MLP Group reaches EUR 945 million in assets

• Value of investment property increases to EUR 945 million (PLN 4.4 billion),+31% compared to the previous year
• Net asset value (NAV) increases to EUR 532.6 million (PLN 2.5 billion),+37% compared to the previous year
• Net asset value (NAV) per share is EUR 22.2 (PLN 104.1), +22% compared to the previous year
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) excluding revaluation amount to EUR 28.8 million (PLN 135.1 million), +47% compared to the previous year
• Funds from operations (FFO) totalled EUR 18.5 million (PLN 86.8 million), +59% compared to the previous year
• Net profit amounts to EUR 90.1 million (PLN 422.4 million)
• Rental agreements in 2022 for approx. 235,000 m²

Caption: Radosław T. Krochta, President and Chief Executive Officer of the MLP Group. Copyright: MLP Group.

The MLP Group, a developer, owner and manager of high-quality commercial, industrial and logistics parks specialising in brownfield sites, has a good financial position and a secure capital structure that enables the implementation of its long-term strategic goals. This is confirmed by the performance figures reported for 2022. The developer's net asset value (NAV) increased by 37 per cent to around EUR 532.6 million (PLN 2.5 billion). The value of investment property also increased by 31 per cent to more than EUR 945 million (PLN 4.4 billion). In terms of consolidated income, the MLP Group recorded year-on-year growth of 39 per cent to EUR 59.5 million (PLN 279.1 million), which is attributable to an increase in rented space and rental prices. While rental income from investment properties rose by 31 per cent to EUR 32.6 million (PLN 152.9 million), earnings before interest, taxes, depreciation and amortisation (EBITDA excluding revaluation of investment properties) improved by 47 per cent to EUR 28.8 million (PLN 135.1 million). Last year, the property developer generated a net profit of EUR 90.1 million (PLN 422.4 million).

Strong letting results in 2022

The MLP Group is expanding its activities on the Polish, German, Austrian and Romanian markets. The company's existing portfolio comprises 21 parks. The strategic goal remains the expansion of the logistics property portfolio through the development of logistics parks and urban commercial parks.

In 2022, the developer signed leases for 235,000 m². The new buildings with a total area of 226,000 m² were mainly completed in Poland and Germany. At the end of last year, the MLP Group had a total of 1 million m² of developed space, with a further 119,000 m² currently under development or in the pipeline. The development potential of the existing properties totals almost 1.8 million m². In addition, the company has concluded reservation agreements for the acquisition of new plots with an area of around 200 hectares, which will enable it to develop a further 1 million m² of new space.

Big plans for 2023

The high demand for logistics space in all markets in which the MLP Group operates is primarily driven by the trend towards nearshoring, the continuing demand for e-commerce and the restructuring of supply chains. Other key drivers of demand for logistics space are the low supply of available space and the fact that there are no signs that supply and demand will reach a balance in the short term. Rents are also likely to continue their growth trajectory.

The MLP Group intends to continue its strong development in Germany. It plans to strengthen and expand its presence in new key locations, but also in the regions where it already has a presence, i.e. in the Ruhr region, Brandenburg and Hesse. The developer also wants to gain a stronger foothold in the Austrian market and is planning to enter the Benelux market soon. The Polish market remains very important and the company will continue to expand its offering in key logistics regions. According to the strategy, capital expenditure (CAPEX) will amount to around EUR 215 million in 2023, of which around 30 per cent is earmarked for the acquisition of new properties. The level of commercialisation is to be increased by around 20 per cent this year.

"We continue to see strong occupier demand combined with vacancy rates close to historic lows in markets with limited supply. We expect this contrast between positive demand and limited supply to lead to a further increase in rent levels. We let 235,000 m² in 2022. Our total portfolio reached 1 million m² with an occupancy rate of 98 per cent across all our assets and the new space to be developed amounts to 119,000 m². In 2022, we successfully continued our efforts to diversify our properties (logistics and business parks), tenants and regions. Further development on the German market is a key element of our strategy. In 2023, we will launch new projects in Germany, Austria and Romania, while we will not slow down our development in Poland. Small and medium-sized enterprises and companies from the logistics sector were the most frequent tenants of our space in 2022. We expect this trend to continue - small and medium-sized companies and tenants from the nearshoring sector will be the main source of rental contracts in 2023," says Radosław T. Krochta, President and CEO of the MLP Group.

Good financial situation

In view of the current geopolitical situation and the high volatility in the economy, the MLP Group is well prepared for the current challenges.

"100 per cent leases indexed to the consumer price index for euros with no upper limit (indexation once a year in February). All rents are denominated in euros or expressed directly in euros, which significantly reduces our currency risk. The MLP Group has a good financial position and a secure capital structure, which enables us to realise our long-term strategic goals. With the low leverage ratio (LTV at 33.1 per cent), long average debt maturity of 5.1 years, no short-term refinancing requirements and virtually all debt at fixed or capped interest rates, we have significant financial flexibility to continue to invest capital in the development and acquisition opportunities that offer the most attractive risk-adjusted returns," adds Radosław T. Krochta.

The MLP Group also has a strong cash flow position. Last year, the LTV (loan-to-value) ratio was 33.1 per cent and the highest interest coverage ratio was 3.3x ICR. The developer had a long maturity ratio of 5.1 years. The operating result (FFO) amounts to EUR 18.5 million (PLN 86.8 million), which corresponds to an increase of 59 per cent compared to the previous year.

As part of its build & hold strategy, the company retains completed parks in its portfolio and manages them. All projects realised by the MLP Group are characterised by very attractive locations, the use of built-to-suit solutions and tenant support during the rental period.

About MLP Group S.A.:

The MLP Group is a developer, owner and manager of high-quality commercial, industrial and logistics parks in Poland, Germany, Austria and Romania, specialising in brownfield sites. The company currently owns and manages a property portfolio of 21 parks in four countries with a total size of approx. 1.66 million m² of existing and approved rental space ready for construction. The net asset value amounts to around EUR 533 million (Q4/2022). The MLP Group has been listed on the Warsaw Stock Exchange WSE since 2013 (ISIN: PLMLPGR00017).

With offices in Warsaw, Munich, Vienna and Bucharest, the company offers customised and sustainable real estate solutions for users from various sectors such as retail, e-commerce, manufacturing, automotive and logistics.

The MLP Group was founded in Warsaw, Poland, in 1998. The company has been represented on the German market since 2017 and currently operates projects at six locations in Berlin, Unna, Schwalmtal/Mönchengladbach, Gelsenkirchen, Idstein and Trebur. Further projects in the pipeline in Germany and Austria are planned in the regions of Berlin, the Ruhr area, Düsseldorf, Cologne, Frankfurt, Munich and Vienna.
Further details on the MLP Group can be found at www.mlpgroup.com

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