VGP NV: Publishes First Quarter 2020 Trading Update and Announces Plans for New Partnership with Allianz for VGP Park Münche...
16 Abril 2020 - 2:00AM
VGP NV: Publishes First Quarter 2020 Trading Update and Announces
Plans for New Partnership with Allianz for VGP Park München
PRESS RELEASE Regulated Information
16 April 2020, 7:00am, Antwerp
(Berchem), Belgium: VGP NV (‘VGP’ or ‘the Group’), a
leading European provider of high-quality logistics and
semi-industrial real estate, today published a trading update for
the first quarter of 2020:
- Impact of Covid-19
- Our primary focus is the health, safety and well-being of our
employees and partners
- The VGP team is operational, mostly working from home, with
full access to systems. Where allowed, our construction sites are
fully operational
- Until now the impact on rental payments is very limited: nearly
all due payments were received on time. Some selective reprofiling
discussions ongoing but it is probably too early to assess the
whole impact of the respective measures taken to contain the spread
of the virus on our tenants
- All pre-let development projects have now been resumed with
minimal timing impact of temporary suspensions; speculative
developments remain frozen where possible
- Focus on maintaining a strong capital position – VGP is well
capitalized with significant cash headroom (including unutilised
3-year RCF of €150 million)
- Operating model remains intact and business fully operational:
- Total annualized rental income increased to €159.9 million
(+5.0 million year-to-date)
- 37 projects under construction, representing 865,000 m2 or
€54.4 million in additional annual rent once fully built and let
(72% pre-let)
- 4 projects delivered during the 1st quarter, representing
54,000 m2 (100% occupancy)
- Land bank replenished – 0.56 million m2 of new land
bought
- Signed letter of intent with Allianz in respect of new JV for
development of VGP Park München
- Agreement in principle to launch new 50:50 JV in H1 2020
- This will be the first JV to also cover the development of a
VGP park – VGP will forward sell VGP Park München to the new JV and
recognize the majority of development profit at the moment of
entering the JV, with sales proceeds being received at the moment
of delivery of the respective buildings
- Upon entering the JV, VGP is expected to receive the pro-rata
share of development expenses until that date; all further future
funding needs will be financed jointly
VGP’s Chief Executive Officer, Jan Van
Geet, said: “Our primary focus today is the health and
safety of employees and partners, yet due to the agility of our
teams and operating model acting as inhouse contractor, our pre-let
development pipeline is running nearly entirely on
schedule.”
Jan Van Geet continued: "Whilst it was initially
our intention to develop and hold the iconic VGP Park München on
our own balance sheet, Allianz and VGP have found an agreement to
develop this project together, acting as true partners – also in
today’s exceptional market circumstances.”
Jan Van Geet concluded: “Combined with a full
order book, a diversified and quality tenant portfolio across a
broad range of industry segments and strong balance sheet I hope
and believe we are well placed to weather the current storm.”
VGP CONCLUDES AGREEMENT IN PRINCIPLE WITH ALLIANZ TO SET
UP A NEW JOINT VENTURE IN RESPECT OF VGP PARK MÜNCHEN
- During the month of March 2020, VGP and Allianz reached an
agreement to enter into a new 50:50 joint venture in respect of VGP
Park München
- Contrary to the two existing joint ventures which concentrate
on the acquisition of income generating assets developed by VGP,
this new joint venture will therefore initially be focussed on the
development of VGP Park München. The initial term of the joint
venture will be for 10 years with the possibility of a 5+5 year
extension
- The transaction will be structured as a forward sale whereby
VGP will recognise the majority of the development gain at the
moment of entering the JV, with the sales proceeds being received
at the moment of delivery of the respective buildings based on
pre-agreed market yields
- Upon entering into the joint venture, VGP will receive initial
cash proceeds to cover the pro-rata share of the development
expenses until that date
- All future funding requirements related to the remaining
construction activities will be carried jointly by the joint
venture partners based on their pro-rata share
- Once fully developed the park will consist of five logistic
buildings, two standalone parking houses and one stand-alone office
building for a total gross lettable area of approx. 270,000 m2. The
entire park is pre-let to KraussMaffei Technologies and BMW (except
for some residual 13,500 m2 of lettable area which is currently
under negotiation with BMW). The total annual rent income will
amount to approximately € 29.2 million when fully built and
let
- There are currently already 3 buildings and 2 parking houses
under construction, with the completion of the first building for
BMW, expected to occur in August 2020 and the other buildings to be
delivered to KraussMaffei by November 2022. The last building of
38,000 m² could be delivered by the beginning of 2026, subject to
some options held by KraussMaffei
- The managerial and governance setup of the new partnership is
similar to the existing two joint ventures with VGP serving the new
joint venture as its sole asset, property and development
manager. On behalf of Allianz group companies the joint
venture is managed by Allianz Real Estate
- The transaction is subject to satisfactory due diligence and is
expected to be completed during the first half of 2020
OPERATING HIGHLIGHTS 1Q 2020
Lease operations
- Signed and renewed rental income of € 7.6 million driven by
€5.9 million of new leases (€2.7 million on behalf of the Joint
Ventures1) and €1.7 million of renewals (all on behalf of the Joint
Ventures). Lease agreements in the amount of € 0.9 million were
terminated
- Annualized committed leases at March 2020 (including Joint
Ventures at 100%) of €159.9 million (vs €155.0 million at Dec-19)
of which € 104.0 million related to the Joint
Ventures
- Whilst it is too early to assess the impact of the current
crisis on our tenant base, due to the current exceptional
circumstances we are working across the Group, on a case by case
basis, with some selective tenants regarding appropriate
relief
Development activities
- Development of 37 projects under construction totalling 865,000
m2 of future lettable area and expected to generate € 54.4 million
of new rent when fully built and leased (72% pre-let)
- Geographical split of parks under construction: 50% is located
in Germany, 13% Spain, 12% the Netherlands, 9% Czech Republic, 8%
Romania, 3% Italy, 2% Hungary and 2% Slovakia
- Apart from some temporary suspensions all our pre-let
development projects have now been resumed with minimal impact on
project timelines; speculative development projects have been
frozen where possible
- Delivery of 3 projects during the first quarter of in total
54,000 m2 of lettable area representing € 2.5 million of annualized
committed leases; these buildings are 100% let
Land bank
- 0.56 million m2 of land acquired during the first quarter of
2020 (of which 0.37 million m2 in Czech Republic) bringing the
total owned and secured land bank to 6.67 million m2 supporting
3.03 million m2 of future lettable area
- A further 1.97 million m2 of land plots identified which are
under exclusive negotiation and have a development potential of
0.99 million m2 of future lettable area
Sound liquidity and capital position
- The Group has adequate cash buffers in its Joint Ventures’
portfolio’s and the Group expects that it will be able to retain
its sound liquidity position for the foreseeable future through the
anticipated closings with the Joint Ventures currently planned at
the end of July 2020 and November 2020 supported with an unutilised
3-year revolving credit facility totalling €150 million
- The Group believes that it is important to maintain a strong
capital position and continually evaluates its capital markets
options to finance the investment pipeline and any opportunistic
investment opportunities as they arise. Whilst we are very careful
and highly selective in making new investment decisions during the
current exceptional market circumstances, we are conscious the
current environment may also provide unique opportunities for
growth which we continue to monitor closely
- Proposal to pay €60.4 million dividend reconfirmed, with
payment date in 2020 calendar year (exact date to be confirmed by
shareholders at the AGM scheduled for 8 May 2020)
CONTACT DETAILS FOR INVESTORS AND MEDIA
ENQUIRIES
Martijn Vlutters (VP – Business Development & Investor
Relations) |
Tel: +32 (0)3 289 1433 |
Petra Vanclova (External Communications) |
Tel: +42 0 602 262 107 |
Anette NachbarBrunswick Group |
Tel: +49 152 288 10363 |
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 in light
of 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.
ABOUT VGP
VGP is a leading 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 6.67 million m2 and
the strategic focus is on the development of business parks.
Founded in 1998 as a family-owned real estate developer in the
Czech Republic, VGP with a staff of circa 220 employees today owns
and operates assets in 12 European countries directly and through
VGP European Logistics and VGP European Logistics 2, both joint
ventures with Allianz Real Estate. As of December 2019, the Gross
Asset Value of VGP, including the joint ventures at 100%, amounted
to €2.77 billion and the company had a Net Asset Value (EPRA NAV)
of €741 million. VGP is listed on Euronext Brussels and on the
Prague Stock Exchange (ISIN: BE0003878957)
For more information, please visit:
http://www.vgpparks.eu
1 Joint Ventures means either and each of (i)
the First Joint Venture i.e. VGP European Logistics S.à r.l.,
the 50:50 joint venture between VGP and Allianz and (ii) the Second
Joint Venture i.e. VGP European Logistics 2 S.à r.l., the
50:50 joint venture between VGP and Allianz
- VGP - Trading update - April 2020 (EN)
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