Hello, and welcome to the VGP half-year 2024 financial results. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have the CEO, Jan Van Geet, joined by CFO, Piet Van Geet, and VP, Martijn Vlutters, as our presenters. I will now hand you over to your host, Jan Van Geet, to begin today's conference. Thank you.
Yes. Good morning to everybody, and welcome to our webcast on the occasion of our half-year financial results, a publication thereof. I will just immediately go to the first slide, the highlights of the first half year. The picture you are seeing is actually something which I would like to talk a little bit about. It's our... At the occasion last year, when we bought a big part of the Opel facility in Rüsselsheim, right next to Frankfurt Airport, very close to Frankfurt Airport, we also have now made an agreement with Opel, wherein we are going to, which has been announced on the 8th June, on the occasion of 125 years of Opel in Rüsselsheim, we are going to build for them the Green Campus, which you see here, visualized, on the map.
I would just wanted to mention that. The highlights in the first half of 2024 are a pre-tax profit of EUR 154.6 million, and it's an increase of 218% versus last year. There is EUR 45.6 million worth of signed and renewed lease agreements during the first half of 2024, and this brings the total committed annual rental income to almost EUR 385 million. Meanwhile, it's already over EUR 390 million. So that was an increase of 9.7% year- to- date at that moment, so now it's more than 10%, and that includes a record EUR 28.7 million of new lease agreements signed, and that's an increase of 47% versus last year. We have 835,000 sq m under construction.
At the moment, 34 projects, which represent EUR 56.8 million additional annual rent, once fully built and let. And we've meanwhile started up a number of new projects, which have been pre-let, mostly, and in various other countries, and which we will then see. They have started after the thirteenth of June of this year. We have a land bank of 8.5 illion sq m, which represent a development potential of roughly 4 million sq m. After the acquisition of 375,000 sq m of new development land, and after the sale of our stake in the development joint venture, which we had in Moerdijk, and which we have sold 100% in the beginning, in the first half of this year.
Our gross renewable income increased a lot, by 31% to EUR 3.8 million, despite a significant fall in energy prices, and that's driven by the increase of our photovoltaic capacity with 115% YoY . Our operational capacity, because it always takes a little bit of time before it's connected to the grid, is now 143.3 MW peak versus 66.6 MW last year in June. We have a very solid balance sheet at the moment, with a total cash available of EUR 625 million. We have also EUR 400 million of undrawn credit facilities available.
The gearing ratio reduced from 40.3% to 32.7%, and we also had closing with Deka, which just happened this month, which brought in another EUR 68 million of net cash, which was effectuated in August. So the net cash recycling of EUR 662 million this year, as a result of closings with Deka and Areim. And if you look overall, the closings since 2022, the year when everybody said, "Ah, Allianz is gone," we have recycled more than EUR 1.7 billion in effective cash proceeds out of new joint ventures and existing joint ventures, which we have.
After the balance sheet, we repaid EUR 75 million of bond debt that was due in July 2024, and we lowered thus the cost of our debt from 2.25% in the first half to 2.21% following the repayment. I will go a little bit over the market update because I find it. We have had a very successful year thus far in signing leases. There is a lot of questions about the market. We're very confident on the second half year, or I am very confident on the second half year. I believe that we were going to close the year well over EUR 400 million of contracted annualized rental income.
You can see the demand, which has been fueled during the pandemic years, a lot by e-commerce, which has virtually now a little bit gone out of the market, has returned to stabilized pre-pandemic levels. We find it's still a very healthy occupier market, where there is still a lot of demand. You can see it also; we signed EUR 28.7 million of rental income. The occupier segment, for us, speaking for VGP, you see it's a lot of third-party logistics, which are the main driver of the occupier groups. But for us, certainly manufacturing has been a very big uptake, and you will see it later in the presentation. I have some examples. The vacancy rates, they edge up. It's now approximately 5%.
We are more than 99% let on our existing portfolio, and I think it's gonna remain like that for the remainder of the year. We have no big switches coming up. There is no signs of anybody leaving, so I think we'll, for the remainder of the year, remain very well let, and it's mostly older stock, which is a little bit getting vacant. But I think it's also healthier that there is a little bit vacancy on the market, and that we can start seeing a little bit of growth again going forward in new leases. On the supply, what we now see is that the speculative part of supply is coming down. It's from 43% in 2022, it's now only 36%.
Where we think it's gonna go next, and we have the same view as Jones Lang LaSalle in that there is more intense land regulation. The construction costs have come down a lot, but it's really the ESG requirements which are now put on the buildings make them more difficult, more expensive to build. And we think that the development pipelines will remain a little bit restricted, so there is a healthy margin for us ahead, going ahead in our construction. With a very good land bank which we have, we think we have a nice future in front of us. So the logistic prime rents have cooled down a little bit. We still see an increase in many of the markets.
To give you an idea, what we have relets this year is at 8% higher, 8.6% higher than the leases which we had before. So our rental price has come. There is rental growth. It has gone up, but we see it's in some markets, it's decreasing a little bit, and in a lot of other markets, it's getting more stable. On the capital markets, we have done quite some portfolio deals, and we are seeing that there is a higher appetite coming back between the investors. We are talking to many people about our joint ventures, and our existing joint venture partners have all expressed.
We also plan a next closing with our Areim portfolio in the second half of this year or maybe early next year. But we see still a lot of appetite on the market coming back also, and especially for our buildings which we have in our portfolio. On the leasing activities, the building you're seeing on the screen is in Valencia, in Cheste, with the big racing track behind it. That building has been leased now fully to JYSK, the Danish bed and lager company. So as I already said, it's increased by 10% year- to- date, more than 10% now, with a record of EUR 28.7 million of new leases during the first six months.
We have 565 tenant contracts with 396 tenants, so there is a lot of tenants which have repetitive buildings with us, which have more than one lease agreement or many lease agreements. The committed annualized leases amount to EUR 385 million. At the year-end, it was EUR 351 million. As I already said, the occupancy rate is 99%, and that is stable. My brother likes to make bridges everywhere, so there is also a bridge of the committed annualized rental income. There, you can see that the new leases account for EUR 28.7 million. There was EUR 7.7 million of indexations, and we had EUR 0.6 million of amendments to existing lease agreements, people who wanted to have some extra space, which we fitted out.
We had EUR 3.1 million of terminations, and then we come to EUR 385, roughly, million of committed annualized rental income at the end of the first half, which is now already more than EUR 390 million. I've been preparing our company, and I speak to most of the investors, co-investors inside of VGP. I've been preparing our company a lot to be able to accommodate for our customers to do relatively complex projects in a simple way. So more than 70% of our, or 70% of our employees today are engineers, and they're qualified to do things which are more and more intense in robotization and automation. And we really want to take away all the sorrows which you can have around a building, which is complex regulations and building permits, et cetera.
As a result, you can see we have in these markets also a lot of light industrial clients. This doesn't mean that these are bespoke buildings. They are our normal standardized buildings, but the inside, of course, we try to integrate and to accommodate our customers as much as we can by helping them to fit it out. Now, there is a couple of examples which we have here of the nicest lease agreements which we have signed. Mutti, I'm sure most of you know the tomato cans out of Parma. We have leased a 50,000 sq m to them in Parma. It's under construction now. We just started the construction. Hyundai Mobis, it's a battery plant which we are building for them in Pamplona. You will see a picture of it later on.
Isar Aerospace, it's a competitor to Elon Musk's SpaceX company. They are going to launch a rocket now into space from Norway later this year, to do, how you call it?
Satellites.
Satellites, yeah, to place satellites in the orbit. One of their investors is now also NATO, which has just joined inside of the capital round. Verne, it's a fantastic new project around automotive driving, so robots, robot taxis, which we are doing together with the Rimac Group. Fuyao Glass is a supplier for Mercedes, glass in Kecskemét, in Hungary. And VAT, it's vacuum valves, a very nice new plant which we're building for VAT. All of these are very long-term lease agreements, and with a very strong covenant on top. Our portfolio is also leased long term, it's still 7.8 years.
I have the feeling that every time I do a presentation, it's 7.8 years, but it's also a sign that we are signing on every year a lot of new lease agreements with long-term leases, which is, for us, the main part, and it's very well spread. The risk is very well spread. You can see 43% is pure logistics, e-commerce is about 19%, and the light industry is 37%. We see e-commerce coming back from next year on, or maybe the year after. We see them now filling up all the gaps they left empty in our portfolio when we leased to them. They first wanted to sublease, but we see now that they are really taking up the space and really starting to use it.
So we are very confident that once at a certain point in time, they are going to come back with new growth profiles, and it will be sooner rather than later, I think. Our top ten tenants have 30% of the committed leases. It used to be a lot more. They have a combined WALT of 9.9 years, and the top ten tenants is 23 different lease agreements. So it's also there we have them. It's not all concentrated in one or two buildings. It's mostly more than two leases. Another bridge, and this is a very nice one. This is our activated rental income, so rental agreements which really generate rental income already, which have been delivered to our customers and for which they are paying rent.
At the end of last year, we had EUR 304.3 million on a 100% basis of net rental income, activated, out of which EUR 80.8 million was in our own portfolio, and EUR 223.4 million was in the joint ventures. We added EUR 22.9 million. That's the things which we have delivered this year and which have started paying rent, so that comes to EUR 327.2 million in June 2024. There is another EUR 57.5 million leases which are going to be activated in the next 6-12 months, which are under construction, maybe a little bit longer. That brings the total to what we have contracted now, EUR 385 million. It's a little bit more already, as I said.
What is really nice about it, if you look at it, EUR 109.8 million sits in our own portfolio, EUR 275 million meanwhile in the joint ventures. But on a proportional basis, we have a EUR 250 million annualized rental income, and our income is getting more and more recurrent if you look at it, which is. It's very cash generative at the moment. Our net rental and renewable energy income grew with 20.2% YoY . As Martijn already said, or as Martijn said, told me, the energy prices have come down a lot. Despite that, it's grown steadily.
You can see the rental income also in the first half year, including, I mean, including the energy, the rental income has gone up 20%, and it's now EUR 91 million of net rental and renewable energy income on a look-through basis. Our portfolio virtually let on a long time basis. As I already said, you see here the 10 biggest customers. Maybe just to give you an idea, between these 10 biggest is also, you can also see Opel and Siemens. Both are brownfields which we bought. Both do a sale-and-leaseback operation for a couple of years, which allows us to, in the meantime, get all of our permits ready and to do the next step.
Both of these sites should generate a lot more rental income than they do today because the rental prices which we negotiated on the old buildings are really very low. So that's just to frame it. On the delivery side, the building which you see is a very nice building in Magdeburg, which we delivered to one of our top tenants, to Rhenus, earlier this year, and which has meanwhile also been transferred inside of one of the Deka joint ventures. So we delivered eight buildings, 264,000 sq m, all fully let. That's EUR 17.2 million rental income, 10 new contracts, and most of them are BREEAM Excellent, except a few exceptions, which are BREEAM Very Good.
Going forward, we are only going to do BREEAM Excellent buildings to deliver in, or better, to deliver in our portfolio. The two pictures you see, one is in Belgrade, Serbia, where we started last year. You see, the main warehouse of Delhaize Group, Ahold Delhaize Group, in Belgrade, which has been delivered to the customer. And the other picture is our VGP Park Gießen am Alten Flughafen, which has also been transferred into the Deka joint venture, and that is the building which is operated by Zalando, which will go in operations later this year, and they are fitting it out. They are doing their fit-out at the moment.
The largest share of new developments which we delivered are tenants active in logistics, so that's Ahold Delhaize and the Rhenus Logistics. But of course, e-commerce has been a big one, is a big one in the delivery, thanks to the Zalando and Picnic deliveries which we did, and the light industrial relates to H&M and the Nissens, which are H&M in Hungary and Nissens in the Czech Republic. I have some examples of things we delivered. So we bought a couple of years ago, also a brownfield in Heidelberg, in Wiesloch, Walldorf, just right next to Heidelberg. It's Heidelberger Druckmaschinen, that we delivered the first building to Picnic, and we have a lot more to develop.
We have about 30, we have about 21 hectares, which we can deliver, which we can develop, and 125,000 sq m, so another 100,000 sq m to go. In Gyöngyös, we delivered our building to Apollo Tyres and H&M. We are expanding the park also because it's really very successful. In Gießen, we delivered to Zalando. You can see it here. It's one of our biggest developments which we ever did. In total, it's over 100,000 sq m its 251,000 sq m in total, and the park is completely let, ready, delivered, and operational for our customers. In Magdeburg, we delivered to Rhenus. As you can see, it's a 75,000 sq m facility. It's a big one. In Zvolen, that's a smaller one.
It's a regional city in Slovakia. We delivered also our building, the building with the green roof, which is fully let to Packeta, which mostly is Packeta, which is a e-commerce provider. And our portfolio, including the joint ventures, with all these, deliveries, has grown organically at an annual compounded growth rate of 27.5%, and we aim to keep that pace if we can. It's shown really resilient growth, and, this is measured since 2016. Now, VGP exists since two thousand- since 1998, when I founded it first. But you can see that the biggest growth part has been, it's growing ever faster with the new countries which come to it, and I hope to be able to say that this will... is a trend which will go, continue.
The total investment property today on a 100% basis is more than EUR 7 billion, EUR 7.4 billion, which we have under management. It's very well diversified geographically. Of course, Germany is a big chunk out of it, it's almost EUR 4 billion of that is Germany, which has been always the biggest contributor to our growth and will also be this year. Western Europe represents 75% almost of the total portfolio value. We have the investment portfolio exists of EUR 6.1 billion of completed assets, EUR 540 million of assets under construction, and development land of around EUR 746 million, or that's 10% of our total balance sheet. On the development side, what you see in front in the picture is our building in Rouen.
Left is the Seine, and that's fully let, that building to Sénalia, a local player out of Rouen. We bought the land plot last year, and we are constructing now. We just started a new building, which is also already partly pre-let to Ziegler. So the portfolio under construction represents EUR 57 million of new leases, approximately, once it's fully let. Yeah, it's 835,000 sq m, as we already said. We have started up, in the meantime, a couple of buildings. We've delivered also a couple of buildings, so it will be another number at the year-end. But it's now well over 70% pre-let.
And we always measure because we have a construction time of about 12 months, and we start. When we start a new park, we also always start the first building speculatively, hence we have a little bit more. But I am very confident. We see so much demand. There is so much things for us in our portfolio under negotiation at the moment, that I am confident that we will be well over EUR 400 million of contracted rental income at the year-end and without any significant vacancies in our portfolio. We also have very good construction prices at the moment, so we feel very confident about that we are building the right value for our money. And also, here, Western Europe represents the bulk of the portfolio under construction at 60%.
Yeah, our developments are ongoing. With the exception of the Netherlands, we have everywhere now, I think, buildings under construction. You can see it, it's very well spread. And I have a little bit of examples which are there. This building has meanwhile been, it's going to be delivered in a couple of weeks. It's our park in Valencia, Cheste, a building which we also started speculatively in the end of last year. It's virtually completely delivered now, and it's fully let to JYSK meanwhile, before completion, so that's already gone. We have our VGP park in Martorell, where we are in final negotiations with the tenant. It should be signed in the beginning of September. It's a small building, 10,000 sq m. martorell is in Barcelona.
We are, we have a new construction started. You can see it from the picture; it's just the foundations that are now ready. In Seville, Dos Hermanas, we have partly pre-let that building to Metro, the Metro Group. Pro a Pro is Metro, and we have a lot of demand for the rest of the building, so we just started, so we're confident that it will be leased out soon. We have started in Pamplona. That's just now. We just received our building permit on the fourth of July, so it was just after we finalized our half year, and the building is well under construction now. The frame stands up, and that's the Hyundai Mobis. It's fully let, completely, 50,000 sq m to Hyundai Mobis. The same goes for Parma Paradigna.
We also just started it up now. It's also a 50,000 sq m, and it's also fully let to Mutti on a long-term lease agreement, for their warehousing solution. The same goes for Legnano. We just started it up. It was a brownfield, for which we had to wait a little while for the building permit. We've finished the demolitions, and as you can see on the picture, we have just started with the groundworks. We already pre-let part of it. We already have two lease agreements in place, and we are negotiating with one tenant on the rest of the building, on the bulk of it. So, that's in Milan. It's a top location in Milan. Next year, there will be another top location in Milan, which we're going to start, for which we are now waiting for our...
It's in Paderno, and I hope to be able to start also quickly. Also in Verona, we should be able to start next year, where we have now our final permit finally available. In Leipzig Flughafen, that's a new park. It's a big one. It's 50 hectares. We did the Bebauungsplan, so the zoning plan, completely, and we can now start. We started our first construction. Our first lease agreement is very imminent to be signed with a tenant. We can build there 225,000 sq m, so still a lot which we can construct in Germany. And we just started our first building. As it's a new park, we always start the first building speculatively, but as I said, we have a good demand for it.
Béta has been started in the beginning of this year. It's fully let to Transdanubia. It was a pre-let, and Transdanubia is going out of another building, where they had 12,000 meters, and also that unit is already re-let. It's going to be taken over by the next tenant in November. [Matterhorn] is that. In Bucharest, we also started a new building. You can see it's one of our nicest parks. Also Brașov, I would say that our park in Brașov is maybe one of the top five in the whole VGP collection. Also here, we have mostly pre-lets already, and the main tenants are DHL, Temad , and Amigo & Intercost . It's a large building, also 26,000 sq m, going very well.
On the land bank, which is an important feature, you know we can construct roughly 4 million sq m on our land bank. That's not doubling. We have already more than 6 million sq m, but it's a huge size which we can still construct on it, and we're constantly working on new acquisitions. Our land bank is. We started the year with 8.5 million sq m. we acquired, during the first half, 375,000 sq m. we deployed a little bit more than we acquired. We deployed 500,000 sq m and built four new buildings. We sold our Moerdijk park 720,000 sq m. I sold that one because of the concentration which there is in the part...
Lidl bought part of the Moerdijk portfolio, and they operate almost 400,000 sq m in the vicinity, which is going to move to Moerdijk, and then there will be a huge competition on the market for existing space. That is the reasoning behind why we sold it. We sold it with a nice profit, a very nice profit on it, so that's gone, and we have. We reinvested that money in other properties. So we own 7.7 million sq m at the end of the first half of 2024. We have around 750,000 sq m, which is committed to buy once we receive the permit.
So it brings the land owned and committed in the first half to 8.5 million sq magain, and we have another 317,000 sq m under option. So that's a bit, what our land bank is. On the left, you can see the works of VGP Park Leipzig Flughafen, which have just started. The land bank is geographically well diversified across all the countries where we are active, and as I said, in all the countries which you see, we are also under construction, except for the Netherlands, where we aim to start up a new building later this year, at the latest, in the beginning of next year. I have some examples of where we have expanded. Kecskemét has been a huge success for us.
We have a lot of buildings, which are already the ones here, and here, it's all VGP Park. So we have bought this land plot, on which we have now signed two lease agreements. One is already signed, one is going to be signed next week. One is with Fuyao Glass, and the next one is going to be with Univer, and they, they. So they will occupy all of the land plot which we have bought, will be completely leased before we start construction. In Vejle, it's right next to Billund in Denmark. Denmark is our new startup. We have acquired this year the land in Vejle, and we have also signed immediately our first lease on it with a local production company.
So that building is going to be started up now, as we speak. I think the groundworks have just started last week, and that's already partly pre-let. In Split, Croatia has been a very good market for us. We have started our first building in Zagreb, and which we also bought, and in Split, we did a new acquisition where we registered a lot of demand from the local retailers. So there we also bought nineteen hectares, almost, of land, just acquired a couple of weeks ago. We also acquired our new land plot, where we also did the zoning plan in Bernau, Berlin, where we also registered a lot of demand for. We will start construction later this year when we get our building permit, but we have the zoning permit now. We think it's a very good location.
We can build up to 70,000 sq m there, and we have good news on La Naval, so I already presented a couple of times. Everything has been demolished. We have the permits in place now, so we can start construction in the beginning of next year. We are tendering at the moment. You can see well the difference between how it looked like a couple of years ago and how it looks like now. All the structures above the ground have been demolished, and all the contamination has been solved. We are ready to start, and we can build 110,000 sq m in the heart of the Basque Country in Bilbao, with very close to the city center. We believe it's a top location. Our flagship new project is our VGP Park in Rüsselsheim.
We have signed with the city, meanwhile, all the planning agreements. We are working on it very hard in our own region. We are currently planning together with Opel to build a new Green Campus on this plot of land, and that will be normally, we should be able to start construction, to start the demolition later this year, this year still, and to start construction early next year to build the new Green Campus, which is a 20-year lease for the very big, new buildings on site. There is a new engineering and design center which will come here. It's been presented to the large public at the moment when Olaf Scholz visited the plant at the occasion of 125 years in Opel.
We also bought this, the M-A real, and we bought the whole of this, and we are currently negotiating also with a couple of industrial tenants on various new occupations inside of these land plots. Which goes a lot faster than we had anticipated because there is a sale-and-leaseback for three years, but we think we can release already part of it earlier so that we can sign our first leases still this year. And it's a big one. It's also we can construct almost 300,000 sq m on this park. It's a really nice location, and we think it's very close. You can see how close it is to the airport. The airport is under the VGP logo. So you can see it's really very, very close to Frankfurt Airport.
It's a top, top, top location. In Nuremberg, we also bought a Siemens site. You can also see that it's really, really very well connected to the highway, and you drive straight into the city of Nuremberg. This is our land plot, and it's leased until the end of 2026 , and then we will be able to to demolish it and to restart a new facilities, for which we have already a lot of interest from potential tenants. But Siemens really want to stay in until the end of 2026 , so we will do it afterwards.
Then in Vélizy, the land plot which we bought last year, and I know I'm talking a bit long about it, but I want to show you our pipeline and the enthusiasm for what we are doing. We create new things. That's nice. In Vélizy, we are taking over now the premises from Stellantis. We are starting the demolition still this year. It's already been tendered out, and we can build up to 80,000 sq m in a top location in Paris. It's very close to Versailles, so it's a really top location. We also bought Mulhouse, which we're also going to start later on, where we have a part of the Stellantis facilities and where we can also construct 95,000 sq m, roughly.
So, France, all in all, having started just very recently with two buildings under construction in Rouen and two new land plots which have been bought already and a couple of other under negotiation, it's really our management has hit the ground running, and they're doing a very good job in doing new developments in France. A last thing, the renewables. The installed solar power increased by 115% YoY . So the gross renewable income over the first half was EUR 3.8 million versus EUR 2.9 million over the first half of 2023. The total electricity production has increased a lot, and now we also have the license to supply energy in Germany to our customers, so we can sell electricity. And hence, we have also launched our first battery project.
You know that the energy price is fluctuating a lot in Europe. Certainly, when the weather is very good, and the solar panels are all contributing, when the energy price goes negative, we will put it in our batteries, and when it goes positive, we will deliver it back as green energy to our tenants. So we can also not only lease solar panels to our tenants, but we can also now provide them the green energy, which we have already signed a couple of contracts on it, which gives us a lot more flexibility and a lot more potential on our ESG targets going forward. Yeah. The joint ventures, so the building which you see here, the drone. The construction is starting now. We will have the building permit at the end of this month.
That's the Isar Aerospace new building in Munich. This is our park in Munich, where we have BMW, who is doing their. They make their battery plant here, and this is KraussMaffei, with one of the largest solar panel installations on the roof of buildings in Germany to date. That's going to start, and that's in our joint venture. We are doing this together with Allianz to develop the new Isar Aerospace building. It's just started. On our joint ventures, the only thing which I wanted to say is it's working really very well. The model, it's still intact. We find a lot of appetite to join up with us from our existing joint venture partners in the first place, but also from other people.
Since two thousand and twenty-two, we recycled over EUR 1.7 billion of net cash out of these joint ventures, which enabled us to just continue in our growth like we are. And it, we have a very solid balance sheet, thanks to the model today, with more than EUR 1 billion of liquidities availability. We had EUR 625 million cash at the mid of the year and EUR 400 million of undrawn credit facilities available. So, from that point of view, we want to say thank you to all of our partners. It's working very well, and it's a very good cooperation. A small word on it, more in detail. Deka. The Deka joint venture, the acquisitions have now all been completed.
We did a joint venture agreement with them in the beginning of 2023. The joint venture has now completed all acquisitions. The last closing occurred last week and generated EUR 68.1 million of cash proceeds. Deka has acquired 50% stake in 5 project companies owned by VGP in Gießen, Laatzen, Göttingen, Magdeburg, and Berlin-Oberkrämer. 20 buildings, EUR 53.6 million of rental income, and we do 100% the asset management of that joint venture, and we believe there is a lot of appetite to do more. Saga is the new joint venture which we just started with Areim.
We signed at the end of last year this new joint venture with the aim to invest together almost EUR 1.5 million, no, Piet, of gross asset value?
Yes.
Yes. We've defined the pipeline for that. The LTV will... Of the, of the pipeline, it will be around 35%. The investor has a committed equity ticket of EUR 500 million, and we have executed already our first closing. 17 buildings, 450,000 sq m of lettable area, EUR 23 million of annualized rental income is that, with a 100% occupancy rate also. The transaction was valued at EUR 437 million, and it allowed us to recycle EUR 270.2 million of net cash proceeds, so that worked very well, so far. The building you're seeing, again, is the building in Rouen, which will be transferred later this year, probably also into that new joint venture. I'm going to hand over the word to Piet to make a summary of our financial performance for you.
Thank you.
... Thank you, Jan. As always, I have prepared a slide deck, including the PNL, the balance sheet, cash flow, and some insights in our debt position. But as Jan already mentioned before, we are very happy to report a net profit of EUR 141.5 million , or EUR 154.6 million before tax, which is a 308% increase versus the first six months of 2023. As always, our PNL is a reflection of a lot of things that occurred during the first six months: transactions, new deliveries, revaluations, realized gains. So I'll take a step-by-step approach here, gold line, going through the main points and explaining where it all comes from.
First of all, if you look at our net rent and renewable energy income, it's relatively stable at around EUR 33 million. But in reality, the rental income that is generated is from a completely different portfolio as what was generated in the first six months of last year, because obviously, we have done quite some disposals to joint ventures. In fact, we've done a transaction in H2 last year with Deka, and in H1 this year, with Deka and with Saga joint venture, so that was EUR 71 million of annualized rental income that has been disposed to, been removed. From what has been disposed this year, there was still eight million of rental income, and then in April, I think in May, it has been disposed, but until then, there was eight million.
So, but the underlying rental income is, by coincidence, actually almost the same as it was in previous period, but it has been generated from a completely different portfolio as we have been delivering a lot of new assets. Maybe it's then also more important to look at our net rental and renewable energy income on a proportional basis, though. If you look at it, what we own 100% and what is inside of the JVs, where we own typically 50%, if you take all of that at share, then it increased from EUR 75.6 million to EUR 91.6 million, or an increase of EUR 16.1 million.
The second point or the second part of this net rent and renewable energy income is effectively renewable energy, which Jan has already a little bit explained, that we have a considerable increase of capacity installed, generating revenue income. That has also led to an increase of 31% in the revenue, up to EUR 3.9 million, but it has been partly offset by lower energy prices and also lower energy production due to the solar revenue that has or could be generated from the panels. If we go to the next point, the joint venture management fee income that increased with EUR 4 million from EUR 11.7 to EUR 15.7. This joint venture management fee is always composed of basically two components.
One is an asset management fee that we charge to the joint venture for managing the JVs. As the JVs have grown, there are more assets in. Our asset management fee obviously increases, and this increased from roughly EUR 10 million to EUR 12.7 million, and this will be recurring, and it will continue to increase as we have done transactions in the first half, by which we will have an annualized effect in the future, and we will continue to do, obviously, disposals to the joint ventures. The second component of the joint venture management fee is our development management income. So it happens that in the completed portfolio of the joint ventures, there is some works to be done.
If we release something, an additional office to be constructed, then we obviously coordinate all of this work, and they come on top of the asset management fee that we charge, and this also increased from EUR 1.3 million to EUR 3 million. I think the next line in our PNL is probably the most defining of it all. That's an increase from EUR 45 million to EUR 99.1 million in net valuation gains. Easily summarized, it is basically the revaluation of our own portfolio was completely flat. We had a EUR 1.5 million effect of that on the total portfolio that we have and was revalued between end of last year and 30 June, which then increased with roughly EUR 34 million of profit that we have on our developments that we have initiated during this year.
We realized an additional gain, sorry, we realized an additional gain of EUR 63.3 million on all of the transactions that we have effectuated, and that includes then, Deka, Saga, and also our disposal of the Moerdijk joint venture in February of this year. I will come back on the revaluation of the joint ventures on the next slide. But first, we have the administration expenses, where we see an increase from EUR 21 million to EUR 28 million. Roughly, the FTEs were stable year over year, but we have seen some, as we have been profitable, of course, we have some extra provisions allocated to the LTIP. There is some inflation in the wages, but also there is a higher depreciation component of EUR 1.5 million.
That is because the renewable energy is at cost on our balance sheet and being depreciated, and if we take more assets completed, we start depreciating them, so that is a component that increases. And finally, there is also a EUR 1 million more expense because we have capitalized less project time on projects versus the first six months of last year. I think a very important contributor is the next line again. Last year, it was a loss of EUR 12.8 million, mainly to negative revaluations in the joint venture portfolio. As you can see, now it is a positive contribution of EUR 33.7 million.
I have taken the liberty of taking that share in the result of joint ventures line in the table below, where you can see the components of these EUR 33.7 million net profit at share, which we have in the joint venture. So there you can see the net rental income, for instance, at share, went from EUR 42 million to EUR 58.7 million, or an increase of 39%. Whereas we had a loss on the investment property and revaluation last year of EUR 40.7 million, we have now a profit of EUR 8.6 million. Again, the joint venture portfolio was very stable valued. Also, the average yield of all of the JVs, knowing that there are some extra assets in, of course, as well, in the first half disposed to the joint ventures.
Nonetheless, it remained quite flat with 5.01%, and now it is 5.08%, the weighted average yield of the JV portfolio. There are some more net financial expenses, so from EUR 13 million to EUR 24 million at share. That is obviously also because there is more depth on the JVs, and partly also the Deka JVs is, let's say, structured in a way, having a little bit more shareholder loans than in the Allianz joint ventures or the Saga joint ventures, which then also expressed a bit more in interest expense, which then in our P&L obviously is interest income, and you will see it popping up again in the cash flow statement later.
Nonetheless, EUR 46.5 million more profit contribution from the JVs last year, and a very solid operational performance inside of the JVs. Next line, the other expenses is a contribution that we have provisioned for our VGP Foundation. We hadn't done that in the last year. We have done this now in this year again. So that brings us an operating result, an increase from EUR 56.7 million to EUR 151.7 million. And then, very interestingly, our net financial result in our own consolidation was an expense of EUR 8.1 million in the first half last year, and now it's an income of EUR 2.9 million.
That has everything to do with the fact that we have quite a substantial amount of cash on hand, so we had EUR 4 million more interest income from cash on hand on deposit accounts. We had EUR 11 million more interest income from joint ventures, which you actually saw also more or less at share coming back in the proportional consolidated income statement of the joint venture. And we had less interest expense to pay to our debts, because we, in the second half of last year, repaid amount of EUR 225 million, which had roughly a 3.9%, I believe, interest expense.
And in February this year, we took up a new loan of the European Investment Bank of EUR 135 million, so net much less debt, and that was also at 4%, so we saved EUR 2.9 million on interest expenses. Resulting thus, as a fact, that we have now a net financial positive result of EUR 3 million, almost EUR 3 million . And I always like to mention it, although it's not really in a table on the slide, but we have, of course, the holding company, VGP NV, which really realizes the historical gains, because that is all at cost booked there, and there we have a profit of EUR 175 million or also an equity of EUR 1.6 billion .
In terms of EBITDA, and VGP looks at its model in three business segments: the investment, the development, and the renewable energy. They have a combined EBITDA of EUR 182 million , which is up 68.1 million or 60%, so a significant increase, and pleased to report that this can be noted in the three segments. Let me start in the middle. The development basically shows everything what we realize in the development. So what is under construction and all our assets which are on our own balance sheet, are being fully revalued there. The realized gains that we have there, we take a share of the admin expenses, and that EBITDA increased from EUR 27.9 million to EUR 80 million .
We have a CapEx of roughly of EUR 223 million, and this entire segment represents about approximately EUR 1.4 billion of assets. Once it has been the asset has been completed and disposed into the joint venture, it comes in the column on the left, the investment. So there you see the net rental income of the completed portfolio. You see our joint venture management fee income, which I already explained to variance on . And then you see our share of JV's adjusted operating profit after tax. This is basically the share in the joint venture's result, excluding any revaluations. We don't revalue anymore in this investment contribution EBITDA segment. And this represents a total asset of EUR 2.4 billion.
And then last but not least, renewable energy, that had an EBITDA increase of EUR 1.5 billion and a total CapEx of approximately EUR 8.1 million, but a good contribution of our three segments in the first half of this year. Brings me to the next slide, and that is our balance sheet. The total assets and/or total liabilities increased from EUR 4.4 billion to EUR 4.6 billion. The big movements here, what you can see, investment property went from EUR 1.5 billion to EUR 1.7 billion. It represents a completed portfolio of EUR 777 million, assets under construction of 500 million, and development land of EUR 670 million. It has been valued at a weighted average yield of 7.6% versus 7% per December 2023.
It's not that we had a devaluation, as you have also seen in our valuation results. It's just a mix of assets that is different versus 31st of December. The property, plant and equipment increased with roughly EUR 5 million. It represents a CapEx of EUR 8 million in the renewable energy business, where the main components, EUR 100 million, is related anyway to the renewable energy assets, which is EUR 80 million completed as installations and roughly EUR 19 million assets under construction. If you then look at the investments in joint venture and associates, and actually also the other non-current receivables, the movements are intertwined somewhat. Obviously, the investments in investment joint ventures increased significantly. That is because we have also contributed equity into the new joint ventures of roughly EUR 155.6 million.
We have disposed of Moerdijk, and we take back the share on the result of the JVs of 33.7, so that makes the whole bridge between the end of last year, EUR 1 billion and now the EUR 1.2 billion. And in the same way, the other non-current receivables, they actually lowered from EUR 566 million to EUR 549 million. What's happened there? We had a receivable on the LPM Moerdijk of roughly EUR 130 million, and we created a new shareholder loan to the joint ventures following the transactions with Saga and Deka of EUR 112 million. Our cash position, as already mentioned, it increased significantly as we recycled a lot of cash.
It's now EUR 625 million, knowing that we have also EUR 400 million of revolving credit facilities untapped, so an available liquidity of EUR 1 billion, and the disposal group held for sale, these include assets which are destined to the JV or are already part of the joint venture, but are still under our development, and our joint venture partner still needs to pay for them, or they still need to transact inside. This obviously lowered significantly from approximately EUR 900 million to EUR 230 million. That is because we had all of the Saga and Deka assets which transferred in the first half, disposed into the JV model.
What is now still left in this EUR 230 million or EUR 229 million in the group held for sale, roughly half of it, or less, a little bit less than half of it, is the Deka building, the Magdeburg Rhenus building, which has been sold in August, last week, in fact, and also generated us EUR 68 million of proceeds. The remaining assets are some land and assets under construction in a multitude of joint ventures that we currently have in place. If you look at the liability side, I think equity has increased to EUR 2.255 billion .
Basically, it's the combination of our net result of EUR 141.5 million minus the dividend of EUR 101 million that has been paid out that makes the bridge between the two periods. On the debt side, most of it I think I already mentioned, but basically, let me start with the current financial debt that is now EUR 176 million . That includes two bonds, one of EUR 75 million , which has been repaid in July, one of EUR 80 million , which will be paid back in March next year. Accrued interests are there, and we have to pay off a part of our Schuldschein loan, EUR 3 million in October.
And the non-current financial debt that decreased with the EUR 80 million of bonds that we moved to current financial liabilities and then increased with EUR 135 million, which we drew on the European Investment Bank facility in February this year, of a total facility of EUR 150 million. Given the strong cash recycling and our profitability, the consolidated gearing ratio lowered from 40% to 32.7% at 30th June, and likewise, our proportional LTV dropped from 53% to 48.6%. This again summarizes once more our cost of debt evolution. It has been going down in last years as we have been paying back bonds which were at a higher cost than the ones that we have on the longer term.
It increased a bit this year because at year-end, we had repaid the obligation of EUR 225 million, and this year we took down the loan of EUR 135 million of the EIB, which has a 4.15% fixed interest and is paid off in a ten-year period. So but following the bond repayments in July, the EUR 75 million, our average cost of 2.25% of our interest expense on our loans at 30th June has then lowered now today to 2.21% again. Quick word on our cash flow. It's basically a summary of, I think, what I have said before.
We started the year with EUR 210 million, plus actually EUR 9.4 million, which you can see on the bottom, which was already in the group held for sale. So we started the year roughly with EUR 220 million. We had a total cash flow of the period of EUR 405.7 million versus a cash outflow of EUR 347 million in the previous period. So the big contributions are, we obviously recycled a lot of cash from our joint ventures transactions, EUR 662 million. We spent roughly EUR 198.7 million in our own portfolio, plus we have some assets under construction in the JV. And we have given loans to the JVs for that, so that was EUR 61 million.
Distributions by JV is EUR 6.9 million , and this is now you will see this more recurring, because in the Allianz joint ventures, we do typically once a year, in the second half of the year, a full distribution of all net cash inside of the JVs. In the Deka JV, there is quite a substantial shareholder loan, which is interest-bearing, and the interest is paid on a monthly rate. So we already received EUR 6.9 million of effective interest income from that joint venture. And then the acquisition of EUR 4.273 million is an additional stake that we have bought in one of our development joint ventures in San Sebastián, Spain.
That brought us a net cash of EUR 405 million in, and we also drew EUR 34 million from financing activity. First off, we paid a dividend of EUR 101 million, but then we drew the EUR 135 million loan, which then comes or sums up that we have EUR 625 million of cash at the end of the period. This is the maturity of our debts. It is a 4.1-year still average maturity. The EUR 78 million is in orange because to date of this presentation, we have paid off EUR 75 million, the remaining EUR 3 million will be in October.
Next year, we have EUR 80 million, and then obviously by 2027, we have a large bond repayment coming up of EUR 500 million, on which we will also start working to refinance this. Last slide, as we have a significant headroom to our key covenants, and I already shared the proportional LTV of 48.6%. But if you look at it at our JVs on a standalone basis, which have only completed assets inside, it is only 31.4%. And I think that was my last slide, so I'm happy to give it back to you, Jan.
Thank you. Thank you, Piet. Yes, on the summary and the outlook, doing development and being in our company, which is composed out of many, out of more than just... We are not just a REIT, we are not just a developer, we are not just a rental income company, we are a combination of everything a little bit together. On the development side, the margin you make is by the way you buy in assets which you are going to develop going forward. And I think we have done, over the past years, a very good job on that.
I wanted to show you a little bit with our Rüsselsheim, our Siemens, our Vélizy, our Mulhouse, and La Naval, and all the others, which we all, I think, bought for reasonable pricing, which we all have now, which all are going to come to maturity, so we can start develop them, really. We also have a big land plots coming in, which we have been waiting a couple of years because of the complexity of getting their permits, and they're now becoming active. We see, so that's on the side where the foundation for next our future profits has been laid, and we think we have a very solid foundation underneath of our business model.
And if we go looking forward, we see that VGP, and I have, we have all focused very much on technical competence and on trying to be a real partner for our, for our tenants, that we see that we, that we still have a lot of demand inside of our portfolio. As I said, we are currently negotiating on a number of very big lease agreements. We've just started up a number of very big new constructions, which are pre-let mostly. So, I am very confident about the year going forward. I have no crystal ball. I can't say where the valuations will go and what the thing will do, but I am a very strong believer that Europe is a resilient and strong industrial as a resilient and strong industrial base.
Many people are, most of the time, too dark-visioned about many things and only want to see the negative things. I am a optimist, and I am looking with confidence to the future. Voila! Nora, I think we can go to the Q&A.
Sure. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Kindly be reminded, this is limited to one question per analyst. Thank you. We will now take our first question from Frédéric Renard of Kepler Cheuvreux. Your line is open. Please go ahead.
Hi, good morning. Can you hear me?
Yes.
Yes.
Yes. Hi. I will have two question, actually. The first one is, a lot of your peer are actually discussing the slowdown in occupiers demand, and you seem to see the opposite, yet the pre-letting ratio is below historical standard. So how do you see this ratio evolving? And maybe how do you assess the current demand versus last year, and maybe to give a bit more detail, on a scale of one to ten, let's say that last year was at seven, how much would you quantify it now? That's the first question. And then, maybe you said on the closings going forward, that you have other interest than the existing peers. Can you give a bit more detail on what is exactly and how tangible it is? Thank you.
Okay. Well, as we already said, we signed during the first half year EUR 28.7 million of new leases. Meanwhile, there is about EUR 5 million more, so we are already at EUR 33 million of annualized leases signed this year. And on the back of that, and seeing all the demand, I think we know what we are doing in our parks and where we see the demand. We have started a little bit more of speculative construction, which I find still very reasonable in view that everything is going to be delivered within 12 to 18 months, and we still have a little bit of a time frame to get it leased.
Most of the buildings, I don't think we have, besides the Leipzig building, most of those buildings have already, are already partly pre-let, so there is everywhere demand. I am not at all worried about demand levels. If it is true that the traditional tenants we have seen going slower, the retail, which was a big take-up for us in the past years, has, as it's taken a lot more time to make a decision, et cetera. It's in our case completely compensated by new onshoring activity, by new investment activities into new technologies, by people who needs to have more efficient buildings and which are looking to new operations because of ESG measures, et cetera.
By the new industry, the new car industry, which is still, although slowing down, but they are still making their long-term plans, so on that, from that perspective, we feel confident, otherwise, I wouldn't do so. I didn't construct anything during the years when the construction price was far too high, and now that the construction price is really, it's come down with more than 30% in many cases, that the construction price for us is really acceptable again. We are at very. I am, I'm not afraid to invest in good value for money. That's the first, the answer on the first part of the question, and on the second part, it's too early to talk about it, but we are in, in talks with both existing and new, people on enlarging our joint venture model.
So when the time is ripe and when we can disclose it, we will. But I can give you confidence that there is really appetite, both, from the existing, joint venture partners as well as from new ones.
Thanks, Jan.
You're welcome, Frédéric. Thank you.
Thank you. And we'll now take our next question from Marius Pastor of Bernstein. Please go ahead.
Great. Thanks very much. Thank you for taking my question. Just on the volume of developments, can you give an indication of what you expect to complete in the second half of this year? And what you think a sustainable annual run rate of development activity completions is, based on current demand and capacity in the market? Thank you.
Yeah. Okay, yes, thank you for your question. I think we have planned for the total year to deliver roughly 600,000 sq m-700,000 sq m. It will be a little shift to the left or to the right, it depends on when exactly the last building will be delivered, but between 600,000 sq m and 700,000 sq m. So the bulk of what we need to deliver is still in the second half year. That's the first thing. We normally always say we are on a run rate of 400,000 sq m-600,000 sq m per annum. That is normalized, what we think which should come out of our normal markets where we are. It's going to depend a little bit.
I think we have a couple of very big projects in the pipeline, which are going to start up after the year end, not immediately, still in this year. Maybe, maybe it will. So it will be a little bit also dependent on when we get the final permit for some of the things. But I think it's fair to say that we expect this year to be on the high end or maybe even a little bit more than the 400,000 sq m-600,000 sq m, which we always said. That is where we are today.
Okay. Thank you very much.
You're welcome.
We'll now take our next question from Paul May of Barclays. Please go ahead.
Just a purely technical one from me. I see the implied tax rate dropped to about 13% from 25%. Just wonder if that will be for the full year as well? Thank you.
On recurring income, that is.
Yeah, yeah. There is a,
I'll take the question, if you don't mind.
I wouldn't be able to answer it.
The taxes always are composed of two components. One is the effective tax, and the other one is the deferred tax. The deferred tax is highly related to revaluations inside of the portfolio. If you have reversals or increases last year and this year, so that is already one movement, which is deferring a lot. The good news is that the effective tax, which, if I recall well, was EUR 4.4 million in our own portfolio, and in comparison to last year, it was, I think, EUR 3 million more. It's mainly because of the tax position of VGP N V, the holding company, where the difference comes from. That makes the other one just a movement on the deferred tax liability.
I think in the notes I have of the press release, there is a detail on these two components, how they have moved exactly.
Okay. So sorry, just on the recurring, I appreciate the deferred moved. On the recurring, the lower implied tax rate is now going to be a basis moving forward. Is that right? On the recurring income.
On the recurring income, if you look at the investment side or in the JVs, I think there you can consider it at the... Well, the JVs will always become bigger and more profitable as more assets come in and more rental income come in, but in percentage-wise, it should not be materially different, no.
I mean, I'm sorry, just on the percentage-wise, it has come down quite a lot. If you look at proportional current tax this half year versus previously, it's about 13% of the before tax profit, whereas in previous years it was about 25%. So it's come down quite a bit in percentage terms.
I just wondered if-
That lower percentage should be.
Okay, I think you're referring to the proportional income statement of the joint ventures, where indeed there is a big-
Of the overall, actually, yeah. It's on proportional.
There again, it is the deferred tax movement between two periods, where you had a reversal last year and now you have an upgrade of the or a very stable revaluation of the portfolio. That makes the movement. But in cash-
... the joint ventures, it was also a share, a saving of EUR 641,000. So both in our own portfolio, as in the JVs, we have less expenditure on effective tax, and we have obviously moved the deferred tax liability due to revaluations gains that we have, booked.
... Yeah, we might take it offline. I'm not referring to the deferred tax, but so we'll probably need to take it offline rather than boring everyone here.
I think so.
But we'll get to the bottom of it. Thank you. Thank you.
Thank you. We will now move on to our next question from Thomas Rothäusler of Deutsche Bank. Your line is open. Please go ahead.
Yes. Hi, morning, everybody. Just one question on JVs and funding. I mean, you refer to good demand from JV partner and potential new JV partners. Just wondering, how about new sources of equity beyond JVs? I mean, I think you once referred to fund structures. Any color here?
So far, our model works perfectly. Why, why would we change a winning horse? I feel confident in the current model, and I don't have the necessity to go for other measures of equity, of dilutive instruments or equity raises, et cetera. As long as the joint venture model works well, and there is enough appetite for it, and it's nicely cash generative for us. We are in control of all of our parks. We have good partners who follow us and who have commitments made and who also honor them. I have no need to change my model, so, and, it's not that we are not thinking all the time about trying to find out something better, but so far we didn't find out something better.
We're happy with the way we operate our business.
Okay. Thank you.
Thank you. Once again, as a reminder, if you would like to ask a question, please press star one on your telephone keypad, and please be reminded, this is limited to one question per analyst. Thank you. We will now move on to our next question from Ventsi Iliev of Kempen. Please go ahead.
Hi, good morning. Thank you for the presentation. So if I look at the pipeline, it's, let's say, it's stable. It came down a bit, but then if I also zoom in on the assets that have been under construction for longer than six months, that. So the pre-let came down from above 80% to 74%, and I guess given that the pipeline is stable, that's a bit surprising. So could you add a bit more color there? And also, if I'm not mistaken, the average project size is also coming down, at least compared to historic in, at least in historical terms. And you could argue that smaller projects are easier to let. Could you add more color there as well? Is that a conscious choice or just a function of demand? Thanks.
The fact that our average size of buildings is smaller today is linked to the fact that we are doing a little bit more of speculative development, where we choose to make the units not too big and not to go for very large units in these markets. It's in the past, most of our. So we had before maybe 22,000 sq m on average of our buildings. It's dropped now, if you look at this, to a little bit above 10,000 sq m. It's true that we have a little bit more of smaller units inside. They are also easily lettable. I think that's true. That's from a cautious point of view.
But it's always dependent also, if you are going to take a picture, by this time next year, it will be a total different look, because there are a couple of huge projects in the pipeline which are going to be signed and which will completely mix it up. So there is no. I cannot give you a rule. There is no rule on it, on. But we are now developing 10,000 sq m units. That's not the thing. It's just a mix of our total development. It's always been speculative, a little bit smaller, and then we have a lot of build-to-suits, which are big, to very big. If you look at our KraussMaffei buildings in Munich, that's one tenant, 206,000 sq m.
Of course, if you have that in the pipeline, then it makes a big difference.
Zalando.
Or Zalando, yes.
Was delivered this year, so that's immediately, 150-
sq m delivered to Zalando. It, of course, changes the mix completely. We have now just started to top a couple of very big buildings again. The Mobis building is 50,000 sq m in Pamplona . The VAT building is 30,000 sq m. the Isar Aerospace is 40,000 sq m. the new building in Rouen is 40,000 sq m. they are all also pre-lets, as I said. So, there is no rule of thumb on that. And then, once more, on the, I've done it on purpose, we've started a little bit more buildings.
Most of them are already pre-let, so we. They are partly pre-let, so we constructed a bit more, which is more effective to build, and in cost, it's more effective to build it bigger than when you build just a small unit, which you have pre-let. Hence, there is a little bit more of vacancy. We have so much in the pipeline that this is a discussion which I think is completely. Let's talk again in six months' time, and we will see where we are. I feel very confident about it. I mean, I'm every day working on my markets. I know them, I see them, I see the demand, and my people are every day on the spot. And we feel very confident about our pre-let levels.
Okay, clear. Thank you.
Thank you, and we'll now take our next question from Amal Aboulkhouatem of Degroof Petercam. Your line is open, please go ahead.
... Sir, good morning. Thank you for taking my question. Just to come back on the land bank acquisitions you've commented in the first half of this year. Can you give us some color on how the prices are evolving? They have been going down recently. Is it indicating, or are they stabilizing?
Yes. I don't think land prices are coming down a lot at the moment. It depends a little bit on the jurisdictions. VGP is a very pragmatic investor, so we always try to focus on. We put our money on land plots where we see a nice margin, and a nice margin is for us at least 30%, which we can realize, and it's very much dependent on the cost of the land which you are buying. Now, so you need to be very careful, and you need to be very selective going forward, but, and it's very dependent on country by country. Germany, of course, has fueled a lot. The Czech Republic is at the moment for us very difficult to buy land for a reasonable price.
You can still make, on paper, a very nice return, but then all the anticipations you make about the market and where it's gonna go to, you have to project them very positively, and we are trying to be very careful in that part. So, we have a large land bank. We're working on enlarging it, but we're very picky on our land plots going forward. And we bought last year very nice things, and we think we are working currently on some very nice transactions. Those are reasonable land prices, but I don't see them increase immediately. There is no crisis with the landlords who need to sell immediately, so I see the market relatively stable.
There are no investors for very big land plots at the moment, I have the feeling. We're very alone in that. There is a couple of us on the market for bigger stake projects like La Naval or like Rüsselsheim. But on the smaller land plots, where you can build a one-off, a one building, there is still a lot of competition in the market, so there is also no real pressure on the land prices of the smaller projects. Does that answer your question?
Okay. Thank you.
Yeah.
Yes, yes, 'cause if I may just add another question. On your light industrial exposure, we see a novel economic slowdown in Europe, especially in German industries. How do you see your exposure and share of light industrial within your portfolio going forward?
Very positive. The light industrial projects which we are having in our portfolio are all doing very well. They're all very long-term lease agreements with strong groups, and they are all -- we have the, I think, the, our buildings on average are four years of age, so it's all very brand-new projects. We have been very picky on who we take and who we go forward with. We have been very much supportive. We see ourselves also as a service provider to the industry, so we try to do these projects in buildings which are easily to be relet. So we don't have a -- I don't have any stress about being it too difficult to release, because they are standardized.
The truth is, afterwards, on the inside, we adapt them a little bit for the tenants and for the special requirements, but that is always paid by the tenants directly. So there is, we have no exposure on, on special, occasions, and, we are, as I said, we are 99% let at the moment in our existing portfolio. That's better than the market, and we have, there is no bad payer in the whole VGP tenant base, so everything runs well. So I feel very comfortable about it.
Going forward, many of the big projects we are working on are industrial, and I think that's a good sign that people still want to reinvest and to bring their pipeline, availability of their product which they are making back to Europe. We see a lot of new industrial activity, and we're glad that we can work on it.
Very clear. Thank you very much.
You're welcome.
Thank you, and we'll now move on to our next question from Steven Boumans of ABN AMRO-ODDO BHF. Please go ahead.
Morning, everybody. This is actually Roy Kulter. I'm here in the room with Steven, but we are looking for maybe some more information on your strategy for countries that are covered by the second JV, for the Aurora JV. The press release mentions that Allianz no longer has exclusivity here. So can you please elaborate on what your strategy will be here on the capital recycling in these countries? Thank you.
Well, I think I already answered on the question before, because, we, we said, I said we are currently negotiating both with existing joint venture partners and also with potential new ones on making further amendments to our joint venture strategy. There is, so one part of that is that we have now released, we have a release for all of our assets, which we have in the countries which are covered by the Aurora transaction, and we can, we are free to, to do with them as we fit, as we deem fit. So we are working on that, and we...
I hope to be able to say, by the year end, it always takes a while, you know, to make an agreement on new joint ventures, but I hope that by, in a relatively timely manner, we will be able to communicate a little bit more on it. I can't for the moment, but we're working on it. That's all I can say to it.
Okay. Thank you.
You're welcome.
Thank you. That was our last question. I will now hand it back to Jan Van Geet for closing remarks.
Yes, thank you all very much for being on the call. We, if you have any other questions, you know where to find us, and we'll be happily here to answer you. I just wanted to rephrase once. I think we have a very solid start of the year. We are growing in double digits numbers, and we have all the cash available to do this in a very profitable pipeline going forward, I think. So, I hope you will put your trust further on in us, and thank you. See you soon.
Thank you. Bye.
Bye-bye.
Thank you.