Warehouses De Pauw Conference Call Feed-Back

Comments we noted down from the call at 10h00 :
• New land acquisitions took place with a large plot in Romania 35 EUR/sqm that will give a growth potential over next couple of years. This is 1 big site of 300k sqm GLA potential on a strong strategic location (no more details given). The company targets 9% Yld/cost for these developments. The company targets 9% Yld/cost for these developments.
• The land bank is now split 50/50 Romania vs. Western Europe.
• On 3Q23 development starts of 28m, company sticks to the FY guidance of 200-250m new development starts.
• Rent demands from tenants remain strong, although not as strong as a year ago, with at that time demand for 120% occupancy, now a more balanced situation.
• Construction costs are improving, but they are still above the pre-pandemic situation, Co does not expect them to come down to the pre-pandemic level.
• Portfolio is 8% under-rented, the company calculates the 7% yld/cost for new contracts at the NIY%. The company expect its collected rent for revisions also to close the gap to ERV.
• WDP follows the M&A market for opportunities and mentions Germany as an interesting area for investments.
• On the marginal funding costs, company points to Euribor 4% bps, depending on duration (unsecured)
• WDP believes that the M&A will slowly start up over time as eventually interest rates will stabilise and sellers have adjusted their expectations.