MLP Group’s Real Estate Portfolio Increases in Value

The financial situation of MLP Group, a developer, owner, and manager specializing in brownfield sites for high-quality commercial, industrial, and logistics parks, remains consistently strong. This is evidenced by the figures for the first half of 2022. In the first six months of the year, the net asset value (NAV) of the group increased by 26 percent to €491.0 million (€2.3 billion PLN).

(The value of properties held as financial investments amounts to more than €905.6 million (€4.2 billion PLN). This represents an increase of 25 percent. While consolidated revenue rose by 26 percent year-on-year to €25.8 million (€123.2 million PLN), net rental income saw an increase of 22 percent to €19.5 million (€90.4 million PLN). Operating profit amounts to €124.3 million (€577.2 million PLN), marking an increase of 181 percent. In the first half of this year, MLP Group achieved a net profit of €93.5 million (€433.9 million PLN), which represents an improvement of more than 2.5 times (+161 percent) compared to the same period last year.

“Despite the challenging economic and political circumstances, we had a very successful first half of the year. We achieved excellent results both operationally and financially. During the period, we signed lease agreements for 214,000 m², which is about 91 percent more than in the first half of 2021. This is our best leasing result to date. We are also seeing increasing demand for new and existing spaces across Europe, as companies are increasingly looking for a cost-effective way to enhance the resilience of their supply chains and production capacities by shifting from Asia to Europe. Together with the continued limited supply of suitable industrial and commercial space, this factor has led to an increase in rents. The rise in rental prices was significantly higher, at around 24 percent, than the increase in construction costs, which also positively impacted the results of MLP Group,” says Radosław T. Krochta, Chairman of the Board of MLP Group.

Real Estate Portfolio of Approximately 1.2 Million m²

MLP Group operates in the Polish, German, Austrian, and Romanian markets. It has a real estate portfolio of approximately 1.2 million m² of existing, under-construction, and approved rental spaces. The group currently operates 22 parks in four countries. Additionally, it has signed several reservation agreements for new plots in 2022 to develop more parks in Poland and Europe. Based on the current space inventory and reserved plots (totaling about 200 hectares), it has secured development potential for an additional 1 million m² of space.

Prepared for Economic Challenges

“I predict that we will face a challenging macroeconomic environment in the near future, as we have experienced in the past during economic downturns. However, as MLP Group, we are well-prepared for potential economic challenges. We have practically 100 percent of our spaces leased and have a very good diversification of tenants, both geographically and in terms of industry. All our lease agreements are linked to European inflation rates, which means that any increase in inflation rates automatically triggers an increase in our revenues. All rents are denominated in euros or expressed directly in euros, which significantly reduces our currency risk. Nearly 100 percent of our loans are hedged for the next five years through IRS, limiting interest rate risk. Furthermore, our focus on maintaining close relationships with our clients, our well-located properties, and our prudent capital structure provide significant opportunities for further profitable growth,” adds Radosław T. Krochta.

Development of Large-Scale Logistics Facilities

The strategic goal is to continuously expand the real estate portfolio through the development of large-scale logistics facilities (Big Box) and city logistics projects. In particular, MLP Group aims to continue its rapid development in Germany. Here, the project inventory is continuously expanding, especially in the Ruhr area, Hesse, and Brandenburg. The company also aims to strengthen its presence in the Austrian market. Additionally, the company is considering entering new countries, such as Benelux and Hungary. The Polish market remains very important for MLP Group, which will consistently expand its offerings in key logistics regions. In 2022, investments (CAPEX) will amount to approximately €150-200 million, of which about 30 percent will be allocated to the acquisition of new plots.

A particular focus of MLP Group’s activities is on sustainability and reducing CO2 emissions. As part of existing and newly emerging properties, a project for the installation of photovoltaic systems on the roofs of Polish parks is being implemented. The goal is to have 80 percent of the group’s projects certified with the BREEAM “Excellent” or “Very Good” certificate and, in the German and Austrian markets, with the DGNB certificate in gold or platinum by the end of 2022.

Retaining Completed Parks in the Portfolio

As part of its build-and-hold strategy, MLP Group retains completed parks in its portfolio and manages them. All projects are characterized by very attractive locations, the application of build-to-suit solutions, and tenant support throughout the lease term.

Photo: © MLP Group / Image Caption: Radosław T. Krochta, President and CEO of MLP Group