P3 Logistic Parks concluded the first half of this year with transactions for over 107,000 sqm. These results demonstrate the company’s ongoing commitment to providing its partners with high-quality spaces and rental services tailored to their specific needs.
P3 has also strengthened its relationships with existing customers, recording a significant contract renewal rate in the first half of the year. In fact, 93 percent of rental requests came from long-term partners, who not only chose to renew existing contracts (68,000 sqm) but also to expand their rented spaces (32,000 sqm). Among the companies with which P3 has signed renewals and contract extensions in the first half of the year are HOPI®, Logistic E Van Wijk, and SLS Cargo.
An important aspect of P3’s performance during this period is the attraction of a new type of customer, namely the light manufacturing segment, taking advantage of the existing strength within the park.
Cristina Pop, Head of Asset Management P3 România, says: “We are extremely pleased with the results achieved in the first half of this year, which confirm our constant efforts to provide solutions tailored to each customer’s requirements. From a strategic perspective, we are long-term investors; therefore, the performance of the current portfolio is largely influenced by our customer-centric approach. We are committed to further developing strong collaborations and remaining a trusted partner in the logistics, industrial space, and now, light manufacturing sectors.”
Considering the challenges posed by rising utility costs, the developer has continued to prioritize energy efficiency and sustainability measures for all buildings within the P3 Bucharest A1 Park. As a result, all warehouses are now BREEAM Very Good certified and equipped with LED lighting and solar panels.
As per P3 Group S.àr.l, its portfolio increased by more than 380,000 sqm to a total of 7.9 million sqm GLA in the reporting period, driven by acquisitions and completed developments and like-for-like occupancy remained very strong at 98 percent. Approximately 60 percent of the asset base is in Western Europe, with 40 percent in Central and Eastern Europe, spanning 11 countries. After the period ended, P3 entered the UK market where it now has two logistics assets under management.
Net operating income increased 21 percent to €205 million, driven by the increased portfolio. On a like-for-like basis, net operating income growth was 7 percent, thanks to the indexation of in-place leases and strong re-leasing spreads. The new effective rents have been 24 percent higher on average when compared to prior leases on the same space. EBITDA margin improved further to 84.5 percent, driven by portfolio growth, strong re-leasing spreads, and a focus on efficient processes.
Elevated return demands continue to impact real estate valuations, but in the logistics sector, the significant rise in rents has, largely, counterbalanced this effect. As a result, P3 saw a comparatively low decline in valuation on a like-for-like basis, of 2.3 percent in the first half of the year. Including net investments, P3’s GAV remained stable through the first half of 2023, at €8.3 billion.
Two yielding acquisitions were closed during the first half of 2023, Campus 39 in Poland and Atlantic One in Germany, adding about 216,000 sqm of space to the portfolio. Additionally, approximately 168,000 sqm of new developments have been finalized during the first half of the year, and construction started for further c. 213,000 sqm GLA.
Frank Pörschke, P3 CEO, commented: “As we all know, the global economic environment poses challenges in 2023, but for the real estate logistics market, structural tailwinds remain in place and demand is still strong. Based on our strong operational and financial performance, we have conviction that P3 is well placed to capitalise on market opportunities. With the long-term strategic ownership of GIC, combined with our strong in-house operating platform, we have the capability and capital to continue our successful profitable growth path.”