Among the projects that the developer has been working on locally during this period is the completion of the accommodation spaces in Bucharest A1 Park, which completes the series of additional facilities in the park. Also, as part of the development strategy in Romania, P3 inaugurates a new business segment, urban logistics. This year, P3 acquired a plot of land of about 4 hectares in the eastern part of Bucharest, inside the ring road, where it intends to develop a warehouse of 18,000 m2.
Sînziana Pardhan, Managing Director P3 in Romania, says: “We can say that so far, 2022 has been a very good year in terms of market dynamics. The logistics companies continue to have the largest share in our discussions with customers, followed by retailers and distributors. Although we didn’t see a negative impact on the volume of transactions, we do see concerns from our customers about the coming year, given the impact of general price increases on purchasing power. Given the rising cost of utilities, we will continue to prioritize investment in energy efficiency and sustainability measures across our portfolio, after receiving the BREEAM-In-Use Very Good standard for all existing logistics buildings within P3 Bucharest A1 last year.”
S1 2022 results for P3 Group S.àr.l: Strong operational and financial performance despite macroeconomic volatility
At P3 Group S.àr.l level, net rental income increased in the first half of the year by 11% to EUR 169 million. Recurring EBITDA increased by 10% to EUR 143 million, corresponding to a profit margin of 83%. Since the beginning of the year, the P3 portfolio has grown by more than 9% to a gross asset value (GAV) of €8.2 billion. While yields have remained stable, most of the increase in value has been generated by rising rental levels, driven by continued high demand, as evidenced by record occupancy levels of 98%. The average rental growth margin for new contracts was also very high at +9%.
Frank Pörschke, 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 shareholder, we are carefully managing our existing portfolio and are actively seeking attractive growth opportunities, be it new developments, acquisitions of existing assets, forward funding transactions or acquisitions of entire 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 m² of new developments have been finalized during the year to date, and a further 300,000 m² is currently under construction, with 47% 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 stable outlook, and an EMTN bond program was established on the Luxembourg Stock Exchange. P3 made its successful debut in the bond market with an issue of €1 billion of highly successful senior unsecured green bonds at attractive levels with coupons of 0.875% over 4 years and 1.625% over 7 years. 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 in the end of June. The Loan to Value metric was 44.5% at the end of June.
Thilo Kusch, CFO, comments: “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% to 77%. While 45% of the company’s portfolio was BREEAM-certified at the beginning of the year, this increased to 64% by the end of June. By year end 2022, 75% 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.
