CTP has reported a 92 percent rise in profit for the first nine months of 2021 to €317.8 million, compared with €165.8 million for the same period of 2020. The Company’s strong performance was driven by solid ongoing leasing take up, rental growth and record development valuations from accelerating yield compression in CTP’s core Central and Eastern European (‘CEE’) portfolio. The robust financial results are manifested in adjusted EPRA earnings per share year-to-date increasing to €0.38 in 2021 as compared with €0.29 for the same period in 2020. The Company has also invested significantly this year in boosting its talent base, attracting new people into senior management roles in-country teams and across group functions.
Remon Vos, CEO said: “CTP’s high-velocity operational performance continued apace during the third quarter, further propelled by strengthening logistics market fundamentals. This is clearly visible in the strong Q3 financial results. Since listing on Amsterdam Euronext in March, we are positioned to materially exceed one of our key IPO business plan targets and now expect to hit 10 million sqm GLA by next year – 12 months earlier than originally planned. We invested in recruiting new people across the organisation, thereby improving the strength and depth of our team. This complements the expanded landbank, ramped-up development programme and bigger investment portfolio, where we have strategically acquired 408,000 sqm of logistics properties across five countries this year. Yield-on-cost remained above our 10 percent target at 11.1 percent, which none of our major competitors come close to matching. CTP is powering ahead, and I believe the best is yet to come.”
Richard Wilkinson, CFO added: “The highlight for 2022 for CTP is clearly going be the integration of Deutsche Industrie REIT-AG into our portfolio and operations after the €800 million takeovers announced in October. CTP’s entry into the German market is being constructed on a portfolio that is ripe with value-add asset management and development potential. It brings strategic value and is being acquired at a price much lower than replacement cost, which will give us instant scale in Germany and provide a solid bridgehead between our core CEE markets and new opportunities across Western Europe.”
CTP continued to execute its strategy of building on the solid foundation that its investment portfolio provides and is delivering resilient income and sustainable value through its developments.
The Company’s market-leading portfolio increased to 7.1 million m2 GLA (30 June 2021: 6.6 million sqm) in Q3 as a result of development completions and strategic acquisitions. This expansion, together with continuing lease activity, resulted in the annualised rental income rising to €407 million (H1 2021: €380 million). Occupancy remained high and stable at 95 percent during Q3 2021, the same level as during the second quarter of this year. The portfolio continues to maintain an attractive income duration of 6.44 years (Q2 2021: 6.46 years) and rent collection remained high at 98 percent. CTP’s market share in its core CEE markets was 25.4 percent at the end of Q3 as compared to 24.9 percent in H1, measured by its share of total market GLA in the Czech Republic, Romania, Hungary, and Slovakia.
Some commercial highlights include
Czech Republic: the completion of a state of the art 68,000 sqm let to Loxxess for the e-commerce activities of a leading drugstore retailer.
Slovakia: 95,000 sqm is under construction.
Romania: the Company finished an 85,000 sqm mono-block building, handing it over to Kingfisher PLC on time and on budget.
Hungary: CTP Park Vesces (where construction started in the first quarter of 2021) is now fully pre-let and 83,000 sqm will be handed over in Q1 2022 to various tenants including JV Europe, the Korean logistics company.
CTP’s top 10 parks: grew 6 percent YTD to 3.3 million sqm GLA with a further 1.7 million m2 landbank adjacent.
Positive outlook remains
Market conditions remain favourable, with rental growth and yield compression accelerating in all of CTP’s core CEE markets, which will impact positively on the portfolio’s full-year valuation, the first to take place since listing in March this year. Company-specific adjusted EPRA EPS for the full year 2021 is reaffirmed to be circa €0.50. The Company’s portfolio of prime, highly sustainable assets is set to continue to benefit from the fundamental shifts occurring within the logistics and distribution real estate markets as well as the Company’s approach to portfolio optimisation. It has a substantial development pipeline and landbank. All of which, when combined with the Company’s high-quality loyal customer base and it is expanding talented and dedicated team, leave CTP well-positioned to execute on its clearly defined strategy and successfully deliver attractive, sustainable returns for all stakeholders
