VGP NV: Broad-based Strength in New Leases Driving Record Development Pipeline

PRESS RELEASE Regulated Information

14 November 2019, 7:00am, Antwerp (Berchem), Belgium: VGP NV (‘VGP’ or ‘the Group’), a leading European provider of high-quality logistics and semi-industrial real estate, today published a trading update for the first ten months of 2019:

Robust operating performance driven by record new leases
- Strong leasing growth across the portfolio resulting in record €39.3 million net increase signed and renewed lease agreements, bringing total annualized rental income to €143.6 million (+37.9% year-to-date) and increasing the average lease term of the portfolio to 8.8 years (vs. 7.8 at Dec-18)
- A record of 34 projects under construction, representing 705,000 m2 or €37.3 million in additional annual rent once fully built and let. The portfolio under construction, including projects to be started up in the next six months is 75% pre-let
- 16 projects delivered in 2019 year-to-date representing 255,000 m2 (100% occupancy)
Replenished land bank to secure future growth
- Maintained pipeline through 2.50 million m2 of new land bought and a further 2.13 million m2 committed subject to permits
- Total land bank acquired and secured of 6.18 million m2 which supports 2.76 million m2 of future lettable area
Continued cash recycling and strengthening of funding base
- Successful first closing with VGP European Logistics 2 joint venture on 31 July allowed recycling of €96 million of gross cash proceeds
- Expect sixth closing for VGP European Logistics joint venture at the end of November 2019, with anticipated gross cash proceeds of circa € 130 million
Enhanced sustainability targets set for 2020 onwards with 100% of new developments to be BREEAM certified ‘Very Good’ or equivalent and emphasis on increasing renewable energy generation across the group

VGP’s Chief Executive Officer, Jan van Geet, said: “Across Europe competition for industrial space close to major population centres continues to thrive, mainly driven by e-commerce as their push for a wide delivery network with faster delivery is being rolled-out. This has resulted in continued strong demand for our parks whilst fueling our mostly pre-let construction pipeline. The investments made during the last few years – both in terms of land bank and organizational structure – have created this expanding opportunity to serve our clients and build shareholder value for the long run.”

Jan van Geet concluded: " At the same time, through our enhanced sustainability targets we are taking a new path towards sustainable construction and resource-conserving operations, as I believe business must play a leadership role in creating solutions that protect the environment and grow the economy together with the communities in which they operate."

OPERATING HIGHLIGHTS

Record new leases

Record signed and renewed rental income of € 42.5 million driven by €41.2 million of new leases (€3.3 million on behalf of the Joint Ventures1) and €1.3 million of renewals (€1.2 million on behalf of the Joint Ventures). During the year lease contracts for a total amount of € 1.6 million (€0.7 million on behalf of the Joint Ventures) were terminated
Annualized committed leases at the end of October 2019 (including joint ventures at 100%) increased to €143.6 million (vs €104.1 million at Dec-18) of which € 90.5 million related to the Joint Ventures
The signed new leases have a weighted average lease term of 10.8 years which has increased the average term of the combined own and Joint Ventures’ portfolio to 8.8 years2 (7.8 years at Dec-18)

Momentum in development activity with strong largely pre-let construction pipeline

Development of 34 projects under construction totaling 705,000 m2 of future lettable area and expected to generate € 37.3 million of new rent when fully built and leased
Of the construction activities, 41% is located in Germany – including over 100,000 m2 at VGP Park Munich, 47,000 m2 at VGP Park Berlin, 46,000 m2 at VGP Park Gottingen, 30,000 m2 at VGP Park Wustermark and 21,000 m2 at VGP Park Halle, 16% is located in Spain – including 45,000 m2 at VGP Park Llica d’Amunt, 39,000 m2 at VGP Park Valencia and 18,000 m2 at VGP Park Zaragoza, 15% is located in the Netherlands of which 64,000 m2 at VGP Park Nijmegen and 41,000 m2 at VGP Park Roosendaal, and 11% in the Czech Republic of which 56,000 m² in VGP Park Olomouc and 15,000 m² in VGP Park Prostejov.
The pre-let ratio of the portfolio under construction, including construction projects which are expected to be started up in the next six month, is currently 75% (the portfolio under construction today is 57% pre-let)3
Delivery of 16 projects during the first ten months of in total 255,000 m2 of lettable area – of which 40% in Germany and 30% in Spain – representing € 12.7 million of annualized committed leases; these buildings are 100% let

Land bank maintained

2.50 million m2 of land acquired YTD (of which 50% in Germany) bringing the total owned and secured land bank to 6.18 million m2 supporting 2.76 million m2 of future lettable area
A further 830,000 m2 of new land plots identified which are under exclusive negotiation and have a development potential of 397,000 m2 of future lettable area

Continued cash recycling and strengthening of funding base

On 31 July 2019, the initial transaction closing with Second Joint Venture i.e. VGP European Logistics 2, the second 50:50 joint venture between VGP and Allianz Real Estate, for an initial transaction value of € 175 million generated gross cash proceeds of circa € 96 million
At the end of November 2019, a sixth closing for First Joint Venture i.e. VGP European Logistics is expected to occur, with anticipated gross cash proceeds of circa € 130 million
Since 30 June 2019, VGP completed bilateral unsecured financing lines for a total of €58.5 million with several financial institutions and before the end of the year additional credit facilities are expected to be put in place

Enhanced sustainability targets set for 2020 onwards

As part of a comprehensive strategy to advance environmentally sustainable solutions for our tenants and our own operations, VGP has committed to obtain BREEAM ‘Very Good’ certificates for all our construction projects by 2020 onwards and to source renewable power from as many of our parks’ available resources as possible – starting with increasing investments into roof-fixed solar panels
This commitment builds on VGP’s efforts to advance sustainability in our business and operations in an effort to support our tenants and the communities in which we operate

CONTACT DETAILS FOR INVESTORS AND MEDIA ENQUIRIES

Martijn Vlutters (VP – Business Development & Investor Relations)	Tel: +32 (0)3 289 1433
Petra Vanclova (External Communications)	Tel: +42 0 602 262 107
Anette NachbarBrunswick Group	Tel: +49 152 288 10363

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements. Such statements reflect the current views of management regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. VGP is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release in light of new information, future events or otherwise. The information in this announcement does not constitute an offer to sell or an invitation to buy securities in VGP or an invitation or inducement to engage in any other investment activities. VGP disclaims any liability for statements made or published by third parties and does not undertake any obligation to correct inaccurate data, information, conclusions or opinions published by third parties in relation to this or any other press release issued by VGP.

ABOUT VGP

VGP is a leading pan-European developer, manager and owner of high-quality logistics and semi-industrial real estate. VGP operates a fully integrated business model with capabilities and longstanding expertise across the value chain. The company has a well-advanced development land bank of 7.0 million m² and the strategic focus is on the development of business parks. Founded in 1998 as a family-owned real estate developer in the Czech Republic, VGP with a staff of over 200 employees today owns and operates assets in 12 European countries directly and through VGP European Logistics, a joint venture with Allianz Real Estate. As of June 2019, the Gross Asset Value of VGP, including the joint venture at 100%, amounted to €2.2 billion and the company had a Net Asset Value (EPRA NAV) of €604 million. VGP is listed on Euronext Brussels and on the Prague Stock Exchange (ISIN: BE0003878957).

For more information, please visit: http://www.vgpparks.eu

1 Joint Ventures means either and each of (i) the First Joint Venture i.e. VGP European Logistics S.à r.l., the 50:50 joint venture between VGP and Allianz and (ii) the Second Joint Venture i.e. VGP European Logistics 2 S.à r.l., the 50:50 joint venture between VGP and Allianz

2 The weighted average lease term until first break is 8.3 years. The weighted average lease term of our own portfolio stands at 12.1 years (11.7 years until first break) and for the Joint Ventures’ portfolio at 7.0 years (6.4 years until first break)

3 The completed portfolio (incl Joint Ventures at 100%) has an occupancy ratio of 99.7%

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