P3 Group has released its condensed consolidated interim financial statements for the six-month period ended 30 June 2023. The company reported continued strong operational and financial performance.
P3’s portfolio increased by more than 380,000 sqm to a total of 7.9 million sqm GLA in the reporting period, driven by acquisitions and completed developments, and like-for-like occupancy remained very strong at 98%. Approximately 60% of the asset base is in Western Europe, with 40% in Central and Eastern Europe, spanning 11 countries. After the period ended, P3 entered the UK market where it now has two logistics assets under management.
Net operating income increased 21% to €205 million, driven by the increased portfolio. On a like-for-like basis, net operating income growth was 7%, thanks to the indexation of in-place leases and strong re-leasing spreads. The new effective rents have been 24% higher on average when compared to prior leases on the same space. EBITDA margin improved further to 84.5%, driven by portfolio growth, strong re-leasing spreads, and a focus on efficient processes.
Elevated return demands continue to impact real estate valuations, but in the logistics sector, the significant rise in rents has, largely, counterbalanced this effect. As a result, P3 saw a comparatively low decline in valuation on a like-for-like basis, of 2.3% the first half of the year. Including net investments, P3’s GAV remained stable through the first half of 2023, at €8.3 billion.
Two yielding acquisitions were closed during the first half of 2023, Campus 39 in Poland and Atlantic One in Germany, adding about 216,000 sqm of space to the portfolio. Additionally, approximately 168,000 sqm of new developments have been finalized during the first half of the year, and construction started for further c. 213,000 sqm GLA.
Frank Pörschke, P3 CEO, commented: “As we all know, the global economic environment poses challenges in 2023, but for the real estate logistics market, structural tailwinds remain in place and demand is still strong. Based on our strong operational and financial performance, we have conviction that P3 is well placed to capitalise on market opportunities. With the long-term strategic ownership of GIC, combined with our strong in-house operating platform, we have the capability and capital to continue our successful profitable growth path.”
P3 also recorded some significant financial milestones. In January, the company received reconfirmation of its Standard & Poor’s BBB Credit Rating with a stable outlook. As at the end of June, P3’s financial reserves remained robust, with a €750 million revolving credit facility fully unutilized. P3 has also proven its capability to source capital, with more than €1.5 billion debt raised in 2023 to date and additional capital contributed by its shareholders to support profitable growth while ensuring a strong balance sheet. P3’s LTV remains steady at 46.3%.
Thilo Kusch, P3 CFO, commented: “P3’s momentum continued in the first half of 2023, with continued strong financial performance, signalling that our long-term, value-driven approach is correct. Our financing strategy, designed to maximize operational flexibility while maintaining robust credit metrics, is working. At the same time, we have upheld our commitment to environmental, social, and governance matters with the publication of our first ESG Report in March. This outlined the meaningful progress we made against our ESG targets since 2022.”
