VGP: Third Quarter Trading Update 2013

Press Release
Regulated Information

Brussels 14 November 2013

Third Quarter Trading Update 2013

The encouraging increase in demand for new lettable space observed during the first half of 2013 gained momentum during the third quarter of 2013. VGP recorded a significant increase in demand,  not only in Germany where we are now firmly established, but also in most of our other parks i.e. especially in VGP's home market Czech Republic, in Estonia and in Romania.

On the back of these encouraging signs the development activities accelerated during the third quarter and 6 new projects were started up since the end of June 2013 representing 77,224 m² of lettable area.

During the third quarter the main focus of VGP's development pipeline has clearly shifted to Germany where the Group wants to accelerate the acquisition of development land, concentrating on the largest regional cities such as Berlin, Munich, Stuttgart, Düsseldorf and Frankfurt.

The strategy of VGP to focus on strategically located plots of land i.e. land always located in vicinity of urban centres to allow easy access to highways and ring roads and assuring availability of adequate workforce as well as the core competence in integrating operating processes of tenants, is clearly having a positive impact on the development activities of the Group with new buildings being developed or extended. Significant future projects of which several, large E-commerce oriented companies, are under negotiation.

VGP's activities can be summarised as follows:

• During Q3 2013, VGP continued to prepare the development pipeline for future growth. VGP acquired a 45,000 m² land plot in the Czech Republic. The Group has now in total 324,000 m² remaining land plots secured which are all located in Germany and of which 218,000 m² are expected to be acquired during Q4 2013. 

• In Germany VGP's new office located in Dusseldorf was opened during the summer and the German team was further expanded. 

• The annualised committed leases increased to EUR 7.4 million as at 30 September 2013 and to EUR 8.8 million following the conclusion of the purchase of a new 25,000 m² building in Germany. The annualised rent income in Germany (including this new building) now stands at EUR 1.8 million. 

• During the third quarter of 2013, VGP signed new annualised committed leases in excess of € 2.3 million in total of which € 1.3 million related to new or replacement leases (€ 0.6 million on behalf of associates) and € 1.0 million were related to renewals of existing lease contracts (€ 0.9 million on behalf of associates. 

• This brings the year to date signing of new lease contracts to € 8.5 million of which € 5.3 million relate to new or replacement leases (€ 3.1 million on behalf of associates) and € 3.2 million relate to renewals of existing lease contracts (€ 3.1 million on behalf of associates).  

• The Group's property portfolio reached an occupancy rate of 95.9% at the end of September 2013 (excluding the associates) compared to 94.4% at the end of June 2013. The occupancy rate of the associates' portfolio reached 95.3% at the end of September 2013, slightly higher than the 94.8% at the end of June 2013. 

• During the third quarter 1 building of 10,477 m² was delivered for VGP's own portfolio and during the month of October 2013 an additional building of 9,324 m² was delivered on behalf of the associates. 

• During the month of November 2013 VGP reached an agreement to acquire a fully let new 25,000 m² building located within its VGP Park Hamburg (Germany). The acquisition of the building is due to be concluded in December 2013 and provides VGP with immediate rent income in Germany as well as allows VGP to benefit from economies of scale from a commercial and development point of view. 

• The investment property portfolio (excluding the new building in Hamburg) currently consists of 8 completed buildings representing 98,934 m² of lettable area with another 11 buildings under construction representing 152,145 m² of lettable area. Besides this, through its associates, VGP partially owns another 57 buildings which represent 618,919 m² of lettable area and for which property and facility management services are provided by the VGP Group. 

• Besides this, VGP has also undertaken additional development activities on behalf of its associates by which it is currently also constructing 1 fully pre-let building representing a total future lettable area of 8,961 m². 

• The extraordinary shareholders' meeting of 27 September 2013 approved a further distribution of part of the historic realised valuation gains on its property portfolio by means of a € 7,623,150.50 capital reduction in cash. This distribution corresponds to € 0.41 per share. 

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