VGP 4M23 First reaction, Cautious development, Not the JV News Show
VGP reported its 4m update on the day of its München Site visit. The new developments remain relatively slow at 114k sqm, but completions track in line with our expectations at 264k sqm. The pipeline stands at 664k, in line with our 1H23 estimate of 714k sqm. VGP remains vigilant on occupancy with high pre-let levels of 93.4% in their pipeline. The statement gave no further details on the expected JV announcements. These are projected to be announced by the 1H23 results. We do not see the urgency of these announcements, but the market has been anticipating positive news on recycling capital for further growth. VGP is however well capitalized after a 1bn debt issue and 300m capital increase. Total current GRI now amounts to 99.3m for its own portfolio and 166.7m for the JV's. VGP can pay its proposed 2.75 dividend from its cash returns. We believe that logistic developers will continue to benefit from trends like near-shoring, ESG and e-commerce (CEE). We expect JV closings for 500m this year. Today VGP hosts its site visit in Munich with a presentations for analysts and investors.VGP NV is a Belgium-based real estate development company that constructs and develops industrial real estate and ancillary offices, which are rented out to clients on long term lease contracts. The Company operates in three business segments: the Development activities segment is focused on the identification and acquisition of the land and development of the infrastructure, the design of buildings, the coordination of architectural and engineering aspects, the administration to obtain the necessary permits, the tendering and coordination of the construction works, including site management, and the facility management of the real estate portfolio; the Property Management and Leasing services segment is responsible for managing the operation of the buildings, and the Facilities Management services segment is responsible for managing the operation of the buildings and performs all actions, such as maintenance services, waste management services and maintenance greenery, among others.
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