Warehouses De Pauw (WDP) Q2 2024 earnings summary

Executive summary

• Launched #BLEND2027 growth plan, targeting €1.5bn investments and 6% annual EPS growth through 2027, with €500m new investments in H1 2024 and a total pipeline of €863m at a 7% yield, mainly in Western Europe.

• EPRA Earnings per share reached €0.71 in H1 2024, up 7% y/y on an underlying basis, supported by inflation-proof cash flows and high occupancy.

• Net result (IFRS) - Group share surged to €214.6m from €29.5m y/y, driven by portfolio revaluations and positive interest rate hedging.

• Maintained a high occupancy rate of 97.8% as of June 2024, with average rental uplift of 15% on renewals and a reversionary potential of 12%.

• 100% of December 2023 capital increase invested within 6 months.

Financial highlights

• Rental income rose 13.5% y/y to €185.3m; property result up 11% to €192.4m, driven by pre-let projects, acquisitions, and 3.3% organic rental growth.

• EPRA Earnings: €156.1m in H1 2024, up 8.1% y/y.

• Operating result before portfolio result increased 9.2% y/y to €172.3m; operating margin at 89.6%.

• EPRA NTA per share: €19.9 as of June 2024, down from €20.1 at year-end 2023, reflecting dividend distribution and portfolio revaluation.

• Occupancy rate at 97.8% (vs. 98.5% end 2023); like-for-like rental growth 3.3%.

Outlook and guidance

• 2024 guidance: EPRA EPS of €1.47 (+5% y/y) and DPS of €1.18 (+5% y/y), payout ratio 80%.

• #BLEND2027 plan targets EPRA EPS of €1.70 by 2027, with €1.5bn in investments and 6% annual EPS growth.

• Assumes minimum average occupancy of 98%, organic growth of 3%, and cost of debt below 2%.

• Dutch REIT regime ends in 2024, with a -€0.05 EPS impact from 2025 and €11m annual tax increase.