Warehouses De Pauw 1Q24 Results, pro-active hedging lowers cost of debt

GRI 1Q24 came slightly above our expectation, but the EPRA EPS was bang in line. A remarkable metric is the decline in Cost of Debt from 1.9% to 1.7% against a backdrop of rising interest rates. WDP “over-hedged” its debt in anticipation of its investment program and raised capital. WDP repeated the FY24 EPRA EPS guidance of 1.47, slightly above our 1.46 expectation. The 5% expected yoy growth is impressive as WDP issued 5.9% new shares last November. Expired contracts (100k Sqm GLA) were reviewed with 15% uplift (under-rented). WDP recently presented its “Blend27” strategy with a guidance of 1.70 EPRA EPS by FY27. It will spend up to 1.5bn Capex. A lot of additional growth has to come from acquisitions and developments from the land bank. Their access to relative cheap funding is a clear advantage vs. competitors. We believe their premium to NTA is more than justified.