Industrial developer WDP saw a 15.2% growth of its rental income to €80.9 million in the first quarter of 2023 compared to the same period of last year, while its EPRA earnings rose 18% to €62.7 million in the same period, according to a company report.
In Q1, WDP delivered pre-let projects with a total lettable surface area of 200,000 sqm. The initial gross rental yield on the total of these completed projects amounts to 6.5%, with an investment amount of approximately €132 million.
The biggest volume of new deliveries was in The Netherlands with a combined surface of 127,700 sqm. In its industrial park based in Ștefăneșii de Jos, near Bucharest, WDP completed almost 48,000 sqm that was leased to retailers. Another warehouse spanning 25,000 sqm was delivered in Luxembourg.
At the same time, WDP has another 547,000 sqm under development, of which 92% is pre-let with an average lease term of 11 years. The developer added that its land bank covers 1.5 million sqm.
“There is sufficient interest and capital available for investment in logistics real estate given its solid long-term fundamentals. However, the market is recalibrating to find an equilibrium on returns in the investment market based on the increased cost of capital. This process goes hand in hand with the evolution and expectations regarding the interest rate cycle,” according to WDP’s report.
The company’s portfolio amounted to €6.64 billion in Q1 2023, compared to €6.65 billion at the end of 2022.
WDP mentioned that since Q4 2022 it has seen a high-level of stabilization for both construction prices and longer delivery times for new projects, while for new projects it is charging higher rents.
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