The value of the investment property portfolio of MLP Group is growing

The MLP Group Capital Group maintains a very good financial condition, which is confirmed by the published results for the first half of 2022. In the first six months of this year, the group increased the value of its net assets by 26 percent to the level of 2.3 billion PLN.

In the first half of this year, MLP Group generated 433.9 million PLN in net profit, improving its achievements in this area from the corresponding period of the previous year by more than 2.5 times (+161 percent).

- We have a very successful first half of the year behind us, despite the difficult economic and political environment. We achieved excellent results both in terms of operations and finance. During this period, we concluded lease agreements for 214 thousand sqm, which is 91 percent more than in the first half of 2021. This was our record result in leasing – said Radosław T. Krochta, CEO of MLP Group.

- We are observing growing demand for new and existing warehouse space of MLP Group throughout Europe, as companies are increasingly looking for cost-effective ways to increase the resilience of their supply chains and production capacities through onshoring, i.e., moving production from Asia to Europe. The persistent limited supply of high-quality industrial assets also translated into an increase in rental rates. It amounted to approx. 24% and was significantly higher than the increase in construction costs, which also positively influenced the achieved results - added Radosław T. Krochta.

The company operates on the Polish, German, Austrian, and Romanian markets. The real estate portfolio belonging to MLP Group amounts to approx. 1.2 million sqm of total leasable area in facilities that are ready, under construction, or have building permits. The Group currently operates 22 logistics parks in Poland and abroad. Furthermore, in 2022, it concluded several reservation agreements for new plots for subsequent logistics parks in Poland and Europe. Based on the current land bank along with reserved plots (200 ha), it can build another 1 million sqm of warehouse space.

MLP prepared for harder times

- I used to quote many sayings, one is commonly attributed to Mark Twain – „history does not repeat itself, but it rhymes”. I predict that in the near future we will have to operate in a difficult macroeconomic environment, such as we have experienced in the past during economic slowdowns or crises. As MLP Group, however, we are very well prepared for potential economic challenges. We have practically 100% of leased space, very good diversification of tenants, both geographical and sectoral. All lease agreements are indexed to European inflation indicators. The increase in inflation therefore causes an automatic increase in revenues. All rents are denominated in EUR or directly expressed in EUR, which significantly reduces exposure to currency risk. Practically 100% of loans are secured by IRS for the next 5 years, which results in limited exposure to interest rate volatility risk. Additionally, the focus on maintaining close relationships with our clients, a well-located land bank, and a secure capital structure provide us with significant opportunities for further, dynamic development - added Radosław T. Krochta

The strategic goal is to continuously expand the warehouse portfolio through the development of Big Box buildings and urban logistics projects. MLP Group intends to continue to grow rapidly, primarily in Germany, where it is systematically expanding its portfolio of projects mainly in the Ruhr area, Hesse, and Brandenburg. It also plans to strengthen its position on the Austrian market. Additionally, it is analyzing entry into new countries, i.e., the Benelux and Hungary. The Polish market remains very important for the Group, where the offer will be consistently increased in key logistics regions. In 2022, capital expenditures (CAPEX) will amount to approx. 150-200 million EUR, of which approx. 30% will be allocated to the purchase of plots.

MLP Group's activities are particularly focused on environmental protection and achieving zero CO2 emissions by 2026. As part of existing and emerging facilities, a project to build photovoltaic farms on the roofs of logistics parks is being implemented. The goal is for 80% of projects to have a BREEAM certificate at the Excellent or Very Good level and a DGNB Gold or Platinum certificate on the German and Austrian markets by the end of 2022.

In accordance with the „build & hold” strategy, MLP Group, after completing the construction of logistics parks, keeps them in its portfolio and manages them independently. All projects implemented by the Group are also distinguished by the very attractive location of the logistics parks, the use of built-to-suit solutions, and support for the tenant during the term of the lease agreement.