CTP NV Beats Targets as Profit Year to Date 2021 Jumps 92% year-on-year
AMSTERDAM, 17 November 2021 – CTP NV (CTPNV.AS), (‘CTP’ / ‘the Company’) the EU’s leading listed developer and owner of logistics real estate by gross lettable area (‘GLA’), reported a 92% rise in profit for the first nine months 2021 to €317.8 million, compared with €165.8 million for the same period of 2020. The Company’s strong performance was driven by solid ongoing leasing take up, rental growth and record development valuations from accelerating yield compression in CTP’s core Central and Eastern European (‘CEE’) portfolio. The robust financial results are manifested in adjusted EPRA earnings per share year-to-date increasing to €0.38 in 2021 as compared with €0.29 for the same period in 2020. The Company has also invested significantly this year in boosting its talent base, attracting new people into senior management roles in country teams and across group functions.
Key Financial Highlights
|YTD to 30 Sept 2021||YTD to 30 Sept 2020||% Increase||3 months to 30 Sept 2021||3 months to 30 Sept 2020||% Increase|
|Net rental income||€239.9 m||€203.9 m||18%||€79.6 m||€66.8 m||19%|
|Net valuation result on investment property||€265.2 m||€88.5 m||200%||€119.6 m||€46.7 m||156%|
|Profit for the period||€317.8 m||€165.8 m||92%||€129.5 m||€60.5 m||114%|
|Company specific adjusted EPRA earnings per share||€0.38||€0.29||31%||€0.13||€0.06||117%|
|Investment portfolio||€ 6,127.0 m||€ 5,074.4 m||21%|
|Investment property under development||€ 892.9 m||€ 522.4 m||71%|
|EPRA net tangible assets per share||€ 9.88||€ 8.07||22%|
CTP’s growth is gathering speed:
- GLA expanded to 7.1 million m2 in Q3, 2021 from 6.6 million m2 at H1 2021, leaving the portfolio on track to grow beyond 7.7 million m2 this year, 200,000 m2 more than anticipated
- Landbank grew by 1.6 million m2 to 16.3 million m2 at the end of Q3 2021
- Annualised rental income rose 7.1% to €407 million in Q3, 2021 from €380 million at the end of Q2 2021
- GLA market share increased to 25.4% in Q3, 2021 in core markets (30 June 2021: 24.9%)
- The proposed takeover of Germany’s Deutsche Industrie REIT-AG, announced in October, will add 1.6 million m2 GLA and €59 million of rental income, with earnings becoming accretive upon completion of the acquisition in H1 2022
CTP continued to execute its strategy of building on the solid foundation that its investment portfolio provides and is delivering resilient income and sustainable value through its developments.
Proactively optimising the performance of one of Europe’s largest logistics real estate portfolios
The Company’s market leading portfolio increased to 7.1 million m2 GLA (30 June 2021: 6.6 million m2) in Q3 as a result of development completions and strategic acquisitions. This expansion, together with continuing lease activity, resulted in the annualised rental income rising to €407 million (H1 2021: €380 million). Occupancy remained high and stable at 95% during Q3 2021, the same level as during the second quarter of this year. The portfolio continues to maintain an attractive income duration of 6.44 years (Q2 2021: 6.46 years) and rent collection remained high at 98%. CTP’s market share in its core CEE markets was 25.4% at the end of Q3 as compared to 24.9% in H1, measured by its share of total market GLA in Czech Republic, Romania, Hungary, and Slovakia.
Active management undertaken in CTP’s CEE core markets achieved 383,000 m2 of space let in the period, including 5,700m2 to Lidl, 24,000 m2 to DHL (for Adidas), and the delivery of 75,000m2 to Maersk, operating the facilities for a leading Swedish home furnishing retailer. The Company’s strong and long-standing occupier relationships underpin retention and repeat business with leasing activity.
Absolute rental growth, especially in the Czech Republic, is now starting to catch up with Western European markets and higher rents are being achieved on new leases and lease renewals in response to growing demand and constrained supply. Recent CTP lease agreements in the Czech Republic show rents up to 10% higher than recorded at the beginning of 2021.
Delivering de-risked profitable development and expanding land bank to secure growth
CTP completed 161,000 m2 of sustainable developments in Q3, increasing year-to-date completions to 366,000 m2, of which more than 95% are let. The balance of the programme, representing some 527,000 m2 of GLA, was 79% pre-let at the end of Q3 (H1 2021: 71%). The Company is on target to complete 893,000 m2 of developments during 2021 and expects to build more than one million m2 GLA in 2022. Yield-on-cost was strong at 11.1% (from 11.8% in the first half 2021), despite continued cost inflation and shortages of construction materials.
Some commercial highlights include:
- Czech Republic: the completion a state of the art 68,000 m2 let to Loxxess for the e-commerce activities of a leading drugstore retailer.
- Slovakia: 95,000 m2 is under construction.
- Romania: the Company finished an 85,000 m2 mono-block building, handing it over to Kingfisher PLC on-time and on-budget.
- Hungary: CTP Park Vesces (where construction started in the first quarter of 2021) is now fully pre-let and 83,000m2 will be handed over in Q1 2022 to various tenants including JV Europe, the Korean logistics company.
- CTP’s top 10 parks: grew 6% YtD to 3.3 million m2 GLA with a further 1.7 million m2 landbank adjacent.
In CTP’s expansion markets a total of 125,000 m2 of developments are underway in Poland and Serbia. In Austria it is seeking building permits for three sites totalling 360,000 m2 outside Vienna.
At 30 September 2021, CTP had assembled a 16.3 million m2 landbank across all its markets, which offers development potential to more than double the current GLA of seven million m2, leaving the Company well positioned to continue to meet ongoing occupier demand. This demand is underpinned by structural tailwinds, such as the growth of ecommerce, digitalisation and near- and on-shoring. The company invested €108 million in its landbank, focused particularly on expansion markets. Notable acquisitions included 360,000 m2 of land adjacent to Schiphol Airport in the Netherlands; 99,000 m2 of land in Austria, two sites in Warsaw totalling 380.000 m2 and one plot of 180.000 m2 close to Poland’s western border with Germany.
Selectively acquiring strategically important accretive income producing assets
CTP invests in assets where it sees a strategic imperative to do so. This will either be in response to a customer requirement, adjacent to existing CTP properties, or to provide the Company with a foothold into a new country. CTP purchased nine investments for a total of €304 million across five countries in the first nine months of 2021. These acquisitions have added scale to the business in Romania, Hungary, and the Netherlands. The strength of the Company’s reputation and network enabled it to make most of these acquisitions off-market. The assets are accretive to the Company’s existing investment property portfolio with an average yield of 7.7%, compared to CTP’s portfolio yield of 6.9% (at 31 December 2020).
Strengthened balance sheet to support growth ambitions
In the third Quarter, CTP further improved its capital management and liquidity position by issuing a dual tranche green bond raising €1.0 billion. Aimed at pre-funding CTP’s 2022 development pipeline, the bonds were circa three times over-subscribed with interest from around the world from ESG-focused investors. One of the €500 million tranches was placed with a 5-year maturity, with the other carrying a 10-year term. Related to this, CTP successfully tendered €150 million of its debut October 2025 bond with a view to lowering its cost of debt whilst maintaining adequate liquidity by limiting the tender to reach a €500 million benchmark size for the balance outstanding.
Following CTP’s completed capital management and liquidity initiatives in Q3 2021:
- Cost-of-debt stands at 1.19%, the lowest amongst its listed peers, evidencing large support from institutional bond investors for CTP’s credit risk profile and business model.
- The average maturity of debt extended to 6.3 years (30 June 2022: 5.3 years).
- Cash and available liquidity stand at €1.8 billion, including an undrawn revolving credit facility of €400 million.
Positive outlook remains
Market conditions remain favourable, with rental growth and yield compression accelerating in all of CTP’s core CEE markets, which will impact positively on the portfolio’s full year valuation, the first to take place since listing in March this year. Company specific adjusted EPRA EPS for the full year 2021 is reaffirmed to be circa €0.50. The Company’s portfolio of prime, highly sustainable assets is set to continue to benefit from the fundamental shifts occurring within the logistics and distribution real estate markets as well as the Company’s approach to portfolio optimisation. It has a substantial development pipeline and landbank. All of which, when combined with the Company’s high-quality loyal customer base and its expanding talented and dedicated team, leave CTP well-positioned execute on its clearly defined strategy and to successfully deliver attractive, sustainable returns for all stakeholders.
Jan-Evert Post, Head of Funding & Investor Relations
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For the live presentation took take place on 17th November 2021 at 8:00am GMT click link bellow:
Webcast 2021 Q3 Earnings Update
CTP is the largest listed logistics real estate company by GLA in the EU, the biggest industrial property developer and developer in CEE markets and among the top five by area overall in Europe with over 6.6 million m² of owned logistics space and operations in nine countries. With its entire portfolio BREEAM certified, CTP ranks as the most sustainable developer in CEE region and is on track to reach net carbon neutrality over 2021. Since the end of March 2021, CTP is listed on the Euronext Amsterdam stock exchange.
Forward looking disclaimer
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and business of CTP. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “targets”, “may”, “aims”, “likely”, “would”, “could”, “can have”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. Forward-looking statements may and often do differ materially from actual results. As a result, undue influence should not be placed on any forward-looking statement.
This press release contains inside information as defined in article 7(1) of Regulation (EU) 596/2014 of 16 April 2014 (the Market Abuse Regulation).
 No revaluation took place on CTP’s income-producing portfolio during H1
 Annual rental income pro forma September 30, 2021 estimated per H1 2021 numbers
 Source: CBRE