VIB Vermögen AG, a company specializing in the development, acquisition and portfolio management of commercial properties, was able to further improve its key financial figures in the first half of 2022 despite the challenging market environment. The gross rental income generated in the amount of EUR 46.6 million marks the highest level that has been achieved within a half-year in the company's almost 30-year history.
This increase of 5.2 percent (previous year period: EUR 44.2 million) is attributable to the additional rental income from the properties added to the portfolio during the reporting period. Annualized net rental amounts to around EUR 92.1 million. At the same time, the vacancy rate at Group level remained at a pleasingly low level of 1.4 percent. As of the balance sheet date on June 30, 2022, VIB Vermögen AG's portfolio included 106 commercial properties with a leasable area of just under 1.3 million square meters.
Earnings and equity at record levels
Expenses for financing the portfolio were again reduced and amounted to EUR 6.4 million in the first half of 2022 (previous year: EUR 6.8 million). Adjusted for nonrecurring effects, net income from ordinary activities increased by 10.1 percent to EUR 21.7 million (previous year: EUR 19.7 million). Profit for the period increased significantly by 113.4 percent to just under EUR 35.2 million. The main reasons for this significant increase were the rise in net rental income, the successful sale of the share in the joint venture with WDP GmbH, and the improved interest expense.
Equity grew by EUR 35.7 million since year-end 2021 to EUR 635.3 million as of June 30, 2022 (December 31, 2021: EUR 599.6 million). The equity ratio increased to 45.0 percent as of the balance sheet date on June 30, 2022 (December 31, 2021: 42.3 percent).
Value of real estate portfolio increased further
The VIB Group's real estate portfolio was revalued in the second quarter of 2022. The net asset value (NAV) as the company's net asset value increased significantly to EUR 1.6 billion as of June 30, 2022 (December 31, 2021: EUR 813.2 million). Based on the 27,710,009 shares outstanding as of June 30, 2022, this corresponds to an undiluted NAV per share of EUR 58.06, compared with EUR 29.35 as of December 31, 2021. LTV (loan-to-value), the ratio of the amount used to finance investment property to its market value, decreased since the beginning of the year to 28.2 percent as of June 30, 2022 (December 31, 2021: 44.5 percent).
Funds from operations (FFO), as an indicator of the company's operating cash flows, increased by 10.3 percent from EUR 28.5 million to EUR 31.4 million in the first half of the year. Accordingly, FFO per share also improved from EUR 1.03 to EUR 1.13.
During the reporting period, a number of milestones were achieved which will contribute to VIB Vermögen AG's further growth in future. In January 2022, the extension of a logistics property in Schwäbisch Gmünd was completed and handed over on schedule, increasing the total usable space of the logistics property by 6,100 square meters to 22,500 square meters. In the course of the expansion, the lease contract was also extended to seven years.
In February 2022 the starting signal was given for the marketing of one of the largest development projects of VIB in recent years. The construction of the "NEXT HORIZON" project with a total usable area of around 79,000 square meters is planned on the 215,000 square meters site in Erding. The commercial space is suitable for a wide variety of uses. Three office buildings with a total area of 15,700 square meters are planned, as well as five construction fields with building areas for logistics/light industry-related development of 2,100 to 30,300 square meters . In addition, a parking garage with over 700 parking spaces is planned, which can gradually supply around 50% of the parking spaces with charging capacity and thus fully meet the requirements in terms of electromobility. The properties will be built in accordance with the strict criteria for achieving DGNB Gold sustainability certification. The heat supply via district heating will contribute to this.
Project pipeline grows to a total usable space of around 156,000 square meters
In the first half of the year, a fully developed plot of land in Ingolstadt measuring around 41,000 square meters was also acquired and merged with an adjacent existing plot of land belonging to VIB measuring around 10,000 square meters. A property in the logistics and light industry sector is to be built on the entire site. As a result, the current real estate pipeline continues to grow and includes projects with a total potential floor space of around 156,000 square meters. In addition to its own developments, the company is also continuously examining the possibility of expanding its real estate portfolio through targeted acquisitions.
"I am very pleased to report that we continued our growth trajectory in the second quarter of this year 2022 and are moving forward with several lucrative projects with approximately 156,000 square feet of usable space from our pipeline. The revaluation of our portfolio in the second quarter of 2022 impressively demonstrates the high quality of our buildings and the expertise of our property managers, who create value on a daily basis. In addition, the integration of VIB Vermögen AG into the DIC Asset Group is proceeding smoothly and according to plan, not least thanks to the great commitment of the employees," said Dirk Oehme, CFO of VIB Vermögen AG.
Forecast for 2022 foresees further growth
The Management Board adheres to the forecast published for fiscal 2022. Provided the economic situation in Germany remains stable, it expects to be able to generate sales of between EUR 103 and 109 million. EBT adjusted for valuation effects and special items is expected to rise to between EUR 67 and 71 million. FFO from operations is expected to increase to between EUR 58 and 62 million in fiscal 2022. With regard to vacancy development, the Management Board expects this to remain in the low single-digit percentage range (December 31, 2021: 1.2 percent). Finally, the average interest rate on the loan portfolio is expected to remain virtually unchanged at the end of 2022 (December 31, 2021: 1.7 percent).
The 2022 half-year report and a current company presentation are available for download at www.vib-ag.de.