News Article financial report investment MLP Poland results warehouse
by Property Forum | Report

MLP Group's financial standing remains very strong, as confirmed by the posted results for 2021. Last year, MLP Group’s net asset value (NAV) went up 51%, to PLN 1.82 billion (€396.7 million). The value of its investment property rose 46%, to around PLN 3.4 billion (€752 million). Consolidated rental income (i.e. revenue from the Group's core business) was PLN 196 million (€42.8 million), representing a nearly 15% increase year on year. At PLN 632.3 million (€138.1 million), operating profit surged 112% year on year, with a nearly threefold increase in net profit, to PLN 480.5 million (€105.0 million).

The strategic goal of MLP Group is development in Poland and on the German, Austrian and Romanian markets. Also, the company is soon to expand its foothold into Benelux and Hungary. MLP Group offers warehouse space in the big box and business park formats (Urban/City Logistics).

"2021 was a very successful year for MLP Group, as reflected in our full-year results, including an increase in the property portfolio value to PLN 3.4 billion (€752 million), net profit more than PLN 480 million (€105 million), and a record lease volume. The leases signed by the end of last year will generate an annual rental income of about €36 million, up over 40% y-o-y. Demand for both industrial and logistics space remains on a strong upward trajectory. Some of its key drivers include long-term growth in e-commerce and the digital economy, trends to shorten and secure supply chains, as well as growing focus on sustainability. In the coming years, we will increasingly focus on Urban/City Logistics projects as a high growth potential product in the markets, addressing the retail evolution and digitalisation (e-commerce). With our established position in Europe, the extensive experience of our team and the constantly expanding portfolio of projects, we are well-positioned to further grow the scale of our operations in the coming years, although we still do not know the economic consequences of Russia’s invasion of Ukraine", said Radosław T. Krochta, President & CEO of MLP Group.

In 2021, MLP Group was developing projects for a total of over 310 thousand sqm, with a further 210 thousand sqm under construction or in the pipeline. Last year, nearly 310 thousand sqm of warehouse space was leased, which is about 50% more than in the previous year. Additionally, in the first months of 2022, strong tenants’ activity is noticed across all markets. At the end of December 2021, the leasable warehouse space offered by MLP Group was close to 1 million sqm, with the vacancy rate remaining very low, at under 3%. In addition, in 2021 MLP Group concluded several reservation agreements for new plots for further logistics parks in Poland and Western Europe. Based on the current land bank and reserved plots, MLP Group secured development potential for another 1 million sqm, with the area of the secured land of approximately 150 ha.

In line with its strategic goals, 2022 CAPEX budget was set at about €200 million, of which 30% will be allocated to plots’ purchases. We plan to lease 250 thousand sqm of the new warehouse space.

"Considering the current geopolitical situation and high volatility in the economy, we are very well prepared to face challenges in the near future. All lease contracts are indexed to European inflation rates. Thus, an increase in inflation causes an automatic increase in revenue. All rents are either denominated or expressed in EUR, which significantly mitigates our exposure to the currency risk. Furthermore, almost all our bank loans are hedged with IRS (interest rate swap) for the next 5 years, resulting in limited interest rates’ exposure. The geographical diversification of our business across several countries, combined with the diverse tenant base and the average lease term of more than 8 years, provides significant operational stability. We are also strongly committed to diversifying our energy sources by installing solar PV panels on all our warehouses and expect to be able to generate between 12 to 14 GWh of green energy in 2024. By that time, we also want to achieve a zero-carbon footprint. MLP Group’s strength is its secured land bank enabling us to quickly develop on European markets in the coming years and thus deliver our strategic goals", added  R. T. Krochta.

In line with its build & hold strategy, MLP Group retains completed logistics parks in its portfolio and manages them.