VGP FY24 Results in line, strong rental growth under-appreciated
VGP reported FY24 net profit of EUR 286.9m vs. 268.1m expected. Net Rent Renewable Income at 189.4.6m vs. 174.4m expected (JV at 50%). That is a 22% increase yoy. The realised gain on disposals amounted to 93m. FY24 completions at 584k sqm, but pipeline now amounts to 780k sqm, close to our estimate of 835k sqm. Pre-let amounts to 80%, that is a big increase from 70% at 1H24. This should reduce fears in the market that VGP increased speculative development or has trouble finding tenants. NTA rose 7.4% to 89.2/share. The cash recycling amounted to 809m. Gearing now stands at 33.6%. LTV improved from 53.4% to 48.3% as the new JV's have a lower LTV (35%). The initial Allianz JV's had an LTV% of 65% (1/3 banks). We do not agree with the current market appreciation of VGP and maintain a Buy recommendation. Conf. Call at 10h30 CET.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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