Good morning, everybody. Sorry for the delay. Welcome to this webcast on the review of VGP's results over the first half of 2022. Sorry to have kept you waiting. There was a technical issue on the line as you may have heard. I'm first gonna go through the presentation, which you can maybe also follow online with the highlights of the first half of 2022. Our net profit for the period amounted to EUR 153.4 million. That's on the back of strong business growth across the portfolio. We have signed and renewed rental income of EUR 35.4 million at the thirtieth of June. Meanwhile, that's gone up to EUR 41.6 million.
The total signed rental income of EUR 281.1 million, that's including 100% of the joint ventures, went up with roughly 10% at the thirtieth of June. Meanwhile, that's increased to 12.4%. As the two last months have seen a nice increase of signed lease agreements. We currently have 1,246,000 square meters under construction, which represents 40 projects and EUR 88.1 million in additional annual rent. Once it's going to be fully built and let, and it's currently 93.4% pre-let already. It was 87.4% at the thirtieth of June. Our land bank extends to 11.3 million square meters. That's only 3.3% increase year-to-date, but we also deployed a little bit.
We can construct on that more than 5 million square meters of future lettable area. We can virtually double our business on our land bank, which we have today. We delivered an absolute record, 334,000 square meters of lettable area in the first half, which represented 17 projects. That's EUR 17 million of annualized rents. And they were virtually completely let 99.3%. We also acquired our first greenfields in France, in Rouen, which is a really nice location. That's the major city of Normandy in the first half, of which we are very positive, and we are starting up our operations in Taulov in Denmark in the second half of this year.
The closing of the joint ventures, which we did in the first half, it's a bit special because we did one closing on the 1st of July, just after we reported our numbers, five minutes past midnight. They delivered strong gains in comparison to our numbers which we had in our books on the 31st of December. We did EUR 469 million of gross asset value transfers sold to the joint ventures, out of which we recycled EUR 350 million of gross proceeds to date. We are going to complete VGP Park Munich. We handed over already part of the premises to BMW, and we are handing over as we speak to KraussMaffei. That should deliver us an extra minimum cash proceed for EUR 73 million in the second half year.
So far it's completely funded by money from the two capital partners, so we are going to re-leverage, and then there will be another bulk of sum coming in next year once we have re-leveraged VGP Park Munich. We have agreed tentatively with Allianz on the first closing of our new joint venture, which is going to happen on the fifteenth of November this year with a relatively large seed portfolio, which is going to be transferred to the new European joint venture. Our gearing remains very low at 33.5%. That is taking into account the EUR 82 million which we gave inside on the first of July. Our cash balance was EUR 730 million on the first of July in the morning.
We have a total equity of EUR 2.197 billion. As you all know, we issued the bonds on the 10th of January this year, EUR 500 million, which on the five-year tenor, which is at 1.6% cost and EUR 500 million in an eight-year tenor at 2.25% cost. Which in retrospect now has been a very good move I think and relatively cheap money in today's market. On the financial performance, we have an ongoing strong performance. We have in one year time our total portfolio value has grown with more than EUR 2 billion in value. We have a continuous strong growth in the committed annualized rental income, which is the main indicator of how our business grows.
You can see it's gone up by 48% in one year time from 205 to 281, and it's currently EUR 287 million. Our operating profits and the higher net rental income is mitigated by a decrease in net valuation gains on our standing assets. It's mainly standing assets because if you look up at our profit, then the only difference between last year and this year is the valuation gains on our standing assets in the own portfolio is EUR 63 million less than last year when we had a big yield compression. This year the compressions are a lot more modest so far.
Our earnings per share, they have decreased a little bit, but still up to they are 7.01 EUR per share. It's a little bit affected by the share issuance which we did last year in the fourth quarter. If you would compare it on a like-for-like basis, we would deliver 7.44 EUR per share. On ESG, which is more and more important in today's challenging ESG market, we have. I will go quickly through the achievements and the highlights of the first half. On our green building certification, all of our buildings, which we started after 2020, have received green building certifications. This represents, just to give you an idea how fast we grow, already 61.2% of our total portfolio as of June 2022.
On the VGP Renewable Energy side, that's probably our best performing investment today, thanks to the rising energy price. We have 120.9 megawatt peak now installed on the construction and another 53.7 megawatt peak in the pipeline. If you look at the actual use today, so not annualized, then the income on our solar panels, which represent roughly, we have already EUR 48 million invested inside. We have over 60, more than 60, almost 70 million of commitments in total, including this EUR 48 million. We will need another EUR 40 million to go and deploy the 53.7 megawatt peak. The investment will go over EUR 100 million in the near future.
We have, if you look at what it's yielding today, so not annualized, until now, we have on our income generating assets already a yield of more than 14% in this year. It's really going very, very well, thanks to the high energy price. We are on track to achieve carbon neutrality by 2025. That's our commitment. A 50% growth reduction on the Scope 1 and 2. All of our VGP offices profit now from a green energy PPA contract as of January 1, 2022. All the energy which we use inside of our offices is green. We have committed ourselves to a 55% reduction EU Scope three emissions by 2030.
All of our new buildings as of March 2022 will be realized without gas source heating systems wherever it's possible. That's the bulk of our new investments are all going on other alternatives than gas heating. On the operational performance over the first half. Our rental income or contracted rental income increased by 9.7%. As I said, actually it's 12.4%. Of which EUR 22.4 million new leases were signed in the first half year. There is another EUR 6.1 million added to that over the last two months. Our lease portfolio is very well diversified.
We have in total 417 tenant contracts, which drives committed annualized leases to 281 at the 30th of June. 287 in comparison to year 2021, it amounted to EUR 256 million. Our occupancy rate is 99% for the completed portfolio at the moment. If we go to the portfolio growth, then you see that our compounded annual growth rate stands from 2018 until the first half of 2022 at 41.56%. We have an expected capital expenditure, which is predominantly based on pre-let construction. We've grown a little bit more cautious, and we are really very well pre-let today. As I said, more than 93% of our buildings under construction is pre-let.
It's a lot bigger than last year. Our CapEx, we expect a CapEx of around EUR 1 billion in this year. We have a significant cash balance expected to be recycled from joint venture closings in the remainder of 2022, which have now been agreed with Allianz. You can see in the two lines under the graph that it works very well. The capital expenditure over the last since 2018 has been EUR 2.6 billion, and we recycled out of our joint venture closings EUR 1.55 billion so far. We have a very diversified investment portfolio. If you break it down by country, of course, you can see Germany is the biggest one. It's also the biggest economy where we are active in.
All of the other countries are doing very well and growing very fast. If you look at the investment portfolio by status, then you can see that it's shifting more and more towards completed today. We have EUR 4.3 billion of completed assets, and we have EUR 1.5 billion of assets under construction on our balance sheet. The development plan represents 11% of the total asset value with EUR 0.7 billion. Our ultimate goal is to have portfolios of at least EUR 500 million total asset value in each of the countries where we are active in. In the bigger economies, of course, it is to grow bigger, so over EUR 1 billion.
We already have that in Germany, and virtually we'll have it soon in Czech Republic, Spain and the Netherlands. We're trying to grow the other countries also as fast as we can. We are really pre-let on a long-term basis. These numbers which we show are virtually always oscillating around the same because our lease agreements, which we sign, are always very long-term, 10- and 15-year leases, most of them. Actually, you see that in our own portfolio in the first half, we are at 97.5% of occupancy rate. That is mainly because we have moved two of our existing tenants into a lot bigger buildings. They have expanded, and we are re-leasing at this peak the space which they are going to make vacant in the second half here.
That will, but we already have a lot of tenancy, and there is a lot of strong demand in the market, and we are very certain that it will be re-leased before the year ends. The committed occupancy of our portfolio stood at 99%, and the weighted average lease term is 8.3 years, so that's a bit where we are today. If you look at the diversification of our tenant base, then it's, as we grow very fast also it's becoming more and more diverse. Our top 10 clients count only for 34.3% anymore, which is divided over a lot of leases. It's not just everyone in the top have more than one lease. With Crowdify, it's three different leases.
It was two years ago, if you remember, 21% of our total lease portfolio. It's come down to below 10% now, and it will go down further as we move along. Amazon, it is not only one lease as is often mentioned in the Belgian press. It is six different lease agreements which we have with Amazon. We have three different lease agreements with Zalando. We have six different lease agreements with Rhenus Logistics in different countries. It's all spread. If you look at the tenant portfolio breakdown by industry segment, you see that logistics takes up 38.6%, which is mainly end users. E-commerce stays stable at 25.2%, and light industrial 30.3%.
For us, this mix is very important because going forward in Europe, if you want to go more and more into brownfields, which are politically always a bit touched, and most of the time they have employed a lot of people before. We need to be able to convince the local governments that we are a partner which doesn't only bring just big warehouses with low employment, but that we can also bring on really challenging projects, which have a lot of technical parameters, and that is where we are focusing on the technical competence inside of VGP.
Out of the 385 people that work for us now, more than half of them are engineers and are very specialized in building our own buildings which are a little bit more challenging and which assure long-term leases with very nice tenants inside. That's what we are focusing on going forward. In the first half of 2022, we delivered 17 buildings, which represented 334,000 square meters. As we already said, EUR 17 million rental income through 24 different tenant contracts, and it was virtually 100% let. The largest share of new development we delivered were for tenants active in logistics.
We aim to start up in the second half year, roughly, the same amount or a little bit more, 270,000 square meters now, which is already complete, which is already more than 90% pre-let, and we will certainly start up some other buildings also in second half year going forward. Our target in the pre-let when we start up is at least 90% pre-let, eighty percent pre-let, six months after the start of the construction, which we are well above today, so we have a big buffer inside.
We can see a couple of examples that we have delivered in Leipzig, in Germany, in Magdeburg, where we have just now signed a very big new lease agreement with a state-owned company, and in Mannheim, where we also signed a new lease agreement with a very large e-commerce player in May, which takes a whole building of 60,000 square meters for a 10-year lease. Okay. In delivery of new developments in the second half, we expect to deliver actually more than 750,000 square meters. We said here 700,000.
We never know, maybe it can shift a little bit because of fit out, which we have in the second half, which will be an absolute record. Also our return income generating income generating assets are going up very fast next year. This year we will activate more than EUR 80 million rental income, which will actually start paying from this year and next year on. Our return income really goes up very fast. At on the total of EUR 5 billion, we deliver EUR 1 billion this year, so 25% of our total portfolio, which we deliver in one year's time. Once this the seven hundred thousand is virtually, as I already said, it's 93 and a bit % pre-let of the total, which is under construction.
The 700,000 which we are going to deliver is almost all completely pre-let. It represents EUR 51.5 million of rent. The industrial tenants make up the biggest part of the pre-let inside of this portfolio, which we are delivering this year, with Gießen and Munich as the main components of it. Our pre-let portfolio under construction expanded significantly. As I already said, we have 40 buildings under construction, which represent 1,246,000 at the 30th of June. In total, this equates to EUR 88.1 million of new lease contracts. It is now 93.7% pre-let. Western Europe or the EPRA one from the view, it may be interesting to see that we are shifting a little bit more to Western Europe. Of course, the economies are bigger.
Eastern Europe stays as important for us as Western Europe. We are looking at Europe as one market, but Western Europe represents meanwhile 70.5% of the portfolio under construction. In the second half of the year, we foresee, as I already said, to start up at least 270,000 of new development. We have to start up at least 270,000 of new development, which, because we are actually already more than 90% pre-let, so we need to start them off, going forward. If you then look at the developments on the geographic breakdown, you see that Germany is still the biggest market by 61%. Going forward, Spain, Czech Republic, Romania and Hungary are growing all very fast.
Also in the other countries, we're going to start up quite some big developments in the second half of the year. On the picture on the right side, you see, which is a brownfield which we bought a year and a half ago. Which is fully let now, one part to Zalando and the other part to UPS and Rhenus. Zalando is a 15-year lease, and the Rhenus and UPS are a 10-year lease agreement. It's a lot further in construction than what is visible on the picture, and we will deliver it in the course of next year. On the land bank, we are focusing only on what we consider to be top locations. If you look, the land bank we own as of December 2021 amounted to 7 million square meters.
We deployed half a million or more square meters. Meanwhile it's already more than half a million square meters in 2022. We acquired 1.5 million square meters in the first half year. We committed to another 3 million, 3.2 million square meters, which is things which we wanna buy in the next 12-24 months. We have another 601,000 square meters with LOIs, where we are doing our due diligence, which is not committed yet. If you look at the geographic breakdown, you see there is a more equal spread there, where we have a lot of lands in the future.
We bought a lot of land in the Netherlands, in Spain, in Austria, and I will go through some of the highlights later on. We have a couple of examples in our presentation prepared. Thanks to the energy crisis in Europe, we have also seen over the past months that some of the traditional industrial projects in Germany are really thinking about reorganizing themselves with this high energy cost. We have seen a number of brownfield projects in different countries come to the market now, which we consider to be really top locations, and very attractive opportunities where we can get high returns on, and which will be our main focus in the future going forward.
Where we really want to focus on, that's also why we are investing so much in technological competence, because these are things which will need to be developed in close cooperation with the local communities. We believe that there is a lot of value inside of these new opportunities. I come to the financial performance of VGP. I'll first go through the income statement. Our operating profit amounted to EUR 190.5 million, compared to the first half of 2021, where we had EUR 239.9 million. The higher net rental income is mitigated by decreasing net valuation gain and the joint venture contribution.
The joint venture contribution profited last year from a very big yield compression, and this year the yields have been fairly stable. If you look at what we have started up, then we can say that our margins on the projects under construction are stable. I think that's the most important thing to look at. That is thanks also to the fact that we have been able to charge through a lot higher rental. The rental prices in Europe have really grown a lot in the first half of 2022. On a look-through basis, our net rental income is up by 48% year-on-year. That's an increase from EUR 31.9 million to EUR 47.3 million over the first half year.
The total net rental income that we gave you at 100% increased 29% to EUR 82.9 million. The net valuation gains on the property portfolio of EUR 105.9 million includes an extra EUR 47 million of realized gains from the disposals to the joint ventures, versus EUR 12 million in the first half of 2021. If you know that we did EUR 464 million, you can see that we booked an extra 10% profit against the December 31 numbers.
Yeah.
Yeah, we have EUR 108 million of unrealized gains, including EUR 40 million on held for sale, net of EUR 6 million of broker and rent fees. And that is resulting from a EUR 78 million profit on first-time valuations, and positive revaluations affected, which are EUR 36 million. The standing property portfolio is valued on a weighted average yield of 4.57% versus 4.64% as at 31 December 2021. Which is mainly due to another mix of the geographies where we are active in. The share of profit from the joint ventures and associates lower is lower by EUR 53 million, but as I said, that's a mere lower revaluation profit.
Because last year the yield compression contributed very positive in the first half of 2021, and that's led to a lesser extent at the moment. The change, as I already said, in the reported yield is due to the portfolio mix change. If you look at the administration and other expenses, our administration expenses are in line with the comparable period last year. We spent EUR 3 million. We were very much hit after the war started, because in Eastern Europe, a lot of people on our construction sites are workers which come from Ukraine.
They went back to fight. We decided to spend EUR 3 million as a contribution in favor of the Ukrainian refugees, which have been spent to the United Nations, to have them set up their first camps to accommodate them. If you look at the operating EBITDA by segment, which we report every time, then you can see that on the rental income, our EBITDA went from EUR 33.4 million to EUR 47 million and that is really the clean just the rental income without any revaluation gains. We have administered our administration expense, which we needed to incur to be able to do that to each of the segments.
On the development side, we have our EBITDA went up to EUR 147.1 million, and that is actually, it looks at two of our developments, which we have on our balance sheet, and which are ultimately going all into the joint ventures, so which we are going to sell at market value in the joint ventures. Then on the property and asset management side, thanks to the fact that our portfolios in the joint venture are growing so fast, also our management fee income is growing a lot. The EBITDA, which we made out of that, is EUR 6.7 million, totaling for the three together, EUR 203 million of EBITDA, which we can say comes out of the operations.
On the asset side of the balance sheet, the investment properties in our own portfolio, including the disposal group held for sale, total EUR 2.688 billion, which consisted of the completed portfolio, which has grown tremendously. If you compare to last half year, it was EUR 195 million, now it's more than EUR 1 billion, EUR 1.078 billion. The same goes for the under construction. It was last year, EUR 709 million, now under construction is more than EUR 1 billion, EUR 1.042 billion. The development plans went up from EUR 359 million last year to EUR 569 million this year.
The investment in joint ventures and associates increased to EUR 965 million, reflecting the joint venture number one, which is now fully invested. There we have an equity share of EUR 646 million inside. The first joint venture covers the geographies of Germany, the Czech Republic, Slovakia, and Hungary. The second joint venture, we have EUR 163 million of equity inside. That is the joint venture which we made for the other countries, Spain, Romania, Italy, the Netherlands, Austria, and Portugal. The third joint venture is a special one. That's a development joint venture which we did together with them. It's unique. There we have EUR 131 million of investment inside.
We have some other development joint ventures which include the biggest one in Moerdijk in the Netherlands. In Moerdijk, we are partnering with the Port of Moerdijk, which is the second-largest port in the Netherlands, and where we can develop over time more than 470,000 sq m, almost 480,000 sq m. We think that we can start construction there next year. It's a really nice development. If we look at other non-current receivables, they increased to EUR 332.3 million from EUR 264.9 million, which mainly reflects our other loans. To the VGP Park Munich, where we are co-funding together with Allianz, our development.
Our park in Moerdijk, where we have bought meanwhile all of the land plots, and we are investing in infrastructure and preparation of the foundation, EUR 71 million. We have some other joint ventures. We have one in Spain. We have another one in Germany, where we invested in size EUR 92 million with other loans to other joint venture and EUR 92 million. We have an increase of the cash position compared to last year to EUR 648.5 million at the thirtieth of June, which changed to EUR 730 million the first of July. We have secured another revolving credit facility, making our several multi-year unsecured revolving credit facilities.
They are on ground, and they are available, and they run for a five-year period, and they increase to EUR 300 million of available credit facilities, now available at the second half of 2022. If we go to the equity and liabilities, so the shareholder equity is now at EUR 2.179 billion. The main variations were a dividend payout of EUR 149.6 million, and then the profit contribution of EUR 163.5 million. The total liabilities went up to EUR 2.691 billion from EUR 1.707 billion. There's an increase of the non-current financial debt of EUR 842.3 million.
As you know, we issued a bond of EUR 1 billion in a dual tranche of 5 and 8 years. We reclassified the bond, which is due in April 2023, to current financial debt, and that's a bond of EUR 150 million. In the second half, we have another bond of EUR 225 million, which then also will be reclassified to current financial debt to be repaid next year. Also, there's a small amount in the short term, which we issued, EUR 4.5 million, which needs to be repaid.
The consolidated gearing ratio, if we take into account the money which came in on the first of July, amounts to 33.5%, and if you look at the proportional consolidated loan to value, that's still at 57.6%. If you look at our covenant, I think a tsunami really needs to happen and a very big one like we've never seen before we get anywhere near to our covenant. The gearing ratio stands at 35.2%, and our covenant is 65% on the bonds. The debt service cover ratio stands at 17.5 times, and the covenant is 1.2 times greater than or equal to 1.2.
The interest cover ratio stands at 22.6 times in the first half, and our covenant is greater than or equal to 1.2. We have a total debt of EUR 2.362 billion. We have EUR 730 million cash as at 1 July, EUR 300 million unutilized credit facilities, 100% of unencumbered assets. The only unencumbered asset which we had was in the Baltic States, and we repaid our loan there. We have a five years average debt maturity and our average cost of debt is 2.29%. If we repay next year our bonds, which we intend to do, then our cost of debt actually goes down because going forward, our bonds in time become cheaper and cheaper when you look at it. I think that's a nice.
You can see the maturity profile of the financial debt. Next year is a bigger year to repay debt, but then years after that until 2027, we have a lot of time to grow. I'm going to give you a bit of project update. VGP is carefully but well chosen going forward with acquisitions of land plots to ensure its future growth. The first acquisition we did is in France, a new country which we entered and where we are very positive on. We see very positive signals in the market. We bought a large land plot in Rouen. Rouen is a big city. It's the capital of Normandy with 550,000 inhabitants and a lot of big cities around it.
It's a very big economic center in France. The land size which we bought is 321,000 square meters, and we can potentially build more than 150,000 square meters here. We already registered a lot of interest for the location. There is part of it a building permit issued which we want to modify, and we think that next year we will start development here. Yeah, we hope to be able to develop it relatively quickly. Our team in France is also proving to be really very good, and we're very proud on them. The second thing which I wanted to show you is our Munich development. The completion will be done completely in the second half of 2022.
You can see that it's in a very well advanced stage. In total, it will be 340,000 square meters of gross lettable area. There is one building which is not started yet, which is a potential expansion, and it's fully let 100%. The latest handover date is the fifteenth of November, and we are more than in time. We can hand it over quickly. We have one of the nicest developments which we are doing is really in Gießen at the Alten Flughafen in Germany. It's an old American air base which has. It's a brownfield which has been completely redeveloped. It's more than 30 hectares of development land, and we completely leased it out in a couple of months of time.
It's 212,000 square meters of gross lettable area, and the construction started, and we are well within our budget. We believe that this is a very big profit contribution in our numbers. If you look at Spain, we bought. You see the tendency is that we're going more and more into brownfield. We bought a very big shipyard which went bankrupt in Bilbao. We meanwhile got all the permits to start the demolishing of the old docks. It's really a very brownfield. It was a very, very brownfield. We had in our calculations that we were going to have to pay EUR 5 million for the decontamination and the demolishment.
Thanks to the rise in the steel price in the last quarter of last year and the first quarter of this year, actually they are paying us EUR 3.5 million for the demolishing it and for decontaminating it. It is a lot better in our balance sheet than we had foreseen. Meanwhile, what you see now is not any more relevant today. It's almost a new greenfield. Most of the old buildings have been demolished and taken away. We also have a lot of interest in the dry docks because there is shipyards around it.
We are in very far advanced negotiations with a big industrial group to make floating pontoons with windmills on it on top of our I think. Really the new energy industry is very interested in the location, which has a very good access to the sea and more than 1.3 kilometers of quays directly at the waterfront. That's only a little selection of what we are working on. We're growing further on. We see a lot of opportunities in the market and we need to make sure that we remain with a strong balance sheet and that we have enough capital available to react to new opportunities going forward.
To summarize it, I think that all in all being prudent, nevertheless, we did a very strong financial operating result over the first half of 2022. We had a robust growth. As I said, it's more than EUR 40 million now of new or renewed lease agreements signed. We also used the momentum to, when we were placing, solar panels on the roofs and we were negotiating with our tenants to prolong our lease agreements with existing tenants. So that's hence also part of the EUR 35 million is renewed and very long-term renewed lease agreements, existing ones. We've seen a significant rental growth in most of the countries.
You will have seen that our profit contribution from the new assets under construction remains at a very nice margin, and that's thanks to the fact that we have been able to push through significant higher rents in most of the countries which we are active in and especially in Germany. Yeah, we have been more prudent towards land acquisitions in the first half of 2022. We see that there is a lot of opportunities coming onto the market, and we think it is wise to be prudent and to wait for these opportunities because it's gonna ease a little bit from the big scarcity that there was, and we are gonna be able to source in a lot better than before, I expect.
There is a big volatility on the energy market, which has given a significant boost to our renewable energy, the revenue potential. As I said, run-rate annualized, we are now at 14%, more than 14%, yields already generated in this year on our investments on the income generating assets from the solar panels. If you extrapolate that, of course the winter is in front of us, but if you extrapolate that through the whole year, we're gonna generate more than 20% yield from these investments in this year, which is thanks to the good weather, I would say. That's one advantage. Of course also because of these very high energy prices, which I don't expect to come down very soon. It's also been an accelerator for our tenants transition towards renewable energy consumption across regions.
It's also these high energy prices. It confirms the trends and there is nothing wrong I think with the industrial and logistics sector. Going forward, people will have to move to more energy efficient buildings and energy efficient solutions. It supports the strong fundamentals of our industry. We have done significant cash recycling through completed and anticipated joint venture closings. On the 15th of November, we are in due diligence now. There is a seed portfolio closing that's anticipated for our new joint venture, which I wanted to remind you, the idea is that we are going to grow it in a period of 5-year time to EUR 2.8 billion of gross asset value. It's roughly 50% bigger than the first joint venture which we started up.
We have already a lot of that prepared on our balance sheet to be able to transfer it towards that joint venture in the next 6-12 months. Our strong capital position is important. As I said, there are highly attractive downsource opportunities which start to increasingly arise and we want to play a big role in acquiring them across the continent. That's a bit, I think, a recapitulation of how we see the market and what we have performed so far and what we're gonna do in the second half of this year. There is an appendix to our presentation where you can see that meanwhile we have 104 active parks in our
We also bought land in Zagreb where we have a lot of demands for it. We're negotiating with a very large player in Belgrade for to put our first big building on the market this year. We expanded a lot in Spain, as you can see, also in regional cities where we have everywhere a lot of demand. To be honest, the demand side, and you see it in our numbers, in what we have leased out, is really still very strong going forward. I would stop here with our presentation and leave the floor to a couple of questions if there are any. Thank you very much for listening to us so far.
Operator, I think we can open the line for the research analysts to pose questions in the queue.
Thank you, sir. Dear participant, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to allow everyone an opportunity to signal for questions.
Can you hear me?
We'll take our first question from Frédéric Renard from Kepler. Your line is open. Please go ahead, sir.
Hello, good morning, everybody. Thank you for taking my question. I have four different questions. The first one is on Munich. I read in the annual report or the EPRA report, sorry, that it did continue to be measured at the pre-agreed purchase price that you had with Allianz. I was just refresh me, how much was the deal yielding? I think it was more than 4%. How much do you think it will be revalued in H2?
Good morning. Thank you for the question. So on Munich, we have agreed in 2020 that it's two different yields. One is for the BMW side and one is for the KraussMaffei. BMW was a 3.7% yield and KraussMaffei 4.1% yield. So on average it's 4% yield. Today, in today's market, the thirtieth of June, if we would reevaluate it, we'd certainly have a better value inside of our books. But as it is the agreed price which we agreed upon, we have taken the view to be conservative and to say that we are going to get that price in November from that's when it get.
We will reevaluate it at the year end for the first time. What the yields will do in the meantime, it's I don't have a crystal ball. That I cannot answer. I can only say that our German assets are comparable, and then it's Munich. Munich is really very special in the German market because it's the top location, I think. They are considerably lower than 4% today in our book, the comparable assets which we have in Germany. It is fair to assume that there would be an extra profit in our books if we would reevaluate.
Maybe an indication of rental level versus what you pre-leased in the past. Is it at maybe 15% or so?
The rental level, you mean?
Yes, the ERV of Munich probably is also going up.
The ERV. It's a bit difficult to compare, of course, because these are really industrial projects. BMW is having its FIZ. It's this FIZ, where they do now the development of batteries, of battery competence inside of the building. It's relatively industrialized. KraussMaffei is also, they are machine making. They have completely full books at the moment. If you look at the rental prices in Munich, I've seen a report, and in the first half year, they went over EUR 9 per square meter, and we are at, I think, on average, 7-7.50 EUR per square meter. That's where we are in our end.
It's the ERV is substantially would be in today's market substantially higher. That is also because the scarcity in the Munich market and the extreme development which has been there over the last 24 months.
Okay. Thanks. Wonderful. Now the second question is on the expected seed portfolio. Could you give a certain range in valuation that you expect? More than assets.
We think that it's difficult to say, but we've tentatively agreed, and the valuations are in line with what we expected, so they are around where we see them today. That is, we have agreed roughly what is in our books today.
Another question is on the new construction. I think you said during the call that you would expect to start 270,000 square meters. So in total-
Yeah.
Year-on-year, it should be just below 500,000 sq m. Is the 270 that you mentioned, this is already certified, but do you expect to do more or not?
Well, the 270 is what we have to start up because we already leased it out. There is not one single building between that which is not at least partly pre-let, and most of them are completely pre-let. That's the minimum we need to do. Now, to be honest, we have seen an incredible amount in inflation in the first half year, which is now easing. We see that the prices are coming down again in our construction, and that's why we have been so prudent and not start up too many speculative buildings. That's also why our pre-let number is so high, over 93%. This being said, we see a lot of demand in the market.
You can also see that what we have leased out, over EUR 40 million, including the renewals, but I think almost EUR 30 million in new lease agreements. We are ready to start up a couple of other buildings also in the second half year. I don't want to give a guidance on it. I want to remain prudent and not just start speculatively developing like crazy. We don't know what the market is going to do, so we're gonna go step by step, and we are ready. We have most of our building permits now of the buildings which we want, we have them available. In the second half year, we can start up. We could start up a lot more, but I'm not going to say we're gonna do that.
I wanna keep my pre-let levels very high, so to be prudent in the market. I still think that is the best way forward, not to have too much exposure on vacancy.
Okay. The last question, if I may, on solar energy. Do I understand then, from what you said, that you would expect more than EUR 10 million income, going forward, if I take the yield?
Going forward? Yeah. We want to. We have now, we have around, it's more than 100, help me, Martijn, how much do we have now under construction and activated already?
Oh, solar panels?
Yeah.
In total, of the 120.9 MWp, 45 MWp is operational and 75 MWp is in the pipeline.
Yeah. We want to double that. We want to more than double that. Our original plan was to double it by 2025. If you look now, all of our tenants are asking for it. Dependent on the capabilities which we can get in the market, we're investing heavily inside. We already hired a lot of people to build it out. Indeed, it's very high yielding. We are going to try to accelerate it as much as we can on our buildings. The potential on our roofs, it's humongous. It is very big, but we need to go really step by step and to make sure that everything is done really state of the art and that we don't have any problems afterwards.
We also want to make sure that we don't take any risks on non-paid energy bills. We wanna do it combined with our good tenants and make sure that we have good agreements with them going forward and that we, if they would not be there, that we can also deliver to the grid. That's dependent on where we are, in which legislation, in which country. We are studying it very well. It has to be said, in the beginning, we only did the Netherlands and Germany. Now we have our first project also in the Czech Republic, in Italy, in Romania. It's accelerating as we speak. Yes, it's the highest yielding asset class at the moment where we are active.
We always said that we see it as an attractive investment opportunity in today's market, and we have a commitment of over EUR 100 million already, yes, to invest inside, so which is gonna grow.
Frédéric, if you know, we could easily start another 155 megawatt peak today, build them, I mean, but as Jan said, we also want to make sure that we don't just have a good business model today on today's energy prices, but that there's a longer-term security on it as well. We're working with the tenants to agree those self-consumption or use a subsidy regime if it's available.
Mm-hmm. Okay. Thank you very much. That's my question. Answering them.
You're welcome.
Have a nice day.
We'll take our next question from Piet van Geet, Kempen. Your line is open. Please go ahead.
Thank you. Hi, team. Could you maybe give some color on the appetite from Allianz to continue these joint venture structures? Maybe also shed some light on how the discussions were going for the seed portfolio for the fourth joint venture, particularly on valuations.
You are asking me to speak in the name of somebody else. We have four joint venture closings this year. We already closed the Aurora portfolio, which was EUR 364 million. We did the last closing in JV2, which was EUR 91 million. We are closing Munich, which is 100% sure, in the course of November. We have agreed, and there is a due diligence running from both sides on the seed portfolio, on the first one, which is a combination of two different portfolios, and it's in total, it should be around EUR 1 billion in size, which is ongoing.
That in itself speaks for itself, that there is a lot of appetite still, I think, to continue with VGP. The relationship is very good. We also have a lot of offers on the table for financing from banks. There was a lot of uncertainty at a certain moment in time expressed by some of the people who follow us, that we would not be able to attract financing anymore. We have very attractive financing proposals for all the countries where we are active in and what we are going to transfer, which make our returns look as we expected. I would say there is everything is going to plan for us at the moment.
Okay. On my third question, could you maybe a little bit on how the discussions were going, on the seed portfolio, on EUR 1 billion? Of course, the biggest closing, in the current market environment, could you imagine that it didn't go as smoothly as it went in the past, or was that not the case?
We always have discussions about price and things, but there is nothing unusual about today's discussions. It goes alongside what we have been. You know, we have planned this fourth joint venture and signed it in March, after the war started, with the plans and seed portfolio closing in October, in November. Everything is going to plan. I cannot tell you that it is different. It has to be said that these are probably some of our best assets which we ever generated or created. We still see a lot of appetite to do it. We've agreed it, we have it in writing that they want to go ahead with it.
We are doing due diligence, so there's nothing else I can tell you about it.
Perfect. That's good news. Thanks for that. I got another question on the EPRA NTA. I actually see a lot of positives. You did a closing premium, there was some yield compression, indexation, you started some new developments. What did offset this? What made the EPRA NTA growth come in flat?
It's the yield.
Okay.
It's the yield compression that obviously favorably impacted the results last year that we're lacking. You know, as you saw on the operating EBITDA, actually our operating results from the development is higher this year than it was last year. It's really on the yield compression that boosted the results in the first half of 2021.
I do account some valuation gains and the like, so now I would expect some growth, right? Or am I missing something?
Sorry. You're saying you would have expected more growth?
Yeah, a bit more NTA growth, with closings in the pipeline, bit of yield compression, indexation, new developments. Am I missing something here which was negative?
Yeah. Yeah, there's obviously the share issue that happened as well.
Yeah.
The denominator has changed. You see that the total has, if you look at the absolute, there's still growth.
You're welcome. Thanks. I'll calculate myself also a bit more. Last question from my side, then on Moerdijk. Looking at the development potential, is it correct that you now bought all the land of?
Yes. We are in a 50/50 with them indeed. Yeah.
This is still 50/50. The development potential is of 180,000 square meters.
Yeah.
Half of that is for you.
Yeah.
Yeah. It's still a 50/50, yeah.
Great. Thank you. Yeah, thanks for taking my questions.
Okay. You're welcome. Thank you, Peter.
We'll take our next question from Saravana . RBC, your line is open. Please go ahead.
Hello. Good morning, everyone. Two questions from me. First one, can you talk a bit more about your comments on e-commerce players delaying take up to 2024? You know, how commonly you've heard this and build of evidence, and if you've heard of anyone indicating they will let go of space over the next year, for example? And I guess conversely, are there any sectors suggesting they will continue growing their warehouse capacity over the next year?
Yes, I can. Currently, we have not one single indication that they would go let go warehouse space, certainly not in the portfolio of VGP. We are all going very well. It's all very well and long-term lease. What has happened is in the first half year after the war with Ukraine started, there were a couple of projects we were working on which have been put on pause. Meanwhile, the e-commerce players we were talking to, they have come back, and they are now saying, "Listen, there is a little bit up." I don't think it's got anything to do with the war. I think after the they had a tremendous growth during the COVID crisis, where everybody ordered everything online.
If you look at their results, then they grew last year with 60%, and this year they are flat. If you take it over all the years together, then the growth percentage is still the same. Going forward, they are very confident. If you speak to them, they're confident that they're going to keep growing. Now they took up, of course, a lot of square meters last year and the year before. We are now talking about their. They're re-engaging again, and they're talking about again with the same big projects like we had before, but with deliveries not in 2023, which was foreseen, but 2024 and later. I think e-commerce is. There is nothing wrong with the fundamentals about it.
It's just a ripple in the market which has happened thanks to COVID, which has accelerated to a certain part, their business a lot. Which has now normalized more, and then as they keep on growing and as it get more and more integrated, it will again catch up in the future going forward. Nobody of course knows what the economy is going to do, how deep a recession, if any is coming, will be. We are very confident that the model of e-commerce is as resilient as ever and that they will reattach to growth. We can see that in our discussions with them going forward. Does that answer your question?
Yeah. I guess as a follow-up, aside from e-commerce, you haven't seen much change in sentiment for space take-up, I assume.
No. I have to say that we've leased out quite some space at the moment, and we are leasing out at the moment really a lot, mainly to the big retailers, where we've leased quite some space going forward. We also have done a very nice new industrial projects all over the place. I think going forward, if the energy prices stay where they are, there will be an acceleration in industrial demand also because they will have to go to more energy efficient solutions and new buildings.
It's also for them, if they want to move, it's not easy as the legislation in Europe becomes more and more difficult, and they need more and more players like us to help them. That's why I always stress on technological competence, on competence inside of the different countries to help our tenants really with the legislation, with their permitting, with the design of their buildings and things like that. That is what we are focusing on, and it really generates a lot of demand. If you look at VGP today, we signed more than EUR 22 million. The first half of the year is always a little bit calmer than the second half of the year. We see that now also in the pipeline. It's more actually than last year.
We signed more lease agreements than last year. I don't think there is anything wrong from the demand side. It's still very solid.
Yeah. Okay, good. My next question, so the land bank is, you know, continuing to grow in recent periods. I noticed the under construction pipeline has decreased June this year compared with December in terms of square meters and also by expected rental income. Is that because you have been more selective in projects that you green light to preserve the development margin or perhaps labor material availability? Any color on that movement will be helpful.
Yeah. I already explained it, I think before. There was a huge inflation in the cost price of our buildings under construction, which we have seen. That's why we stopped the topline buildings, because we want to wait a little bit because there is an enormous amount of speculation in the market, and we think it's relatively short-lived time. The inflation we see starts to go down again. Now we see that we are again back in, if we look now at the new buildings which are going to start up, we are coming back at our budget we see at full steam.
There is a lot less hesitant now in the second half here to start up new buildings inside of VGP, looking forward, and it's just prudence. It's more selective indeed. The fact that we have 93.4% today of pre-let of the things which are under construction, it says everything I think. It's the highest pre-let ratio which we've ever had in the history of VGP, and it's just because I wanna be prudent. It's not because I don't believe in the fundamentals of the market. It's not because I don't think. It's just I don't wanna do crazy things.
I wanna be careful and I wanna be selective and I wanna do the things where we get a high margin on and where we are long-term leased and which make really sense. I am a total believer in our land bank, which is really top locations. Going forward, I want to expand it also going forward. I believe in the fundamentals of the business. I'm just careful.
Yeah. Okay. Understood. That's helpful. I suppose the question is, going forward, do you expect a little less pressure on developed margins, so you don't have to be as selective and there won't be as much of a restriction for project starts going forward? Is that fair to say?
In the longer term, yes. We see that the prices are coming down, so there is no reason why. We will see what the economy is going to do, what the demand side will do. At the moment it's very solid. You're asking me to make forward statements, which I don't want to. I'm just going to keep adapting to the market as it evolves, and that's it.
Thanks so much, Saravana. I think there's no further questions. There are no further questions on the line, sir. Please go ahead.
Thank you all very much for being with us, and I hope that the second year is going to bring a little bit of relief and that we get a solution to this war in Ukraine. That would help a lot. But we don't know. I'm going to keep on being careful. Thank you for listening to us and we continue at VGP as usual. Talk to you soon.
Bye-bye.
Bye-bye.