VGP NV (VGP) Earnings Call Transcript & Summary

Hello, and welcome to the VGP Half Year 2024 Financial Results. My name is Laura, and I will be your coordinator for today's event. [Operator Instructions] Today, we have the CEO, Jan Van Geet; joined by CFO, Piet Van Geet; and VP, Martijn Vlutters, as our presenters. I will now hand you over to your host, Jan Van Geet, to begin today's conference. Thank you.

Yes. Good morning to everybody, and welcome to our webcast on the occasion of our half year financial results, a publication thereof. I will just immediately go to the first slide, the highlights of the first half year. The picture you are seeing is actually something which I would like to talk a little bit about. It's our -- at the occasion last year when we bought a big part of the Opel facility in Russelsheim, right next to Frankfurt Airport, very close to Frankfurt Airport. We also have now made an agreement with Opel, wherein we are going to -- what has been announced on the 8th of June, on the occasion of 125 years of Opel in Russelsheim. We are going to build for them the green campus, which you will see here visualized on the map. So I just wanted to mention that. The highlights in the first half of '24 are a pretax profit of EUR 154.6 million, and it's an increase of 218% versus last year. There is EUR 45.6 million worth of signed and renewed lease agreements during the first half of '24 and this brings the total committed annualized rental income to almost EUR 385 million. Meanwhile, it's already over EUR 390 million. So that was an increase of 9.7% year-to-date at that moment. So now it's more than 10% and that includes a record EUR 28.7 million of new lease agreements signed, and that's an increase of 47% versus last year. We have 835,000 square meters under construction at the moment, 34 projects, which represent EUR 56.8 million additional annual rent once fully built and let and we've meanwhile, started up a number of new projects, which have been pre-let mostly and in various other countries in which we will then see, they have started after the 30th of June of this year. We have a land bank of 8.5 million square meters, which represent a development potential of roughly 4 million square meter. After the acquisition of 375,000 square meter of new development land and after the sale of our stake in the Development Joint Venture, which we had in Magdeburg, in which we have sold 100% in the beginning in the first half of this year. Our gross renewable income increased a lot by 31% to EUR 3.8 million despite a significant fall in energy prices and that's driven by the increase of our photovoltaic capacity with 115% year-on-year and our operational capacity because it always takes a little bit of time before it's connected to the grid, is now 143.3 megawatt versus 66.6% last year in June. We have a very solid balance sheet at the moment with the total cash available of EUR 625 million. We have also EUR 400 million of undrawn credit facilities available. And the gearing ratio reduced from 40.3% to 32.7%, and we also had a closing with Deka, which just happened this month, which brought in another EUR 68 million of net cash, which was effectuated in August. So the net cash recycling of EUR 662 million this year as a result of closing with Deka and Areim. And if you look overall, the closings since 2022, the year when everybody said Allianz is gone. We have done -- we have recycled more than EUR 1.7 billion in effective cash proceeds out of new joint ventures and existing joint ventures, which we have. After the balance sheet, we repaid EUR 75 million of bond debt that was due in July '24, and we lowered just the cost of our debt from 2.25% in the first half to 2.21%, following the repayment. I will go a little bit over the market update because I find it -- we have had a very successful year this far in signing leases. There is a lot of questions about the market. We're very confident on the second half year or I am very confident on the second half year. I'm a very -- I believe that we were going to close the year well over EUR 400 million of contracted annualized rental income. And you can see the demand, which has been fueled during the pandemic year, a lot by e-commerce, which has virtually now a little bit gone out of the market, has returned to stabilized prepandemic levels. And we find it still a very healthy occupational market while there is still a lot of demand. You can see it also, we signed EUR 28.7 million of rental income. The occupier segment for us, speaking for VGP, you see it's a lot of third-party logistics, which are the main driver of the occupier groups. But for us, certainly, manufacturing has been a very big uptake and you will see it later in the presentation. I have some examples. The vacancy rates, they edge up. It's now approximately 5%. We are more than 99% let on our existing portfolio and I think it's going to remain like that for the remainder of the year. We have no big switches coming up. There is no signs of anybody leaving. So I think, we, for the remainder of the year, remain very well led. And it's mostly older stock, which is a little bit getting vacant. But I think it's also healthier that there is a little bit vacancy on the market and that we can start seeing a little bit of growth again going forward in new leases. The supply -- on the supply, what we now see is that the speculative part of supply is coming down. It's -- from 43% in '22, it's now only 36%. Where we think it's going to go next, and we have the same view as [indiscernible], that is there is more intense land regulation. Their construction costs have come down a lot, but it's really the ESG requirements, which are now put on the buildings, make them more difficult, more expensive to build. And we think that the development pipelines will remain a little bit restricted. So there is a healthy margin for us going ahead in our construction. With a very good land bank, which we have, we think we have a nice future in front of us. So the logistic prime rents have pulled down a little bit. We still see an increase in many of the markets. To give you an idea, what we have relet this year is 8% higher -- 8.6% higher than the leases which we had before. So our rental price has -- there is rental growth, it has gone up. But we see it's -- in some markets, it's decreasing a little bit. And in a lot of other markets, it's getting more stable. On the capital markets, we have done quite some portfolio deals and we are seeing that there is a higher appetite coming back between the investors. We are talking to many people in -- about our joint ventures and our existing joint venture partners have all expressed. We also plan next closing with our Areim portfolio in the second half of this year or maybe early next year. But we see still a lot of appetite on the market coming back also and especially for our buildings, which we have in our portfolio. On the leasing activities, the building you are seeing on the screen is in Valencia and Cheste with a big racing track behind it. That building has been leased now fully to Jysk, the DANISCHES BETTENLAGER company. So as I already said, it's increased by 10% year-to-date, more than 10% now with a record of EUR 28.7 million of new leases during the first 6 months. We have 565 tenant contracts with 396 tenants. So there is a lot of tenants which have repetitive buildings with us, which have more than one lease agreement or many lease agreements. The committed annualized leases amount to EUR 385 million. At the year end, it was EUR 351 million. As I already said, the occupancy rate is 99% and that is stable. And my brother likes to make bridges everywhere. So there is also a bridge of the committed annualized rental income. There you can see that the new leases account for EUR 28.7 million, there was EUR 7.7 million of indexations and we had EUR 0.6 million of amendments to existing lease agreements, people who wanted to have some extra space, which we have fitted out. We had EUR 3.1 million of terminations. And then we come to EUR 385 million roughly of committed annualized rental income at the first -- at the end of the first half, which is now already more than EUR 390 million. I've been preparing our company, and I speak to most of the investors -- co-investors inside of VGP. I've been preparing our company a lot to be able to accommodate for our customers to do relatively complex projects in a simple way. So more than 70% of our -- or 70% of our employees today are engineers and they're qualified to do things which are more and more intense in robotization and automatization and we really want to take away all the solos which you can have around the building, which is complex regulations and building permits, et cetera. And as a result, you can see we have, in these markets, also a lot of light industrial clients. This doesn't mean that these are bespoke buildings. They are all normal standardized buildings. But the inside, of course, we try to integrate and to accommodate our customers as much as we can by helping them to fit it out. Now there is a couple of examples which we have here of the nicest lease agreements, which we have signed. Mutti, I'm sure most of you know, the tomato cans out of Parma. We have leased a 50,000 square meter to them in Parma. It's under construction now. We just started the construction. Hyundai Mobis, it's a battery plant, which we are building for them in Pamplona. You will see a picture of it later on. [indiscernible], it's a concurrent to Elon Musk's SpaceX company. They are going to launch the rocket now into space from Norway later this year to do -- how you call it, satellites -- to place satellites in the orbit. One of their investors is also the NATO, which has just jumped inside of the capital round. Verne, it's a fantastic new project around automotive driving. So Robotaxis, which we are doing together with the [indiscernible] Group. Huayu Glass is a supplier for Mercedes Glass in Kecskemet in Hungary. And VAT, it's vacuum valves, a very nice new plant, which we're building for VAT. All of these are very long-term lease agreements and made a very strong covenant on top. Our portfolio is also leased long term. It's still 7.8 years. I have the feeling that every time I do a presentation, it's 7.8 years. But it's also a sign that we are signing on every year, a lot of new lease agreements with long-term leases, which is for us the main part. And it's very well spread. The risk is very well spread. You can see 43% is pure logistics. E-commerce is about 19% and the light industry is 37%. We see e-commerce coming back from next year on or maybe the year after. We see them now filling up all the gaps they left empty in our portfolio. When we lease to them, the first one to sublease, but we see now that they are really taking up the space and really starting to use it. So we are very confident that once, at a certain point in time, they are going to come back with new growth profiles, and it will be sooner rather than later, I think. Our top 10 tenants have 30% of the committed leases. It used to be a lot more. They have a combined WAULT of 9.9 years. And the top 10 tenants is 23 different lease agreements. So it's also there. We have them -- it's not all concentrated in 1 or 2 buildings. It's mostly more than 2 leases. Another bridge, and this is a very nice one. This is our activated rental income. So rental agreements, which really generate rental income already, which have been delivered to our customers and for which they are paying rent. At the end of last year, we had EUR 304.3 million on a 100% basis of net rental income activated out of which EUR 80.8 million was in our own portfolio and EUR 223.4 million was in the joint ventures. We added EUR 22.9 million. That's the things which we have delivered this year and which have started paying rent. So that comes to EUR 327.2 million in June 2024. There is another 57.5 million leases, which are going to be activated in the next 6 to 12 months, which are under construction, maybe a little bit longer. And that brings the total to what we have contracted now, EUR 385 million. It's a little bit more already, as I said. And what is really nice about it, if you look at it, EUR 109.8 million sits in our own portfolio, EUR 275 million meanwhile in the joint ventures. But on a proportional basis, we have a EUR 250 million annualized rental income. And our income is getting more and more recurrent if you look at it, which is -- it's very cash generative at the moment. Our net rental and renewable energy income grew with 20.2% year-on-year. As Martijn already said or as Martijn told me, the energy prices have come down a lot. Despite that, it's grown steadily. You can see the rental income also in the first half year, including -- I mean, including the energy, the rental income has gone up 20% and it's now EUR 91 million of net rental and renewable energy income on a look-through basis. Our portfolio virtually [ LatAm ] on a long-term basis. As I already said, you see here the 10 biggest customers. Maybe just to give you an idea, between these 10 biggest, it's also -- you can also see Opel and Siemens, both are brownfields, which we bought. Both do a sale and leaseback operation for a couple of years, which allows us to, in the meantime, get all of our permits ready and to do the next step. Both of them will generate -- both of these sites should generate a lot more rental income than they do today because the rental prices which we negotiated on the old buildings are really very low. So that's just to frame it. On the delivery side, the building which you see is a very nice building in Magdeburg, which we delivered to one of our top tenants to Rhenus earlier this year and which has meanwhile also being transferred inside of one of the Deka joint ventures. So we delivered 8 buildings at 264,000 square meters, all fully let. That EUR 17.2 million rental income, 10 new contracts. And most of them are Breeam excellent. Except a few exceptions, we saw BREEAM very good. And going forward, we are only going to do BREEAM excellent buildings to deliver -- or better to deliver in our portfolio. The 2 pictures you see, one is in Belgrade, Serbia, where we started last year. You see the main warehouse of the Delhaize group -- Ahold Delhaize group in Belgrade, which has been delivered to the customer. And the other picture is our VGP Park Gießen Am alten Flughafen, which has also been transferred into the Deka joint venture and that is the building, which is operated by Zalando, which will go in operations later this year, and they are fitting it out. They are doing their fit out at the moment. The largest share of new developments, which we delivered are tenants active in logistics. So that's Ahold Delhaize and Rhenus Logistics group. But of course, e-commerce has been a big one in the delivery, thanks to the Zalando and Picnic deliveries, which we did. And the light industrial relates to Alsónémedi and Nissens, which are Alsónémedi in Hungary and Nissens in the Czech Republic. I have some examples of things we delivered. So we bought a couple of years ago, also a brownfield in Heidelberg in Wiesloch-Walldorf, just right next to Heidelberg. It's Heidelberg Druckmaschinen that we delivered the first building to Picnic. And we have a lot more to develop. We have about 21 hectares, which we can develop in 125,000 square meters. So another 100,000 square meters to go. In Gyor Beta, we delivered our building to Apollo Tyres and Alsónémedi. We are expanding the park also because it's really very successful. In Gießen, we delivered to Zalando. You can see it here. It's one of our biggest developments, which we ever did. In total, it's over 100 -- it's 251,000 square meters in total and the park is completely ready, delivered and operational for our customers. In Magdeburg, we delivered to Rhenus. As you can see, it's a 75,000 square meter facility. That's a big one. In Zvolen, that's a smaller one. It's a regional city in Slovakia. We delivered also a building with a green roof, which is fully let to Packeta, which -- mostly is Packeta, which is an e-commerce provider. And our portfolio, including the joint ventures with all these deliveries has grown organically at an annual compounded growth rate of 27.5%. And we aim to keep that pace if we can. It's shown really resilient growth. And this is measured since 2016. VGP exists since 1998 when I founded it first. But you can see that the biggest growth part has been it's growing ever faster with the new countries, which come to it, and I hope to be able to say that this will -- is a trend which we will continue. The total investment property today on a 100% basis is more than EUR 7 billion -- EUR 7.4 billion, which we have under management. It's very well diversified geographically. Of course, Germany is a big chunk out of it. It's almost EUR 4 billion of that is Germany, which has been always the biggest contributor to our growth and will also be this year. Western Europe represents 75% almost of the total portfolio value. We have -- the investment portfolio exists of EUR 6.1 billion of completed assets, EUR 540 million of assets under construction and development land of around EUR 746 million or that's 10% of our total balance sheet. On the development side, what you see in front in the picture is our building in Rouen. Left is the Jenec, and that's fully let, that building, to Sénalia, a local player out of Rouen. We bought the land plot last year, and we are constructing now. We just started a new building, which is also already partly pre-let to Ziegler. So the portfolio under construction represents EUR 57 million of new leases approximately once it's fully let. Yes, it's 835,000 square meters, as we already said. We have started up in the meantime, a couple of buildings. We've delivered also a couple of buildings. So it will be another number at the year-end. But it's now well over 70% pre-let. And we always measure because we have a construction time of about 12 months and we start -- when we start a new park, we always start the first building speculatively. Hence, we have a little bit more, but I am very confident we see so much demand. There is so much things for us in our portfolio on the negotiation at the moment that I am confident that we will be well over EUR 400 million of contracted rental income at the year-end and without any significant vacancies in our portfolio. This is -- we also have very good construction prices at the moment. So we feel very confident about that we are building the right value for our money and also here, Western Europe represents the bulk of the portfolio under construction at 60%. Yes, our developments are ongoing. With the exemption of the Netherlands, we have everywhere now, I think, buildings under construction. You can see it. It's very well spread. And I have a little bit of examples which are there. This building has meanwhile been -- or it's going to be delivered in a couple of weeks. It's our park in Valencia, just a building which we also started speculatively in the end of last year. It's virtually completely delivered now, and it's fully let to Jysk meanwhile before completion. So that's already gone. We have our VGP Park in Martorell, where we are in final negotiations with the tenant. It should be signed in the beginning of September. It's a small building, 10,000 square meters. Martorell is in Barcelona. We are -- we have a new construction started. You can see it from the picture, just the foundations are now ready in Sevilla, Dos Hermanas. we have partly pre-let the building to Metro -- the Metro Group, [indiscernible] Metro, and we have a lot of demand for the rest of the building. So we just started. So we're confident that it will be leased out soon. We have started in Pamplona. That's just now. We just received our building permit on the 4th of July. So it was just after we finalized our half year. And the building is well under construction. Now the frame stands up and that's the Hyundai Mobis. It's fully let completely, 50,000 square meter to Hyundai Mobis. The same goes for Palma Paradigma. We also just started it up now. It's also a 50,000 square meter and it's also fully led to Mutti on a long-term lease agreement for their warehousing solution. The same goes for Legnano. We just started it up. It was a brownfield for which we had to wait a little while for the building permit. We finished the demolitions. And as you can see on the picture, we have just started with the groundworks. We already pre-let part of it. We already have 2 lease agreements in place and we are negotiating with one tenant on the rest of the building on the bulk of it. So that's in Milan. It's a top location in Milan. Next year, there will be another top location in Milan, which we're going to start for which we are now waiting for our -- it's in Palermo and I hope to be able to start also quickly. And also in Verona, we should be able to start next year where we have now our final permit finally available. In Leipzig Flughafen, that's a new park. It's a big one. It's 50 hectares. We did the day plant, so the zoning plan completely and we can now start. We started our first construction. The first lease agreement is very imminent to be signed with the tenant. We can build that 225,000 square meters. So still a lot, which we can construct in Germany. And we just started our first building. As it's a new part, we always start the first building speculatively. But as I said, we have a good demand for it. Gyor Beta. It's been started in the beginning of this year. It's fully let to Transdanubia. It was a pre-let and transdanubia is going out of another building where they had 12,000 meters, and also that unit is already relet. It's going to be taken over by the next tenant in November, Materjane is that. In Bucharest, we also started a new building. You can see it's all of our nicest parks, also Brasov. I would say that our park in Brasov is maybe one of the top 5 in the whole VGP collection. Also here, we have mostly pre-let already the maintenance of DHL, Target Media and Omnia Gusti. It's a large building also, 26,000 square meters, going very well. On the land bank, which is an important feature, we can construct roughly 4 million square meters on our land bank. That's not doubling. We have already more than 6 million square meters, but it's a huge size, which we can still construct on it and we're constantly working on new acquisitions. Our land bank is -- we started the year with 8.5 million square meters. We acquired during the first half, 375,000 square meters. We deployed a little bit more than we acquired. We deployed 500,000 square meters for new buildings. We sold our Moerdijk Park 720,000 square meters. I sold that one because of the concentration, which there is in the park -- [indiscernible], part of the Moerdijk portfolio, and they operate almost 400,000 square meters in the vicinity, which is going to move to Moerdijk and then there will be a huge competition on the market for existing space. So we are -- that is the reasoning behind why we sold it. We sold it with a nice profit, a very nice profit on it. So that's gone. And we have reinvested that money in other properties. So we own EUR 7.7 million at the end of the first half of '24. We have around 750,000 square meters, which is committed to buy once we receive the permit. So it brings the land owned and committed in the first half to EUR 8.5 million again, and we have another 317,000 square meters under option. So that's a bit what our land bank is. In the left, you can see the works at VGP Park Leipzig Flughafen, which has just started. The land bank is geographically well diversified across all the countries where we are active. And as I said, in all the countries, which you see, we have -- we are also under construction, except for the Netherlands, where we aim to start up a new building later this year, at the latest and beginning of next year. I have some examples of where we have expanded. Kecskemét has been a huge success for us. We have a lot of buildings which are already the ones here and here, it's all VGP park. So we have bought this land plot on which we have now signed 2 lease agreements. One is already signed. One is going to be signed next week. One is with VIO glass and the next one is going to be with [ Univer ] and they will occupy a whole of the land plot, which we have bought, when we completely leased before we start construction. in Vejle, we have -- it's right next to Billund in Denmark. Denmark is our new startup. We have acquired this year the land in Vejle, and we have also signed immediately our first lease on it with a local production company. So that building is going to be started up now as we speak. I think the groundworks have just started last week, and that's already partly pre-let. In Split -- Split is -- Croatia has been a very good market for us. We have started our first building in Zagreb which we also bought. And in Split, we did a new acquisition where we registered a lot of demand from the local retailers. So there, we also bought 19 hectares almost of land. It's just acquired a couple of weeks ago. We also acquired our new land plot where we also did the zoning plan in Bernau, Berlin, where we also registered a lot of demand for. We will start construction later this year when we get our building permit, but we have the zoning permit now. We think it's a very good location. We can build up to 70,000 square meters there. And we have good news on La naval. So I already presented a couple of times. Everything has been demolished. We have the permits in place now so we can start construction in the beginning of next year. We are tendering at the moment. You can see well, the difference between how it looked like a couple of years ago and how it looks like now. All the structures above the ground have been demolished and all the contamination has been solved. So we are ready to start, and we can build 110,000 square meters in the heart of the Basque country in Bilbao, very close to the city center. We believe it's a top location. Our flagship new project is our VGP Park in Russelsheim. We have signed with the city meanwhile all the planning agreements. We are working on it very hard in our own [indiscernible]. We have -- we are currently planning together with Opel to build a new green campus on this plot of land and that will be normally -- we should be able to start construction -- to start the demolition later this year, this year still and to start construction early next year to build the new green campus, which is a 20-year lease for the very big new buildings on site. There is a new engineering and design center, which will come here. It's been presented to the large public at the moment when Olaf Scholz visited the plant at the occasion of 125 years in Opel. We also bought this, the [indiscernible] and we bought the whole of this, and we are currently negotiating also with a couple of industrial tenants on various new occupations inside of these land plots, which goes a lot faster than we had anticipated because there is a sale and leaseback for 3 years, but we think we can release already part of it earlier so that we can sign our first leases still this year, and it's a big one. It's also -- we can construct almost 300,000 square meters on this park. It's a really nice location and we think it's very close. You can see how close it is to the airport. The airport is under the VGP logo. So you can see it's really very, very close to Frankfurt Airport. It's a top, top, top location. In Nuremberg, we also bought the Siemens side. You can also see that it's really, really very well connected to the highway and you drive straight into the city of Nuremberg. This is our land plot. It's leased until the end of 2026, and then we will be able to demolish it and to restart new facilities for which we have already a lot of interest from potential tenants, but Siemens really want to stay in until the end of 2026. So we will do it afterwards. And then in Velizy, the land plot which we bought last year, and I know I'm talking a bit long about it, but I want to show you our pipeline and the enthusiasm for what we are doing. We create new things. That's nice. In Velizy, we have just -- we are taking over now the premises from Stellantis. We are starting the demolition still this year. It's already been tendered out, and we can build up to 80,000 square meters in a top location in Paris right next to -- it's very close to Versace. So it's a really top location. We also bought Mulhouse, which we are also going to start later on where we have a part of the Stellantis facilities and where we can also construct 95,000 square meters roughly. So France, all in all, having started just very recently with 2 buildings under construction in Rouen and 2 new land plots, which have been bought already and a couple of others under negotiation. It's really -- our management has hit the ground running, and they're doing a very good job in doing new developments in France. And last thing, the renewables. The installed solar power increased by 115% year-on-year. So the gross renewal income over the first half was EUR 3.8 million versus EUR 2.9 million over the first half of '23. The total electricity production has increased a lot. And now we also have the license to supply energy in Germany to our customers. So we can sell electricity, and hence, we have also launched our first battery project. You know that the energy price is fluctuating a lot in Europe, certainly, when the weather is very good and the solar panels are all contributing. When the energy price goes negative, we will put it in our batteries. And when it goes positive, we will deliver it back as green energy to our tenants. So we can also not only lease solar panels to our tenants, but we can also now provide them the green energy, which we have already signed a couple of contracts on it, which gives us a lot more flexibility and a lot more potential on our ESG targets going forward. The joint ventures. So the building which you see here, the drone, it's -- the construction is starting now. We will have the building permit at the end of this month. That's the Isar Aerospace new building in Munich. This is our park in Munich, where we have BMW, who is doing their -- they make their battery plant here, and this is KraussMaffei, one of the largest solar panel installations on the roof on buildings in Germany to date. That's going to start. And that's in our joint venture, we are doing this together with Allianz to develop the new aerospace building. It's just started. On our joint ventures, the only thing which I wanted to say is it's working really very well, the model. It's still intact. We find a lot of appetite to join up with us from our existing joint venture partners in the first place, but also from other people. Since 2022, we recycled over EUR 1.7 billion of net cash out of these joint ventures, which enabled us to just continue in our growth like we are and we have a very solid balance sheet, thanks to the model today with more than EUR 1 billion of liquidities availability. We had EUR 625 million cash at the mid of the year and EUR 400 million of undrawn credit facilities available. So from that point of view, we want to say thank you to all of our partners that's working very well, and it's a very good cooperation. A small word on it more in detail. The Deka joint venture, the acquisitions have now all been completed. So we did a joint venture agreement with them in the beginning of 2023. The joint venture has now completed all acquisitions. Certainly, last closing occurred last week. We generated EUR 68.1 million of cash proceeds. And Deka has acquired 50% stake in 5 project companies owned by VGP in Gießen, Laatzen, Göttingen, Magdeburg and Berlin Oberkrämer. 20 buildings, EUR 53.6 million of rental income and we do 100% the asset management of that joint venture, and we believe there is a lot of appetite to do more. Saga is the new joint venture, which we just started with Areim, and we signed at the end of last year this new joint venture with the aim to invest together almost, I think it's EUR 1.5 billion of gross asset value . We've defined the pipeline for that. The LTV of the pipeline, it will be around 35%. The investor has a committed equity ticket of EUR 500 million. And we have executed already our first closing, 17 buildings, 450,000 square meter lateral area, EUR 23 million of annualized rental income is that with 100% occupancy rate also. The transaction was valued at EUR 437 million, and it allowed us to recycle EUR 270.2 million of net cash proceeds. So that worked very well so far. The building you're seeing again is the building in the Rouen, which will be transferred later this year, probably also into that new joint venture. I'm going to hand over the word to Piet to make a summary of our financial performance for you. Thank you.

Thank you, Jan. As always, I have prepared a slide deck, including the P&L, the balance sheet, cash flow and some insights in our debt position. But as Jan already mentioned before, we are very happy to report a net profit of EUR 141.5 million, so EUR 154.6 million before tax, which is a 308% increase versus the first 6 months of 2023. As always, our P&L is a reflection of a lot of things that occurred during the first half: transactions, new deliveries, revaluations, realized gains. So I'll take a step-by-step approach here going through the main points and explaining where it all comes from. First of all, if you look at our net rent and renewable energy income, it's relatively stable at around EUR 33 million. But in reality, the rental income that is generated, is from a completely different portfolio as what was generated in the first 6 months of last year because obviously, we have done quite disposals through joint ventures. In fact, we've done a transaction in H2 last year with Deka. And in H1 this year with Deka and with Saga joint venture. So that was EUR 71 million of annualized rental income that has been disposed, so been removed. From what has been disposed this year, there was still EUR 8 million of rental income. And then in April and I think in May, it has been disposed. But until then, there was EUR 8 million. So but the underlying rental income is by coincidence, actually almost the same as it was in previous period, but it has been generated from a completely different portfolio as we have been delivering a lot of new assets. Maybe it's then also more important to look at our net rental and renewable energy income on a proportional basis. So if you look at it, what we own 100% and what is inside of the JVs where we own typically 50%. If you take all of that at share, then it increased from EUR 75.6 million to EUR 91.6 million or an increase of EUR 16.1 million. And the second point or the second part of this net rent and renewable energy income is effectively a renewable energy, which Jan has already a little bit explained that we have a considerable increase of capacity installed generating revenue income, but it has been partly and that has also led to an increase of 31% in the revenue up to EUR 3.9 million, but it has been partly offset by lower energy prices and also lower energy production due to the solar revenue that has -- or could be generated from the panels. If we go to the next point, the joint venture management fee income, that increased with EUR 4 million from EUR 11.7 million to EUR 15.7 million. This joint venture management fee is always composed of basically 2 components. One is a asset management fee that we charge to the joint venture for managing the JVs. As the JVs have grown, there are more assets in. Our asset management fee obviously increases. And this increased from roughly EUR 10 million to EUR 12.7 million, and this will be recurring, and it will continue to increase as we have done transactions in the first half, which will have an annualized effect in the future, and we will continue to do, obviously, disposals to the joint ventures. The second component of the joint venture management fee is our development management income. So it happens that in the completed portfolio of the joint ventures, there is some works to be done. If we release something and additional office to be constructed, then we obviously coordinate all of this work, and they come on top of the asset management fee that we charge. And this also increased from EUR 1.3 million to EUR 3 million. I think the next line in our P&L is probably the most defining of it all. That's an increase from EUR 45 million to EUR 99.1 million in net valuation gains. Easily summarized, it is basically the revaluation of our own portfolio was completely flat. We had a EUR 1.5 million effect of that on the total portfolio that we have and was revalued between end of last year and 30th of June which then increased with roughly EUR 34 million of profit that we have on our developments that we have initiated during this year. And it has then -- we realized an additional gain of EUR 63.3 million on all of the transactions that we have activated and that includes then Deka, Saga and also our disposal of the Moerdijk joint venture in February of this year. I will come back on the revaluation of the joint ventures on the next slide. But first, we have the administration expenses where we see an increase from EUR 21 million to EUR 28 million. Roughly, the FTEs were stable year-over-year, but we have seen some -- as we have been profitable, of course, we have some extra provisions allocated to the LTIP. There is some inflation in the wages, but also there is a higher depreciation component of EUR 1.5 million. That is because the renewable energy is at cost on our balance sheet and being depreciated. And if we take more assets completed, we start depreciating them. So that is a component that increases. And finally, there is also a EUR 1 million more expense because we have capitalized less project time on projects versus the first 6 months of last year. I think a very important contributor is the next line again. Last year, it was a loss of EUR 12.8 million, mainly due negative revaluations in the joint venture portfolio. As you can see, now it is a positive contribution of EUR 33.7 million. And I have taken the liberty of taking that share in the result of joint ventures line in the table below, where you can see the components of this EUR 33.7 million net profit at share, which we have in the joint venture. So there, you can see the net rental income, for instance, at share went from EUR 42 million to EUR 58.7 million or an increase of 39%. Whereas we had a loss on the investment property and revaluation last year of EUR 40.7 million, we have now a profit of EUR 8.6 million. Again, the joint venture portfolio was a very stable valued, also the average yield of all of the JVs knowing that it's -- there are some extra assets in, of course, as well in the first half disposed to the joint ventures. Nonetheless, it remained quite flat with 5.01% and now it is 5.08% the weighted average yield of the JV portfolio. There are some more net financial expenses. So from EUR 13 million to EUR 24 million at share. That is obviously also because there is more debt on the JVs. And partly also, the Deka JV is let's say, structured in a way, having a little bit more shareholder loans than in the Allianz joint venture and the Saga joint venture with then also expressed a bit more in interest expense, which then in our P&L, obviously, is interest income, and you will see it popping up again in the cash flow statement later. Nonetheless, EUR 46.5 million more profit contribution from the JVs last year, very solid operational performance inside of the JVs. Next line, the other expenses is a contribution that we have provisioned for our VGP Foundation. We haven't done that in the last year. We have done this now in this year again. So that brings us an operating result, an increase from EUR 56.7 million to EUR 151.7 million. And then very interestingly, our net financial result in our own consolidation was an expense of EUR 8.1 million in the first half last year and now it's an income of EUR 2.9 million. That has everything to do with the fact that we have quite a substantial amount of cash on hand. So we had EUR 4 million more interest income from cash on hand, on deposit accounts. We had EUR 11 million more interest income from joint ventures, which you actually saw also more or less at share coming back in the proportion of consolidated income statement of the joint venture. And we had less interest expense to pay to our debts because we, in the second half of last year, repaid a bond of EUR 225 million, which had roughly a 3.9%, I believe, interest expense. And in February this year, we took up a new loan of the European Investment Bank of EUR 135 million, so net much less debt, and that was also at 4%. So we saved EUR 2.9 million on interest expenses, resulting thus as a fact that we have now a net financial positive result of almost EUR 3 million. And I always like to mention it, although it's not really in a table on the slide, but we have, of course, the holding company, VGP NV, which really realizes the historical gains because that is all at cost booked there. And there we have a profit of EUR 175 million or also an equity of EUR 1.6 billion. In terms of EBITDA, VGP looks at its model in 3 business segments: the investments, the development and the renewable energy. They have a combined EBITDA of EUR 182 million, which is up EUR 68.1 million or 60%. So a significant increase. I'm pleased to report that this can be noted in the 3 segments. Let me start in the middle. The development basically shows everything what we realized in the development. So what is on the construction and all our assets, which are on our own balance sheet are being fully revalued there. The realized gains that we have there, we take a share of the admin expenses, and that EBITDA increased from EUR 27.9 million to EUR 80 million. We had a CapEx of roughly of EUR 223 million. And this entire segment represents about approximately EUR 1.4 billion of assets. Once the asset has been completed and disposed into the joint venture, it comes in the column on the left, the investments. So there you see the net rental income of the completed portfolio. You see our joint venture management fee income, which I already explained to [indiscernible]. And then you see our share of JV's adjusted operating profit after tax, this is basically the share in the joint ventures result, excluding annual revaluations. So we don't revalue anymore in this investment contribution EBITDA segment, and this represents a total asset of EUR 2.4 billion. And then last but not least, the renewable energy that had an EBITDA increase of EUR 1.5 billion and a total CapEx of approximately EUR 8.1 million, but a good contribution of our 3 segments in the first half of this year. Brings me to the next slide, and that is our balance sheet. The total assets and total liabilities increased from EUR 4.4 billion to EUR 4.6 billion. The big movements here, what you can see, investment property went from EUR 1.5 billion to EUR 1.7 billion. It represents a completed portfolio of EUR 777 million, assets under construction of good EUR 500 million and development land of EUR 670 million. It has been valued at a weighted average yield of 7.6% versus 7% per December '23. It's not that we had a devaluation, as you have also seen in our revaluation result, it's just a mix of assets that is different versus 31st of December. The property, plant and equipment increased with roughly EUR 5 million. It represents a CapEx of EUR 8 million in the renewable energy business where the main components, EUR 100 million is related anyway to the renewable energy assets, which is EUR 80 million completed installations and roughly EUR 19 million assets under construction. If we then look at the investments in joint venture and associates and actually also the other noncurrent receivables, the movements are intertwined somewhat. So obviously, the investments in the investment joint ventures increased significantly. This because we have also contributed equity into the new joint ventures of roughly EUR 155.6 million. We have disposed off Moerdijk, and we take back the share on the result of the JVs of EUR 33.7 million. So that makes the whole bridge between the end of last year around EUR 1.2 billion. And in the same way, the other noncurrent receivables, they actually lowered from EUR 566 to EUR 549. What's happened there, we had a receivable on the LPM Moerdijk of roughly EUR 130 million, and we created a new shareholder loan to the joint ventures following the transaction with Saga and Deka of EUR 112 million. Our cash position, as already mentioned, it increased significantly as we recycled a lot of cash. It's now EUR 625 million, knowing that we have also EUR 400 million of revolving credit facilities untapped. So an available liquidity of EUR 1 billion and the disposal group held for sale. These include assets which are destined to the JV or are already part of the joint venture, but is still under our development and our joint venture partners still needs to pay for them or they still need to transact inside. This obviously lowered significantly from approximately EUR 90 million to EUR 230 million. That is because we had all of the Saga and Deka assets, which transferred in the first half disposed into the JV model. What is now still left in this EUR 230 million or EUR 229 million in group held for sale, roughly half of it or a little bit less than half of it is the Deka building the Magdeburg building, which has been sold in August last week, in fact, and also generated us EUR 68 million of proceeds. The remaining assets are some lands and assets under construction in a multitude of joint ventures that we currently have in place. If you look at the liability side, I think equity has increased to EUR 2.255 billion. Basically, it's the culmination of our net result, EUR 141.5 million minus the dividend of EUR 101 million that has been paid out, that makes the bridge between 2 periods. And on the debt side, most of it, I think I already mentioned, but basically, let me start with the current financial debt that is now EUR 176 million. That includes 2 bonds, one of EUR 75 million, which has been repaid in July; one of EUR 80 million, which will be paid back in March next year. Accrued interests are there and we have to pay off a part of our Schuldschein loan, EUR 3 million in October. And the noncurrent financial debt that decreased to the EUR 80 million of bonds that we moved to current financial liabilities and then increased with EUR 135 million, which we drew on the European investment bank facility in February this year of a total facility of EUR 150 million. Given the strong cash recycling and our profitability, the consolidated gearing ratio lowered from 40% to 32.7% at 30th of June and likewise, our proportional LTV dropped from 53% to 48.6%. This again summarizes once more our cost of debt evolution. It has been going down in last years as we have been paying back bonds, which were at a higher cost than the ones that we have on the longer term. It increased a bit this year because at year-end, we had repaid the obligation of EUR 225 million. And this year, we took then the loan of EUR 135 million with the EIB which has a 4.15% fixed interest and it's paid off in a 10-year period. So -- but following the bond repayments in July, the EUR 75 million, our average cost of 2.25% of interest expense on our loans at 30th of June has then lowered now today to 2.21% again. A quick word on our cash flow. It's basically a summary of, I think, what I've said before. We started the year with EUR 210 million plus actually EUR 9.4 million, which you can see on the bottom, which was already in the group held for sale. So we started the year roughly with EUR 220 million. We had a total cash flow of the period of EUR 405.7 million versus a cash outflow of EUR 347 million in the previous period. So the big contributions are; we obviously recycled a lot of cash from our joint venture transactions, EUR 662 million. We spent roughly EUR 198.7 million in our own portfolio, plus we have some assets under construction in the JV, and we have given loans to the JVs for that. So that was EUR 61 million. Distributions by JV is EUR 6.9 million, and this is now going to -- you will see this more recurring because in the Allianz Joint Ventures, we do typically once a year in the second half of the year, a full distribution of all net cash inside of the JVs. In the Deka JV, that is quite a substantial shareholder loan, which is interest-bearing and the interest is paid in a monthly rate. So we already received EUR 6.9 million of effective interest income from that joint venture. And then the acquisition of EUR 4.273 million is an additional stake that we have bought in one of our development joint ventures in San Sebastian, Spain. So that brought us a net cash of EUR 405 million and we also drew EUR 34 million from financing activity. So first off, we paid the dividend to EUR 101 million, but then we drew the EUR 135 million loan, which then comes or sums up that we have EUR 625 million of cash at the end of the period. This is the maturity of our debt. So it's a 4.1 year still average maturity. The 78% is in orange because to date of this presentation, we have paid off EUR 75 million. The remaining EUR 3 million will be in October. Next year, we have EUR 80 million. And then obviously, by 2027, we have a large bond repayment coming up of EUR 500 million on which we will also start working to refinance this. Last slide is we have a significant headroom to our key covenants, and I already shared the proportional LTV of 48.6%. But if you look at it at our JVs on a stand-alone basis, which have only completed assets inside, it is only 31.4%, and I think that was my last slide. So happy to give it back to you, Jan.

Thank you, Piet. Yes, on the summary and the outlook, doing development and being in our company, which is composed out of many -- out of more than just -- we are not just a REIT, we are not just a developer, we are not just a renewable income company, we are a combination of everything a little bit together. On the development side, the margin you make is, by the way, you buy in assets which you are going to develop going forward. And I think we have done over the past years, a very good job on that. I wanted to show you a little bit with our Russelsheim, our Siemens, our Velizy, our Mulhouse and La Naval and all the others, which we all, I think, bought for reasonable pricing, which we all have now -- which all are going to come to maturity, so we can start developing them really. We also have a big land plots coming in, which we have been waiting a couple of years because of the complexity of getting their permits and they're now coming active. And we see -- so that's on the site where the foundation for next -- our future profits has been let, and we think we have a very solid foundation on the need of our business model. And if we go looking forward, we see that VGP and I have -- we have all focused very much on technical competence and I'm trying to be a real partner for our tenants that we see that we still have a lot of demand inside of our portfolio. As I said, we are currently negotiating on a number of very big lease agreements. We've just started up a number of very big new constructions, which are pre-let mostly. So I am very confident about the year going forward. I have no crystal ball. I can't say where the valuations will go and what the thing will be, but I am a very strong believer that Europe is a resilient and strong industrial base. Many people are most of the time too dark visions about many things and only want to see the negative things. I am an optimist and I am looking with confidence to the future.

Nora, I think we can go to the Q&A.

[Operator Instructions] We will now take our first question from Frederic Renard of Kepler Cheuvreux. Please go ahead.

I have 2 questions, actually. The first one is a lot of your peers are actually discussing the slowdown in occupier demand and you seem to see the opposite. Yet the pre-letting ratio is below historical standards. So how do you see this ratio evolving? And maybe how do you assess the current demand versus last year? And maybe to give a bit more detail on a scale of 1 to 10, let's say, that last year was at 7. How much would you quantify it now? That's the first question. And then maybe you said on the closings going forward, but you have other interests than the existing peers. Can you give a bit more detail on what is exactly and how tangible it is?

Okay. Well, as we already said, we signed during the first half year, EUR 28.7 million of new leases. Meanwhile, there is about EUR 5 million more. So we are already at EUR 33 million of annualized leases signed this year. And on the back of that and seeing all the demand, I think we know what we are doing in our parks and where we see the demand. We have started a little bit more of speculative construction, which I find still very reasonable in view that everything is going to be delivered within 12 to 18 months and we still have a little bit of a time frame to get at least. And most of the buildings, I don't think we have -- besides the Leipzig building, most of those buildings have already -- are already partly pre-let. So there is everywhere demand. So I am not at all worried about demand levels. Yes, it is true that the traditional tenants, we have seen going slower. The retail, which was a big ticket for us in the past years, is taking a lot more time to make a decision, et cetera. But it's, in our case, completely compensated by new onshoring activity, by new investment activities into new technologies by people who need to have more efficient buildings and which are looking to new operations because of ESG measures, et cetera by the new industry, the new car industry, which is still although slowing down, but they are still making their long-term plans. So on that -- from that perspective, we feel confident. Otherwise, I wouldn't do so. I didn't construct anything during the years when the construction price was far too high. And now that the construction price is really -- it's come down with more than 30% in many cases, that the construction price for us is really acceptable again. We are a very -- I'm not afraid to invest in good value for money. That's the first -- the answer on the first part of the question. And on the second part, it's too early to talk about it, but we are in talks with both existing and new people on enlarging our joint venture model. So when the time is right and when we can disclose it, we will. But I can give you confidence that there is really appetite both from the existing joint venture partners as well as from new ones.

And we'll now take our next question from Marios Pastou of Bernstein.

Just on the volume of developments. Can you give an indication of what you expect to complete in the second half of this year? And what you think a sustainable annual run rate of development activity completions is based on current demand and capacity in the market?

Okay. Yes. Thank you for your question. I think we have planned for the total year to deliver roughly 600,000 to 700,000 square meters. It will be a little shift to the left or to the right. It depends on when exactly the last building will be delivered, but between 600,000 and 700,000 square meters. So the bulk of what we need to deliver is still in the second half year. That's the first thing. Normally, we always say we are on a run rate of 400,000 to 600,000 square meter per annum. That is normalized what we think we should come out of our normal markets where we are. It's going to depend a little bit. I think we have a couple of very big projects in the pipeline, which are going to start up after the year-end, not immediately still in this year, maybe it will. So it will be a little bit also dependent on when we get the right -- the final permit for some of the things. But I think it's fair to say that we expect this year to be on the high end or maybe a little bit more than the 400,000 to 600,000, which we always said. That is where we are today.

And we will now take our next question from Paul May of Barclays.

Just a technical one for me. I see the implied tax rate dropped to about 13% from 25%. Just wondered if that will be for the full year as well? On recurring income that is.

Yes, yes. There is a -- I'll take the question, if you don't mind.

I wouldn't be able to answer it.

The taxes always are composed of 2 components. One is the effective tax and the other one is the deferred tax and the deferred tax is highly related to revaluations inside of the portfolio. If you have reversals or increases last year and this year, so that is already one movement, which is deferring a lot. But the good news is that the effective tax, which, if I recall well, was EUR 4 million in our own portfolio and in comparison to last year, it was, I think, EUR 3 million more. It's mainly because of the tax position of VGP NV, the holding company, where the difference comes from. And that makes -- and the other one is just the movement on the deferred tax liability. I think in the notes,I have of the press release, there is a detail on these 2 components, how they have moved exactly.

Okay. So sorry, just on the recurring -- I appreciate it [indiscernible] on the recurring, the lower implied tax rate is now going to be a basis moving forward, is that right, on the recurring income?

On the recurring income, if you look at the investment side or in the JVs, I think there you can consider it -- the JVs will always become bigger and more profitable as more assets come in and more rental income come in. But in percentage-wise, it should not be -- it should not be materially different, no.

I'm sorry, just on the percentage-wise, it has come down quite a lot. But if you look at proportional current tax this half year versus previously, it's about 13% of the before tax profit, whereas in previous years, it was about 25%. So it's come down quite a bit in percentage terms. I just wondered if that lower percentage should be?

Okay. I think you are referring to the proportional income statement of the joint ventures, where indeed there is a big...

Of the overall actually, yes. Of the overall, it's unproportional.

There again, it is the deferred tax movement between 2 periods where you had the reversal last year and now you have an upgrade of the -- or a very stable revaluation of the portfolio. That makes the movement. But in cash, the joint ventures, it was also a share saving of EUR 641,000. So both in our own portfolio as in the JVs, we have less expenditure on effective tax. And we have obviously moved the deferred tax liability due to revaluation gains that we have booked.

Yes, you might take it offline. I'm not referring to the deferred tax, but -- so we'll probably take it offline rather than boring everyone here, but we'll get to the bottom of it.

And we will now move on to our next question from Thomas Rothaeusler of Deutsche Bank.

Just one question on JVs and funding. I mean you referred to good demand from JV partners and potential new JV partners. Just wondering how about new sources of equity beyond JVs. I mean I think you once referred to fund structures. Any color here?

So far, our model works perfectly. Why would we change a winning horse. I feel confident in the current model, and I don't have the necessity to go for other measures of dilutive instruments or equity raises, et cetera, as long as the joint venture model works well and there is a lot of appetite for it. And it's nicely cash generative for us. We are in control of all of our parks. We have good partners who follow us and then we have the commitments made and we also honor them. I have no need to change my model. So -- and it's not that we are not thinking all the time about trying to find out something better. But so far, we didn't find out something better. We're happy with the way we operate our business.

[Operator Instructions] We will now move on to our next question from [indiscernible] of Kempen.

So if I look at the pipeline, it's, let's say, stable. It came down a bit, but then if I also zoom in on the assets that have been under construction for longer than 6 months, that -- so the pre-let came down from above 80% to 74%. And I guess, given that the pipeline is stable, that's a bit surprising. So could you add a bit more color there? And also, if I'm not mistaken, the average project size is also coming down at least compared to historic -- at least in historical terms. And you could argue that smaller projects are easier to let. Could you add more color there as well? Is that a conscious choice or just a function of demand?

Well, the fact that our average size of buildings is smaller today is linked to the fact that we are doing a little bit more of a speculative development where we choose to make the units not too big and not to go for very large units in these markets. It's in the past, most of our -- so we had before maybe 22,000 square meters on average of our buildings, it's dropped now. If you look at this to a little bit above 10,000 square meters, it's true that we have a little bit more of smaller units inside. They are also easily lettable, I think, that's true. That's from a cautious point of view. But it's always dependent also if you are going to take a picture, by this time next year, it will be a total different look because there are a couple of huge projects in the pipeline, which are going to be signed and which will completely mix it up. So there is no -- I cannot give you a rule, there is no rule on it. We are now developing 10,000 square meter units. That's not the thing. It's just the mix of our total development. It's always been speculative a little bit smaller. And then we have a lot of build-to-suits, which are big to very big. If you look at our [indiscernible] buildings, that's one tenant, 206,000 square meters. Of course, if you have that in the pipeline, then it makes a big difference.

Zalando.

Zalando, yes.

Was delivered this year. So that's immediately 150,000 square meters.

150,000 square meters delivered to Zalando. It, of course, changes the mix completely. We have now just started to top a couple of very big buildings again. And the Mobis building is a 50,000 square meter in Pamplona. The VAT building is a 30,000 square meters. The Isar Aerospace is 40,000 square meters. The new building in Rouen is 40,000 square meters. They are also pre-lets, as I said. So no, there is no rule of thumb on that. And then once more on the -- I have done it on purpose. We've started a little bit more buildings. Most of them are already pre-let. So we -- they are partly pre-let. So we constructed a bit more, which is more effective to build and in cost, it's more effective to build it bigger. And when you build just a small unit, which you have pre-let, then there is a little bit more vacancy. But I have -- there is -- we have so much in the pipeline that this is a discussion which I think is completely -- let's talk again in 6 months' time, and we will see where we are. It's -- I feel very confident about it. I mean I'm every day working on my markets, I know them. I see them. I see the demand. My people are every day on the spot, and we feel very confident about our pre-let levels.

Thank you. And we'll now take our next then from Amal Aboulkhouatem of Degroof Petercam.

Just to come back on the land bank acquisitions you've commented in the half -- first half of this year. Can you give us some color on how the price are evolving? We have been going down recently. Is it still the case? Or are they stabilizing?

Yes. I don't think land prices are coming down a lot at the moment. It depends a little bit on the jurisdictions. VGP is a very pragmatic investor. So we always try to focus on -- we put our money on land plots, where we see a nice margin and a nice margin is for us at least 30%, which we can realize, and that's very much dependent on the cost of the land, which you are buying. Now -- so you need to be very careful and you need to be very selective going forward. But -- and it's very dependent on country by country. Germany, of course, has fueled a lot. The Czech Republic is at the moment for us very difficult to buy land for a reasonable price. You can still make on paper a very nice return, but then all the anticipations you make about a market and where it's going to go to, you have to project them very positively, and we are trying to be very careful in that part. So we have a large land bank. We are working on enlarging it, but we're very picky on our landlords going forward. And we bought last year, very nice things. And we are working currently on some very nice transactions and those are reasonable end prices, but I don't see them -- I don't see them increase, but I don't see them immediately. There is no crisis in the better land plots we need to sell immediately. So I see the market is relatively stable. There is no -- there are no investors for very big land plots at the moment, I have the feeling. We are very alone in that. There is a couple of us on the market for bigger stake projects like [indiscernible], but on the smaller land plots, where you can build a one-off, one building, there is still a lot of competition in the market. So there is also a long real pressure on the land prices of the smaller projects. Does that answer your question?

Yes, if I may just add another question. On your light industrial exposure, we see an overall economic slowdown in Europe, especially in German industries. How do you see your exposure of light industrial within your portfolio going forward?

Very positive. The light industrial projects, which we are having in our portfolio are all doing very well. They're all very long-term lease agreements with strong groups and they are all -- we have the -- I think our buildings leverage at 4 years of age. So it's all very brand new projects. We have been very picky on who we take and who we go forward with. We have been very much supportive. We see ourselves also as a service provider to the industry. So we try to do this project in buildings, which are easily to be relet. So we don't have a -- I don't have any stress about being it too difficult to release because they are standardized. And the truth is, afterwards, on the inside, we adapt them a little bit for the tenants and for the special requirements, but that is always paid by the tenants directly. So there is -- we have no exposure on special occasions. And we are -- as I said, we are 99% let at the moment in our existing portfolio. That's better than the market. And we have -- there is no bad payer in the whole VGP tenant base. So everything runs well. So I feel very comfortable about it. And going forward, many of the big projects we are working on are industrial. And I think that's a good sign that people still want to reinvest and to bring their pipeline, their availability of their products, which they are making back to Europe. We see a lot of new industrial activity, and we're glad that we can work on it.

We will now move on to our next question from Steven Boumans of ABM AMRO-ODDO BHF.

This is actually [indiscernible]. I'm here in the room with Steven. But we are looking maybe for some more information on your strategy for countries that are covered by the second JV for the Aurora JV. the press release mentioned that Allianz no longer has exclusivity here. So can you please elaborate on what your strategy will be here on the capital recycling in these countries?

Well, I think I already answered on the question before because we said -- I said we are currently negotiating both with existing joint venture partners and also with potential new ones on making further amendments to our joint venture strategy. There is -- so one part of that is that we have now released. We have a release for all of our assets, which we have in the countries, which are covered by the Aurora transaction, and we can -- we are free to do with them as we fit -- as we deem fit. So we are working on that. And we -- I hope to be able to say by the year-end, it always takes a while to make an agreement on new joint ventures, but I hope that by in a relatively timely manner, we will be able to communicate a little bit more on it. I can't for the moment, but we're working on it. That's all I can say to it.

That was our last question. I will now hand it back to Jan Van Geet for closing remarks.

Yes. Thank you all very much for being on the call. We -- if you have any other questions, you know where to find us, and we'll be happily here to answer you. I just wanted to rephrase once. I think we have a very solid start of the year. We are growing in double-digit numbers, and we have all the cash available to do this in a very profitable pipeline going forward, I think. So I hope you will put your trust further on in us, and thank you. See you soon.

Thank you. Bye.

Bye. Bye.