Industrial developer CTP recorded a net rental income of €268.3 million in the first half of 2023, which was up by 26.8% compared to the same period of last year, while the volume of new leases also rose.
In H1 2023, CTP signed leases for 850,000 sqm, with contracted annual rental income of €56 million, and an average monthly rent of €5.47 per sqm. The company said that two thirds of the new lease deals were closed with existing tenants.
The biggest leasing deals were closed in the Czech market. It included a 54,000 sqm prolongation with TD Synnex, 52,000 sqm with Inventec and 28,000 sqm with a German automotive firm.
CTP’s occupancy fell slightly to 93% over the delivery of a new project, while the group’s client retention rate remains strong at 92%. The contracted revenues for the next 12 months stood at €654 million at the end of H1, increasing at an annual rate of 21.5%.
“As occupier demand remains robust and the supply of new industrial & logistics space is decreasing, vacancies stay low, allowing us to continue to drive rental growth, with the rental levels of new leases that we signed in H1 2023 up 12% compared to H1 2022. The business-smart CEE region has seen strong growth in recent years and is expected to continue to outperform in the years ahead. The industrial & logistics sector in CEE benefits from structural demand drivers, such as professionalization of supply chains, e-commerce, and occupiers seeking to enhance the resilience of their supply chains through nearshoring and friend-shoring, with production in Europe for Europe, as the CEE region offers the best cost location,” said CTP’s CEO Remon Vos.
Vos added the decreasing construction costs and higher rents is pushing CTP’s Yield-on-Cost (YoC) for its development pipeline to 10.6%.
Average construction costs in 2022 were around €550 per sqm and CTP expects them to fall below €500 per sqm in 2023.
The developer is working on 1.8 million sqm of new industrial and logistics projects that have a potential rental income of €133 million. Around 65% of the new developments are in existing parks.
In 2023, CTP is targeting the delivery of least 1 million sqm and more if demand remains robust. The group has already leased 196,000 sqm in future projects for which construction has not started yet.
On the financing side, CTP has raised €811 million, of which €480 million is unsecured and €331 million secured. Its liquidity position reached €1.5 billion, while the investment property valuation rose to €11.0 billion, compared to €10.1 billion at the end of 2022.
CTP will pay an interim dividend of €0.25 per ordinary share, an increase of 14% compared to H1 2022. The company’s specific adjusted EPRA EPS amounted to €0.36 at the end of H1, on track to reach CTP’s guidance of €0.72 for 2023.
