MLP Group has a very good financial standing and a safe capital structure enabling the implementation of long-term strategic goals. This is confirmed by its reported 2022 performance figures. The Group’s Net Assets Value (NAV) went up 37 percent, to just under PLN 2.5 billion (€532.6 million). The value of its investment properties rose 31 percent, to more than PLN 4.4 billion (€945 million). Consolidated revenue improved 39 percent y-o-y, to PLN 279.1 million (€59.5 million), driven by an increase in the leased area combined with higher rental rates. Rental income from investment properties increased by 31 percent, to PLN 152.9 million. At the same time, the Group’s EBITDA (without revaluation of investment properties) improved by 47 percent, to PLN 135.1 million (€28.8 million). Last year, MLP Group earned PLN 422.4 million (€90.1 million) in net profit.
Strong lease results in 2022
MLP Group is developing its operations in Poland, Germany, Austria and Romania. The Group’s existing portfolio comprises 21 logistics parks. Its strategic goal remains to expand the warehouse portfolio by developing big-box facilities and urban logistics projects.
In 2022, MLP Group signed leases for 235,000 sqm of space. New completions with a total area of 226 thousand sqm were located mainly in Poland and Germany. At the end of last year, the Group had a total of 1 million sqm of built space, with a further 119,000 sqm under development or in the pipeline. The development potential of the Group’s existing landbank is close to 1.8 million sqm. In addition, the Group has reservation agreements to purchase new plots with an area of some 200 hectares, allowing it to develop another 1 million or so sqm of new space.
Ambitious plans for 2023
High occupier demand for warehouse space across all markets where MLP Group operates is driven mainly by the trend of near-shoring, continuing e-commerce demand and restructuring of supply chains. Other key drivers of demand for logistic space include low availability of vacant space and no signs that supply and demand will come into equilibrium in the short term. Rents are likely to continue the growth course.
The Group intends to continue its strong development in Germany. It plans to strengthen and expand its presence in new key locations, but also in the regions it already presents, i.e. the Ruhr area, Brandenburg and Hessen land. It also expects to strengthen its foothold on the Austrian market and is looking to enter the Benelux countries soon. The Polish market remains crucial and MLP Group will continuously increase offers in key logistics regions. According to the strategy, capital expenditure (CAPEX) in 2023 will amount to about €215 million, of which about 30 percent will be allocated to the purchase of new plots. This year the level of commercialisation is planned to go up by about 20 percent.
“We continue to see robust occupier demand combined with market vacancies close to historic lows in supply-constrained markets, We expect this contrast between positive demand and limited supply to drive further growth in rental levels. In 2022, we have leased 235 thousand sqm. Our total portfolio reached 1 064 million sqm with 98 percent occupancy across all our assets and new space under development amounts to 119 thousand sqm. In 2022, we successfully continued our efforts to diversify our assets (Big-box logistic and Urban Logistic), tenants and geographies. Further development in the German market is a key point of our strategy.
In 2023, we launch new projects in Germany, Austria and Romania, we are not slowing down our development in Poland. Tenants from the light industry and logistics sector were the largest tenants of our space in 2022. We expect this trend to continue – tenants from the light manufacturing and nearshoring sector will be the main source of lease agreements in 2023,” said Radosław T. Krochta, President & CEO of MLP Group
Excellent financial standing
Considering the current geopolitical situation and high volatility in the economy, MLP Group is very well prepared for the current challenges. Proceeds of the latest share issue amounted to PLN 183.5 million.
“100 percent lease agreements indexed with CPI for euro without any cap (indexed once a year in February). All rentals are denominated in euros or are directly expressed in euros, which significantly reduces our exposure to currency risk. MLP Group has a very good financial standing and a safe capital structure enabling the implementation of long-term strategic goals. With the modest leverage (LTV at 33.1 percent), long-average debt maturity of 5.1 years, no near-term refinancing requirements and virtually entire debt at fixed or capped rates, we have the significant financial flexibility to continue to invest capital in the development and acquisition opportunities that offer the most attractive risk-adjusted returns,” added Radosław T. Krochta.
MLP Group also maintains a strong cash-flow position. LTV (loan-to-value) last year was at 33.1 percent, with the highest interest coverage ratio at 3.3x ICR. The Group had a long debt maturity ratio of 5.1 years. FFO (funds from operations) amounted to PLN 86.8 million (€18.5 million), an increase of 59 percent y-o-y.
In keeping with its build & hold strategy, MLP Group retains completed logistics parks in its portfolio and manages them. All projects undertaken by MLP Group are distinguished by very attractive locations of the logistics parks, application of built-to-suit solutions, and support given to tenants during the lease term.
