VGP - Pipeline and own portfolio yield compression VGP BB
VGP already announced a trading update on 6th of January on which we reviewed our model. Yesterday morning VGP reported the hiring of a representative in Greece and it surprised with a Net Profit update for FY21. The estimated range now amounts to € 630m – € 650m vs. our expected net profit of € 497m. The bulk of the net profit surprise is explained by yield compression (which we do not estimate for future results). We estimate the impact at € 180m on EBIT level. These gains are an indication that industry experts still consider the logistic market as very tight. We have adjusted our FY21 Net Profit exp. to € 638m and explain the changes in this note. We do not model further yield compression in our model, but have increased our development margins going forward. The impact on our DCF (Page 4) amounts to € 15 to € 265. We maintain an Accumulate rating. Full results: 28th of February.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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