P3 Group announced the results for the first half of 2022. The European long-term investor, manager and developer of warehouse properties reports strong growth of its net rental income by 11 percent to €169 million (+6 percent on like for like basis). Recurring EBITDA grew 10 percent to €143million, corresponding to a profit margin of 83 percent.
Since the start of the year, P3’s portfolio has increased by more than 9 percent, to a gross asset value (GAV) of €8.2 billion. While yields remained stable, most of the valuation increase was generated by rising rental levels, driven by continuous high demand, as evidenced by a record high occupancy level of 98 percent. The company‘s average re-leasing spread was also very high, at +9 percent.
Frank Pörschke, the CEO, commented: “Despite economic uncertainties, logistics remains well positioned with structural tailwinds, such as the continuing growth of e-commerce, and companies deciding to strengthen their supply chains. We see strong demand from tenants and in many markets rent levels have increased significantly. Right now, we see the future as more challenging, with rising interest rates, construction prices, yields and returns expectations. Supported by our shareholders, we are carefully managing our existing portfolio and are actively seeking attractive growth opportunities, be these developments, individual yielding assets, forward fundings, whole portfolios or even platforms.”
P3 is growing, both through developments and acquisitions and responding to the strong demand of the logistics industry. Two yielding acquisitions were closed during the first half of 2022, P3 Straubing in Germany, and P3 Deventer in the Netherlands, as well as one forward funding deal, P3 Assen in the Netherlands. Additionally, 300,000 sqm of new developments have been finalized during the year to date, and a further 300,000 sqm is currently under construction, with 47 percent of this space pre-let.
A milestone in 2022 has been the announcement and implementation in January of a new financing strategy. S&P Global Ratings assigned P3 a BBB credit rating with a stable outlook, and an EMTN bond program was established on the Luxembourg Stock Exchange. P3 made its bond market debut with a successful €1.0 billion senior unsecured Green Bonds issuance at attractive levels, with coupons of 0.875 percent in 4-year tenor and 1.625 percent in 7-year tenor. The Bonds were issued in line with P3’s new green financing framework, supporting the company’s overall Environmental, Social and Governance (ESG) strategy. The company has ample liquidity under the committed €750 million Revolving Credit Facility which was fully unutilized at the end of June. The Loan to Value metric was 44.5 percent at the end of June.
Thilo Kusch, CFO, commented: “P3 has a strong commitment to ESG in line with the needs of our customers, communities, and shareholder. During the first half of 2022, we made strides in progressing our ESG agenda, including – among others – BREEAM certification, LED installation programs across the portfolio and the implementation of a Green Lease Annex for new leases and renewals. We look forward to continuing to work with customers and local communities on achieving their ESG goals.”
P3 has an established plan for entrenching ESG within all levels of the business, including an ambition to reduce the greenhouse gas emissions of its operations and portfolio. During the first six months of 2022, LED usage across the portfolio grew from 56 percent to 77 percent. While 45 percent of the company’s portfolio was BREEAM-certified at the beginning of the year, this increased to 64 percent by the end of June. By year-end 2022, 75 percent of P3’s portfolio is targeted to meet recognized green building standards, with the goal of reaching at least the BREEAM “Excellent” standard or equivalent for all new developments, and at least BREEAM “Very Good” or equivalent for standing assets.