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Investing.com -- VGP (EBR:VGP1) posted higher rental income and profit in the first half of 2025, but its shares slipped over 1% on Thursday as the absence of new joint venture deals weighed on its balance sheet.
The real estate group reported net rental income of €108.7 million, an 18.6% increase from a year earlier.
Proportionally consolidated gross rental income rose 16% to €119.2 million. Annualized rental income reached €298 million, up 9.5% in the first half and 22% higher year over year.
Leases signed during the period totaled 353,000 square meters, compared with 349,000 square meters in the first half of 2024.
Construction activity remained active. VGP completed 11 projects covering 264,000 square meters, with a prelet rate of 96.3% and annualized rental income of €17.6 million.
Another 36 projects are under construction, representing 846,000 square meters and expected annualized rental income of €72.8 million, with 73% already prelet.
The company’s land bank expanded to 9.7 million square meters after 633,000 square meters of acquisitions in the first six months of the year.
Net valuation gains totaled €159 million, up from €107 million in the same period last year. Operating profit climbed 36.8% to €252 million.
Net profit reached €180.5 million, compared with €141 million a year ago, while earnings per share rose 27.6% to €6.61. Net tangible assets per share were €93.46, 4.8% higher than a year earlier.
The lack of new joint venture deals reduced capital recycling to €35.6 million, down from €662 million in the first half of 2024.
“The lack of fresh JV inflows has left leverage climbing above 50%, especially given VGP’s historical reliance on such partnerships to recycle capital and fund growth but VGP expects more transactions happening in H2,” said analysts at Jefferies in a note.
Proportional net debt rose 10% to €3.3 billion, and the loan-to-value ratio increased to 50.3% from 48.3% at the end of 2024. The company said it expects more joint venture transactions in the second half.