Dana Bordei, Commercial Country Manager VGP Romania

Can a business thrive even in years marked by challenges and instability? The answer is yes! VGP, owner, manager and developer of high-quality logistics and semi-industrial real estate, continued its upward trajectory in 2022, year that it ends with a performance beyond expectations. Part of the success can surely be attributed to the fact that VGP is a family business developed on solid principles, with a steady development up to its current footprint – 19 European countries including Romania, which is a key location on the Group’s map.

Romania stands out in terms of square metres under construction and value of new leases, in VGP portfolio

For VGP, 2022 translated into a strong operational performance, in spite of market challenges and geopolitical uncertainties. In the first ten months of the year, the value of new and renewed leases reached EUR 53.1 million (of which EUR 21.3 million during the last 4 months), bringing the value of committed leases for the year to 31 October 2022 to EUR 291 million (an increase of EUR 34.9 million compared to 31 December 2021). At the same time, the property portfolio also increased up to an occupancy rate of 99.6% (compared to 99.4% at 31 December 2021).

Present time, the Group has 37 projects under construction, cumulating a significant 1,253,000 m², out of which 16 projects – totalling 346,000 m² – started during the year. Together, they are expected to generate EUR 82.8 million worth of additional annual rent once fully built and let. This will happen sooner than later, as the buildings under construction are already 93.7% pre-let.

Also in 2022, VGP had 28 projects delivered, representing 576,000 m², or €31 million in additional annual rent and a further 460,000 m² estimated for delivery by the end of 2022.

Romania ranks second in the VGP Group geographical breakdown of the parks under construction based on square metres, with 11%, after Germany with 57% and ahead of Hungary – 8%, The Netherlands – 6%, Latvia – 6%, Czech Republic – 5%, Spain – 2%, Slovakia – 2%, Portugal – 2% and Austria – 1%. Romania keeps its second place in terms of the value of new leases as well, with over EUR 4.3 million worth.

Sustainability: a concept translated into tangible benefits

“In Romania, we saw an increase in logistics & semi-industrial segment, resulting from the regional distribution centres in the FMCG, automotive and fashion industries. As far as VGP is concerned, 20% of the total growth is due to existing customers expanding their operations within our portfolio. Prioritizing sustainability proved to be the smartest move, generating real value for our customers, who are actively seeking to explore new options for energy generation and increase the overall efficiency of the way they manage their resources. As a result, our offer was highly appreciated, since it enables them to optimize operational costs, customize space partitioning and put state-of-the-art technologies and superior green building standards at work – all so that they can successfully reach their goals,” says Dana Bordei, Commercial Country Manager VGP Romania.

Also worth mentioning is that VGP offices have green energy PPA contracts since January 1st, 2022 and new constructions are equipped with gas-free heating systems where possible, sheltering – to some extent – the tenants from the gas price pressure.

Furthermore, VGP is looking at continuous optimisations to help reach its target of a 55% reduction in carbon emissions of its portfolio ‘in use’ by 2030. To this end, the company encourages and supports customers in the transition to green energy – both in terms of buildings and car and / or truck fleets. For instance, VGP is able to provide, upon request, photovoltaic panel installations designed for each tenant’s specific energy consumption needs, as well as electric vehicle charging stations for both cars and trucks. Just as important – cutting carbon emissions is a ‘work in progress’ for both for buildings built before 2018 and new ones.

Plans for 2023

For next year, VGP remains committed to a couple key goals:

• Pursue the ESG strategy: net carbon neutrality by 2025 and a 50% gross reduction by 2030, among others;

• Continue investments in Romania on two major business directions: 1. complete the construction and leasing of all “Masterplan” targets nationwide & 2. identify possible new locations, depending on the requests received from customers, including transforming vestiges of the past into new, sustainable assets. While the country has plenty to offer in this field, there are many abandoned industrial wastelands that can be revived through smart and efficient investments – area in which VGP excels in both the knowledge and the resources.

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