
| Investment properties | 289,443 | 484,360 |
| Property, plant and equipment | - | - |
| Deferred tax assets | - | - |
| Trade and other receivables | 2,738 | 13,760 |
| Cash and cash equivalents | 808 | 3,757 |
| Disposal group held for sale | 292,989 | 501,882 |
| Non-current financial debt | - | - |
| Other non-current financial liabilities | - | - |
| Other non-current liabilities | (1) | (2,296) |
| Deferred tax liabilities | (34,963) | (49,834) |
| Current financial debt | - | - |
| Trade debts and other current liabilities | (26) | (18,025) |
| Liabilities associated with assets classified as held for sale | (34,990) | (70,155) |
| TOTAL NET ASSETS | 257,999 | 431,727 |
In order to sustain its growth over the medium term, VGP entered into three 50/50 joint ventures with Allianz (First, Second and Fourth Joint Venture) in respect of acquiring income generating assets developed by VGP. These Joint Ventures act as an exclusive take-out vehicle of the income generating assets, allowing VGP to partially recycle its initially invested capital when completed projects are acquired by the Joint Ventures. VGP is then able to re-invest the proceeds in the continued expansion of its development pipeline, including the further expansion of its land bank, allowing VGP to concentrate on its core development activities.
Each of these joint ventures have an exclusive right of first refusal in relation to acquiring the following income generating assets of the Group: (i) for the First and Fourth Joint Venture: the assets located in the Czech Republic, Germany, Hungary and the Slovak Republic; and (ii) for the Second Joint Venture: the assets located in Austria, Italy, the Benelux, Portugal, Romania and Spain.
The development pipeline which will be transferred as part of any future acquisition transaction between the Joint Venture and VGP is being developed at VGP's own risk and subsequently acquired and paid for by these joint ventures subject to pre-agreed completion and lease parameters.
As at 30 June 2022 the assets of the respective project companies which were earmarked to be transferred to the First and Second Joint Venture in the future, were therefore reclassified as disposal group held for sale.
The investment properties correspond to the fair value of the asset under construction which are being developed by VGP on behalf of the First and Second Joint Venture. This balance includes € 123 million of interest-bearing development and construction loans (2021: € 82.9 million) granted by VGP to these joint ventures to finance their respective development pipeline.
| In thousands of € | 30.6.2022 | 31.12.2021 |
|---|---|---|
| Investment property | 272,376 | 54,496 |
| Trade and other receivables | 13,180 | 678 |
| Cash and cash equivalents | 17,279 | 2,172 |
| Non-current financial debt | 0 | 0 |
| Shareholder debt | (172,220) | (41,658) |
| Other non-current financial liabilities | (2,458) | (502) |
| Deferred tax liabilities | (24,627) | (2,192) |
| Trade debts and other current liabilities | (13,443) | (1,108) |
| Total net assets disposed | 90,087 | 11,886 |
| Realized valuation gain on sale | 46,733 | 12,136 |
| Total non controlling interest retained by VGP | 0 | (1,108) |
| Shareholder loans repaid at closing | 159,325 | 40,362 |
| Equity contribution | (63,409) | (11,457) |
| Total consideration | 232,736 | 51,819 |
| Consideration paid in cash | 232,736 | 51,819 |
| Cash disposed | (17,279) | (2,172) |
| Net cash inflow from divestment of subsidiaries and investment | ||
| properties | 215,457 | 49,647 |
15. Cash flow from disposal of subsidiaries and investment properties
On 16th of March 2022 VGP announced the successful third closing with its 50:50 joint venture, VGP European Logistics II ('Second Joint Venture'). The transaction comprised of 13 logistic buildings, including 9 buildings in 7 new VGP parks and another 4 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The transaction value was € 364 million1 and gross proceeds from this transaction amounted to circa € 233 million. Following the completion of this third closing of the Second Joint Venture, the Second's Joint Venture's property portfolio consist of 32 completed buildings representing around 642,000 m² of lettable area, with a 99.8% occupancy rate.
1 The transaction value is composed of the purchase price for the completed income generating buildings and the net book value of the development pipeline which is transferred as part of a closing but not yet paid for by the First Joint Venture.
16. Capital management
VGP is continuously optimising its capital structure targeting to maximise shareholder value while keeping the desired flexibility to support its growth. The Group operates within and applies a maximum gearing ratio of net debt / total shareholders' equity and liabilities at 65%.
As at 30 June 2022 the Group's gearing was as follows:
| In thousands of € | 30.6.2022 | 31.12.2021 | 30.6.2021 |
|---|---|---|---|
| Non-current financial debt | 2,183,775 | 1,340,609 | 1,343,876 |
| Other non-current financial liabilities | 0 | 0 | 0 |
| Current financial debt | 177,977 | 44,147 | 34,791 |
| Financial debt classified under liabilities related to disposal | |||
| group held for sale | 0 | 0 | 0 |
| Total financial debt | 2,361,752 | 1,384,756 | 1,378,667 |
| Cash and cash equivalents | (648,499) | (222,160) | (469,195) |
| Cash and cash equivalents classified as disposal group held for sale |
(808) | (3,757) | 0 |
| Total net debt (A) | 1,712,445 | 1,158,839 | 909,472 |
| Total shareholders 'equity and liabilities (B) | 4,869,969 | 3,882,739 | 2,987,138 |
| Gearing ratio ((A)/(B)) | 35.2% | 29.8% | 30.4% |
17. Fair value
The following tables list the different classes of financial assets and financial liabilities with their carrying amounts in the balance sheet and their respective fair value and analysed by their measurement category under IFRS 9.
Abbreviations used in accordance with IFRS 9 are:
| AC | Financial assets or financial liabilities measured at amortised cost |
|---|---|
| FVTPL | Financial assets measured at fair value through profit or loss |
| HFT | Financial liabilities Held for Trading |
| 30.6.2022 | ||||
|---|---|---|---|---|
| In thousands of € | Category in accordance with IFRS 9 |
Carrying amount |
Fair value | Fair value hierarchy |
| Assets | ||||
| Other non-current receivables | AC | 332,310 | 332,310 | Level 2 |
| Trade receivables | AC | 12,464 | 12,464 | Level 2 |
| Other receivables | AC | 89,691 | 89,691 | |
| Derivative financial assets | FVTPL | - - |
Level 2 Level 2 |
|
| Cash and cash equivalents | AC | 647,575 647,575 |
Level 2 | |
| Reclassification to (-) from held for sale | (816) | (816) | ||
| Total | 1,081,224 | 1,081,224 | ||
| Liabilities | ||||
| Financial debt | ||||
| Bank debt | AC | 33,403 | 33,403 | Level 2 |
| Bonds | AC | 2,304,522 | 1,837,860 | Level 1 |
| Trade payables | AC | 88,848 | 88,848 | Level 2 |
| Other liabilities | AC | 71,713 | 71,713 | Level 2 |
| Derivative financial labilities | HFT | - | Level 2 | |
| Reclassification to liabilities related to | - | |||
| disposal group held for sale | (12) | (12) | ||
| Total | 2,498,474 | 2,031,812 |
| 31.12.2021 In thousands of € |
Category in accordance with IFRS 9 |
Carrying amount | Fair value | Fair value hierarchy |
|
|---|---|---|---|---|---|
| Assets | |||||
| Other non-current receivables | AC | 264,905 | 264,905 | Level 2 | |
| Trade receivables | AC | 9,283 | 9,283 | Level 2 | |
| Other receivables | AC | 86,490 | 86,490 | Level 2 | |
| Derivative financial assets | FVTPL | 0 | 0 | Level 2 | |
| Cash and cash equivalents | AC | 222,935 | 222,935 | Level 2 | |
| Reclassification to (-) from held for sale |
(5,295) | (5,295) | |||
| Total | 578,318 | 578,318 | |||
| Liabilities Financial debt |
|||||
| Bank debt | AC | 52,353 | 52,353 | Level 2 | |
| Bonds | AC | 1,311,669 | 1,331,248 | Level 1 | |
| Trade payables | AC | 95,185 | 95,185 | Level 2 | |
| Other liabilities | AC | 57,244 | 57,244 | Level 2 | |
| Derivative financial labilities | HFT | 0 | 0 | Level 2 | |
| Reclassification to liabilities related to disposal group held for sale |
(19,646) | (19,646) | |||
| Total | 1,496,805 | 1,516,384 |
18. Contingencies and commitments
| (in thousands of €) | 30.06.2022 | 31.12.2021 |
|---|---|---|
| Contingent liabilities | 8,007 | 6,266 |
| Commitments to purchase land | 234,884 | 402,094 |
| Commitments to develop new projects | 534,753 | 685,574 |
Contingent liabilities mainly relate to bank guarantees linked to land plots and built out of infrastructure on development land.
The commitment to purchase land relates to contracts concerning the future purchase of 3.2 million m² of land for which deposits totalling € 28.3 million have been made (2021: 3,981,000 m² with deposits amounting to € 13 million). The down payment on land was classified under investment properties as at 30 June 2022 (same classification treatment applied for 2021) and is mainly composed of the first paid instalment (€ 16.7 million) in respect of the acquisition of a new land plot in Koblenz (Germany). It is expected that this land plot will be fully acquired during the second half of the year.
19. Related parties
On 16th of March 2022, VGP completed the third closing with its 50:50 joint venture, VGP European Logistics II ('Second Joint Venture'). The transaction comprised of 13 logistic buildings, including 9 buildings in 7 new VGP parks and another 4 newly completed logistic buildings which were developed in parks previously transferred to the Joint Venture. The transaction value was € 364 million1 and gross proceeds from this transaction amounted to circa € 233 million (see also notes 6, 7.2 and 15).
20. Events after the balance sheet date
As per July 1st two additional closings with the First and Second Joint Venture occurred for a total gross asset value of € 105 million resulting in net cash proceeds for VGP in amount of € 82 million.
As per valuta date, August 12th, VGP increased its revolving credit facility with € 100 million, bringing total revolving credit facilities to € 300 million. To date these facilities remain undrawn.
1 The transaction value is composed of the purchase price for the completed income generating buildings and the net book value of the development pipeline which is transferred as part of a closing but not yet paid for by the First Joint Venture.
SUPPLEMENTARY NOTES NOT PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION For the period ended 30 June
1 INCOME STATEMENT, PROPORTIONALLY CONSOLIDATED
The table below includes the proportional consolidated income statement interest of the Group in the Joint Ventures. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Ventures have been included in the 50% Joint Ventures' figures (share of VGP).
| Proportionally consolidated income statement | 30.6.2022 | 30.6.2021 | ||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Ventures |
Total | Group | Joint Ventures |
Total |
| Gross rental income | 19,129 | 34,080 | 53,209 | 7,113 | 30,533 | 37,646 |
| Property operating expenses | (2,028) | (3,822) | (5,850) | (2,714) | (2,960) | (5,674) |
| Net rental and related income | 17,101 | 30,258 | 47,359 | 4,399 | 27,573 | 31,972 |
| Joint venture management fee income | 9,931 | 0 | 9,931 | 8,547 | 0 | 8,547 |
| Net valuation gains / (losses) on investment properties |
155,914 | 15,012 | 170,926 | 163,247 | 84,151 | 247,398 |
| Administration expenses | (20,802) | (622) | (21,424) | (18,647) | (549) | (19,196) |
| Other expenses | (3,000) | 0 | (3,000) | (2,000) | 0 | (2,000) |
| Operating profit / (loss) | 159,144 | 44,648 | 203,792 | 155,546 | 111,175 | 266,721 |
| Net financial result | (14,266) | (7,776) | (22,042) | (6,162) | (8,089) | (14,251) |
| Taxes | (23,124) | (5,488) | (28,612) | (30,001) | (18,672) | (48,673) |
| Profit for the period | 121,754 | 31,384 | 153,138 | 119,383 | 84,414 | 203,797 |
2 BALANCE SHEET, PROPORTIONALLY CONSOLIDATED
The table below includes the proportional consolidated balance sheet interest of the Group in the Joint Ventures. The interest held directly by the Group (5.1%) in the German asset companies of the Joint Ventures have been included in the 50% Joint Ventures' figures (share of VGP).
| Proportionally consolidated balance sheet | 30.6.2022 | 31.12.2021 | ||||
|---|---|---|---|---|---|---|
| In thousands of € | Group | Joint Venture |
Total | Group | Joint Venture |
Total |
| Investment properties | 2,403,174 | 1,963,415 | 4,366,589 | 1,852,514 | 1,746,770 | 3,599,284 |
| Investment properties included in assets held for | ||||||
| sale | 289,443 | - | 289,443 | 484,360 | - | 484,360 |
| Total investment properties | 2,692,617 | 1,963,415 | 4,656,032 | 2,336,874 | 1,746,770 | 4,083,644 |
| Other assets | 390,847 | 2,869 | 393,716 | 300,050 | 1,851 | 301,901 |
| Total non-current assets | 3,083,464 | 1,966,284 | 5,049,748 | 2,636,924 | 1,748,620 | 4,385,544 |
| Trade and other receivables | 169,267 | 22,978 | 192,245 | 148,022 | 13,129 | 161,151 |
| Cash and cash equivalents | 648,499 | 76,246 | 724,745 | 222,160 | 49,862 | 272,022 |
| Disposal group held for sale | 3,546 | - | 3,546 | 17,517 | - | 17,517 |
| Total current assets | 821,312 | 99,224 | 920,536 | 387,699 | 62,990 | 450,689 |
| Total assets | 3,904,776 | 2,065,508 | 5,970,284 | 3,024,623 | 1,811,611 | 4,836,234 |
| Non-current financial debt | 2,183,775 | 891,307 | 3,075,082 | 1,340,609 | 764,095 | 2,104,704 |
| Other non-current financial liabilities | - | - | - | - | 192 | 192 |
| Other non-current liabilities | 41,797 | 6,375 | 48,172 | 32,459 | 5,049 | 37,508 |
| Deferred tax liabilities | 125,825 | 144,948 | 270,773 | 112,295 | 132,816 | 245,111 |
| Total non-current liabilities | 2,351,397 | 1,042,630 | 3,394,027 | 1,485,363 | 902,153 | 2,387,516 |
| - | - | |||||
| Current financial debt | 177,977 | 16,499 | 194,476 | 44,147 | 15,055 | 59,202 |
| Trade debts and other current liabilities | 126,460 | 41,186 | 167,646 | 107,510 | 36,288 | 143,798 |
| Liabilities related to disposal group held for sale | 34,989 | - | 34,989 | 70,154 | - | 70,154 |
| Total current liabilities | 339,426 | 57,685 | 397,111 | 221,811 | 51,342 | 273,153 |
| Total liabilities | 2,690,823 | 1,100,315 | 3,791,138 | 1,707,174 | 953,495 | 2,660,669 |
| Net assets | 1,213,953 | 965,193 | 2,179,146 | 1,317,449 | 858,116 | 2,175,565 |
AUDITOR'S REPORT
Report on the review of the consolidated interim financial information of VGP NV for the six-month period ended 30 June 2022
In the context of our appointment as the company's statutory auditor, we report to you on the consolidated interim financial information. This consolidated interim financial information comprises the condensed consolidated balance sheet as at 30 June 2022, the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the period of six months then ended, as well as selective notes 1 to 20.
Report on the consolidated interim financial information
We have reviewed the consolidated interim financial information of VGP NV ("the company") and its subsidiaries (jointly "the group"), prepared in accordance with International Accounting Standard (IAS) 34, "Interim Financial Reporting" as adopted by the European Union.
The condensed consolidated balance sheet shows total assets of 4 869 969 (000) EUR and the condensed consolidated income statement shows a consolidated profit (group share) for the period then ended of 153 138 (000) EUR.
The board of directors of the company is responsible for the preparation and fair presentation of the consolidated interim financial information in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.
Scope of review
We conducted our review of the consolidated interim financial information in accordance with International Standard on Review Engagements (ISRE) 2410, "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit performed in accordance with the International Standards on Auditing (ISA) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the consolidated interim financial information.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the consolidated interim financial information of VGP NV has not been prepared, in all material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union.
Signed at Antwerp.
The statutory auditor
Deloitte Bedrijfsrevisoren/Réviseurs d'Entreprises BV/SRL Represented by Kathleen De Brabander
GLOSSARY
Allianz or Allianz Real Estate
Means, in relation to (i) the First Joint Venture, Allianz AZ Finance VII Luxembourg S.A., SAS Allianz Logistique S.A.S.U. and Allianz Benelux SA (all affiliated companies of Allianz Real Estate GmbH) taken together; (ii)the Second Joint Venture, Allianz AZ Finance VII Luxembourg S.A., and (iii) the Third Joint Venture, Allianz Pensionskasse AG, Allianz Versorgungskasse Versicherungsverein a.G., Allianz Lebensversicherungs-AG and Allianz Lebensversicherungs AG.
Allianz Joint Ventures or AZ JV
Means the First Joint Venture, the Second Joint Venture and the Third Joint Venture taken together.
AZ JVA(s) or Allianz Joint Venture Agreement(s)
Means either and each of (i) the joint venture agreement made between Allianz and VGP NV in relation to the First Joint Venture; (ii) the joint venture agreement made between Allianz and VGP NV in relation to the Second Joint Venture; and (iii) the joint venture agreement made between Allianz and VGP Logistics S.à r.l. (a 100% subsidiary of VGP NV) in relation to the Third Joint Venture.
Annualised committed leases or annualised rent income
The annualised committed leases or the committed annualised rent income represents the annualised rent income generated or to be generated by executed lease – and future lease agreements.
Break
First option to terminate a lease.
Contractual rent
The gross rent as contractually agreed in the lease on the date of signing.
Derivatives
As a borrower, VGP wishes to protect itself from any rise in interest rates. This interest rate risk can be partially hedged by the use of derivatives (such as interest rate swap contracts).
Discounted cash flow
This is a valuation method based on a detailed projected revenue flow that is discounted to a net current value at a given discount rate based on the risk of the assets to be valued.
EPRA
The European Public Real Estate Association, a real estate industry body, which has issued Best Practices Recommendations Guidelines in order to provide consistency and transparency in real estate reporting across Europe.
Equivalent yield (true and nominal)
Is a weighted average of the net initial yield and reversionary yield and represents the return a property will produce based upon the timing of the income received. The true equivalent yield assumes rents are received quarterly in advance. The nominal equivalent assumes rents are received annually in arrears.
Estimated rental value ("ERV")
Estimated rental value (ERV) is the external valuers' opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a property.
Exit yield
Is the capitalisation rate applied to the net income at the end of the discounted cash flow model period to provide a capital value or exit value which an entity expects to obtain for an asset after this period.
Fair value
The fair value is defined in IAS 40 as the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. In addition, market value must reflect current rental agreements, the reasonable assumptions in respect of potential rental income and expected costs.
First Joint Venture
Means VGP European Logistics S.à r.l., the 50:50 joint venture between VGP and Allianz.
Fourth Joint Venture
Means VGP European Logistics 3 S.à r.l., the 50:50 joint venture between VGP and Allianz.
Gearing ratio
Is a ratio calculated as consolidated net financial debt divided by total equity and liabilities or total assets.
IAS/IFRS
International Accounting Standards / International Financial Reporting Standards. The international accounting standards drawn up by the International Accounting Standards Board (IASB), for the preparation of financial statements.
Second Joint Venture
Means VGP European Logistics 2 S.à r.l., the 50:50 joint venture between VGP and Allianz.
VGP European Logistics or VGP European Logistics joint venture
Means the First Joint Venture.
VGP European Logistics 2 or VGP European Logistics 2 joint venture
Means the Second Joint Venture.
VGP Park Moerdijk
Means the LPM Joint Venture.
VGP Park München or VGP Park München joint venture
Means the Third Joint Venture.
Joint Ventures
Means either and each of (i) the First Joint Venture; (ii) the Second Joint Venture, (iii) the Third Joint Venture; and (iv) the LPM Joint Venture.
LPM Joint Venture or LPM
Means LPM Holding B.V., the 50:50 joint venture between VGP and Roozen Landgoederen Beheer.
LPM JVA or LPM Joint Venture Agreement
Means the joint venture agreement made between Roozen Landgoederen Beheer and VGP NV in relation to the LPM Joint Venture.
Lease expiry date
The date on which a lease can be cancelled.
Net asset value
The value of the total assets minus the value of the total liabilities.
Net financial debt
Total financial debt minus cash and cash equivalents.
Net Initial Yield
Is the annualised rents generated by an asset, after the deduction of an estimate of annual recurring irrecoverable property outgoings, expressed as a percentage of the asset valuation (after notional purchaser's costs).
Occupancy rate
The occupancy rate is calculated by dividing the total leased out lettable area (m²) by the total lettable area (m²) including any vacant area (m²).
Prime yield
The ratio between the (initial) contractual rent of a purchased property and the acquisition value at a prime location.
Property portfolio
The property investments, including property for lease, property investments in development for lease, assets held for sale and development land.
Reversionary Yield
Is the anticipated yield, which the initial yield will rise to once the rent reaches the ERV and when the property is fully let. It is calculated by dividing the ERV by the valuation.
Roozen or Roozen Landgoederen Beheer
Means in relation to the LPM Joint Venture, Roozen Landgoederen Beheer B.V.
Second Joint Venture
Means VGP European Logistics 2 S.à r.l., the 50:50 joint venture between VGP and Allianz.
Third Joint Venture
Means VGP Park München Gmbh, the 50:50 joint venture between VGP and Allianz.
Weighted average term of financial debt
The weighted average term of financial debt is the sum of the current financial debt (loans and bonds) multiplied by the term remaining up to the final maturity of the respective loans and bonds divided by the total outstanding financial debt.
Weighted average term of the leases ("WAULT")
The weighted average term of leases is the sum of the (current rent and committed rent for each lease multiplied by the term remaining up to the final maturity of these leases) divided by the total current rent and committed rent of the portfolio
Weighted average yield
The sum of the contractual rent of a property portfolio to the acquisition price of such property portfolio.
Take-up
Letting of rental spaces to users in the rental market during a specific period.
STATEMENT ON THE INTERIM FINANCIAL REPORT
The undersigned declare that, to the best of their knowledge:
the condensed interim financial statements of VGP NV and its subsidiaries as of 30 June 2022 have been prepared in accordance with the International Financial Reporting Standards, and give a true and fair view of the consolidated assets and liabilities, financial position and consolidated results of the company and of its subsidiaries included in the consolidation for the six month period.
the interim financial management report, in all material respect, gives a true and fair view of all important events and significant transactions with related parties that have occurred in the first six month period and their effects on the interim financial statements, as well as an overview of the most significant risks and uncertainties we are confronted with for the remaining six months of the financial year.
Jan Van Geet Piet Van Geet Jan Van Geet s,r,o, Urraco BV CEO CFO
as permanent representative of as permanent representative of