VGP Trading Update: Growth and Diversification in Logistics Real Estate

VGP NV, a leading European provider of high-quality logistics and semi-industrial real estate, recently published its trading update for the first ten months of 2024. The update highlights the company's strong performance, driven by strategic land acquisitions, robust leasing activity, and a growing development pipeline. This article explores the key aspects of VGP's trading update and the implications for its future growth.

VGP's annualized committed leases have grown significantly, reaching €394.3 million as of October 2024, a 12.4% increase year-to-date. This growth can be attributed to the company's successful leasing strategy, with €64.9 million of new and renewed leases signed during the first ten months of the year. Notably, €19.2 million of these leases were signed in the past four months, demonstrating VGP's ability to maintain momentum in a competitive market.


The company's strong leasing performance is underpinned by a robust pipeline of pre-let projects. As of October 2024, 72.5% of assets under construction were pre-let, indicating a healthy demand for VGP's properties. Additionally, VGP has formally agreed terms on multiple new leases since 31 October 2024, amounting to over €16 million in rental income and increasing the annualised committed leases to above €410 million.

VGP's land acquisition strategy has been instrumental in driving growth and diversification. The company has acquired 699,000 sqm of new development land during the year, with 324,000 sqm acquired in the second half of 2024. This expansion has enabled VGP to initiate developments in high-demand areas, with 36 projects under construction representing 886,000 sqm. The pre-let ratio of these projects stands at 76.3%, indicating strong demand for VGP's developments.


VGP's trading update also highlights the company's solid treasury position, with enlarged revolving credit facilities and distributions from joint ventures expected to exceed €80 million in 2024. The company has successfully closed transactions with Deka and Areim, resulting in gross proceeds of €68 million and €489 million, respectively. Additionally, VGP has repaid €75 million and €3 million bonds at maturity and drawn down €135 million from a credit facility for its renewable energy business unit.

VGP's strong performance in the first ten months of 2024 underscores the company's strategic approach to land acquisition, development, and leasing. By focusing on strategic locations and high-quality properties, VGP has been able to attract high-quality tenants and maintain a virtually fully let property portfolio with occupancy at 99%. The company's commitment to renewable energy, with operational rooftop solar capacity increasing to 150.6 MWp, further enhances its appeal to environmentally conscious tenants.

In conclusion, VGP's trading update demonstrates the company's ability to drive growth and diversification in the logistics real estate sector. With a strong focus on strategic land acquisitions, robust leasing activity, and a growing development pipeline, VGP is well-positioned to capitalize on the increasing demand for high-quality logistics and semi-industrial real estate. As the company continues to expand its portfolio and explore new opportunities, investors should monitor VGP's progress closely to assess the potential for future growth and value creation.