VGP NV: The Belgian Developer That Built Europe's Logistics Backbone

I. Introduction & Episode Roadmap

Picture a Belgian entrepreneur walking through the grey industrial outskirts of a newly post-communist Czech town in 1993. The Berlin Wall had fallen just four years earlier, the Velvet Divorce was still fresh, and Western companies were rushing eastward into a landscape that seemed equal parts opportunity and chaos. Jan Van Geet was 22 years old, dispatched by his employer—a Belgian diaper manufacturer—to set up a factory in a country where modern warehouses barely existed and logistics infrastructure remained stuck in the Soviet era.

What Van Geet saw wasn't just a temporary assignment. He saw a gap in the market so vast that it would take decades to fill. Western companies flooding into Central Europe needed somewhere to store their goods, assemble their products, and distribute their wares. They needed modern buildings, built to specification, close to highways and cities. And nobody was building them.

Today, VGP is a Belgian industrial park developer and lessor that operates assets in 18 European countries, both directly and through several 50:50 joint ventures. As of 2023, VGP has a total portfolio encompassing over 2.4 million square meters of lettable area across Europe, specifically in countries like Germany, the Czech Republic, and Hungary.

The numbers tell a remarkable story. Since December 7, 2007—the date VGP listed on the Brussels stock exchange—the company's market capitalization has grown from approximately €206 million to over €2 billion, representing a compound annual growth rate of 14.26% over nearly two decades. In an industry often dismissed as boring "boxes" near highways, VGP has quietly assembled one of Europe's most valuable development platforms.

VGP NV announced a net profit of €287 million for FY2024, an increase of €200 million or 229% versus FY'23, with net asset value growth of 8.4%, up to €2.4 billion. As of June 2024, the Gross Asset Value of VGP, including the joint ventures at 100%, amounted to €7.4 billion.

The story of VGP touches on several themes that resonate far beyond industrial real estate: first-mover advantage in emerging markets, the power of founder-led businesses, capital recycling as a growth engine, and how e-commerce transformed demand for a previously unglamorous asset class. Van Geet didn't just build warehouses—he built a machine for producing them, then engineered a way to finance that machine without ever needing to tap traditional capital markets for equity.

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II. The Origin Story: Jan Van Geet & The Czech Republic Opportunity (1993-1998)

In the early 1990s, Central and Eastern Europe represented the world's greatest privatization experiment. State-owned enterprises were being sold off, foreign investment was flooding in, and entrepreneurs from Western Europe smelled opportunity. But behind the headlines about newly minted oligarchs and shock therapy economics lay a more mundane reality: the physical infrastructure to support modern commerce simply didn't exist.

Jan Van Geet, born in 1971 in Dendermonde, Belgium, began his professional career with the diaper manufacturer Ontex, owned by the Van Malderen family, in Buggenhout. Shortly afterwards, he moved to the Czech Republic to set up a new factory for the Ontex company. This was the springboard for Van Geet to launch his own company.

He started in the Czech Republic in 1993 and was manager of Ontex in Turnov, a producer of hygienic disposables. Until 2005, he was also managing director of WDP Czech Republic. This dual experience—running a manufacturing operation that needed modern logistics space, while also working with WDP (Warehouses De Pauw, another Belgian logistics developer)—gave Van Geet a unique perspective on both the demand side and the supply side of the equation.

The opportunity was profound but not immediately obvious to outsiders. In 1993, the Czech Republic was barely a year old as an independent nation. Its warehouse stock consisted primarily of Soviet-era facilities—poorly insulated buildings with low ceilings, inadequate loading docks, and no modern building systems. International companies entering the market had to choose between substandard facilities or building their own from scratch.

Van Geet understood something crucial: as EU expansion approached, the region would need massive amounts of modern logistics space. The Czech Republic's geographic position—at the crossroads of Germany, Poland, Austria, and Slovakia—made it ideal for pan-European distribution. Labor costs were a fraction of Western European levels. The question wasn't whether demand would come, but who would be positioned to capture it.

Van Geet founded the company in 1998 in the former Czech Republic. Founded in 1998 by Jan Van Geet, the company has its headquarters in Antwerp, Belgium. VGP started by developing warehouses and logistics parks, and over the years, it has expanded its portfolio significantly.

The founding of VGP coincided with the final years of preparation before the Czech Republic's EU accession in 2004. Van Geet was betting that EU membership would accelerate investment flows, require infrastructure upgrades, and create structural demand for precisely the kind of modern logistics facilities VGP would develop.

Van Geet, like his father, is passionate about the countryside and currently resides in the Czech Republic with his Czech wife and their two daughters. This wasn't just a business venture for Van Geet—it became his life. He built roots in the region, learned the language, and developed relationships with local authorities and business communities that would take competitors years to replicate.

The founding coincided with economic turmoil elsewhere—1998 brought the Russian financial crisis and Asian contagion—but Central Europe proved relatively insulated. Van Geet's early projects were modest: single-building developments for specific tenants, often on the outskirts of Prague or in secondary Czech cities. The deals were small by Western standards, but each one built expertise, relationships, and track record.

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III. Building the Business Model: The Integrated Developer (1998-2007)

What distinguished VGP from the beginning was not merely that it developed logistics buildings, but how it developed them. Van Geet's vision rejected the conventional bifurcation of the industry: in most markets, developers built properties and sold them, while investors bought properties and held them. VGP would do both, creating an integrated model that captured value at every stage.

Van Geet points out that, despite appearances, VGP is not a real estate investment company but a construction company that retains its buildings once completed, thus creating value for shareholders. This philosophical distinction matters enormously. A pure developer lives and dies by transaction volumes—build, sell, repeat. A pure investor clips coupons from rental income but doesn't capture development profits. VGP's integrated model meant it could develop buildings at cost, retain them for rental income, and benefit from both the development margin and the long-term asset appreciation.

The business model worked like this: VGP would acquire land—typically greenfield sites near major transportation corridors—secure permits, design buildings to specification, manage construction in-house, and then lease the completed buildings to tenants on long-term contracts. Unlike some developers who would flip completed buildings immediately, VGP held onto them, building a growing portfolio of income-generating assets while simultaneously developing new projects.

The key partnership that enabled this model came in 2002. Bart Van Malderen, who joined VGP in 2002, holds currently 47% of the group against 12% for Van Geet. Partnership between families Van Malderen and Van Geet is rooted in shared farming origins in Buggenhout, with a history of mutual support.

The Van Malderen family—the same family that owned Ontex, where Van Geet started his career—became the majority shareholders in VGP. This wasn't merely a financial investment; it was a long-term partnership rooted in personal relationships and shared values. The families came from the same Belgian community, shared similar backgrounds in family business, and took similar long-term approaches to capital deployment.

This ownership structure proved critical to VGP's development. Unlike venture-backed or private equity-controlled competitors who faced pressure to exit investments within defined timeframes, VGP could afford to think in decades rather than quarters. The patient capital enabled what might be called the "land bank strategy"—acquiring prime development sites years before they would be needed, holding them until market conditions were optimal, and developing them with a long-term ownership mindset.

Approximately half of VGP's premises are leased by companies from the automotive industry, such as Volkswagen and BMW. The automotive sector's demanding requirements—precise delivery schedules, quality standards, just-in-time supply chains—meant that serving automotive clients established VGP's reputation for reliability and technical competence. These weren't simple box warehouses; they were sophisticated facilities with specific loading configurations, temperature controls, and building systems tailored to automotive logistics.

VGP's in-house capabilities set it apart from competitors who relied heavily on third-party contractors. By maintaining architects, engineers, and construction management expertise internally, VGP could respond quickly to tenant requirements, maintain quality control, and capture margins that would otherwise leak to subcontractors. The integrated model also created institutional knowledge—lessons learned on one project could be applied immediately to the next, creating compounding efficiency gains.

By 2007, VGP had proven the model worked, but the company faced a classic entrepreneurial challenge: how to scale. The integrated approach was capital-intensive. Every new development tied up equity for years before generating returns. The land bank strategy required significant upfront investment. Growth was constrained by the available capital.

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IV. Inflection Point #1: The IPO & Going Public (2007)

The decision to go public in 2007 represented a calculated bet on VGP's ability to raise capital efficiently while maintaining the long-term orientation that had driven its success. VGP was listed in Brussels stock exchange in 2007.

Euronext Brussels announced that from December 7, 2007, the ordinary shares and strips issued by VGP would be admitted to trading on Eurolist by Euronext. Based on decision of the general director of the Prague Stock Exchange conditional trading with the share issue VGP started on December 7, 2007. The Offering consists of dual public offerings at the Prague Stock Exchange and at the Euronext Exchange in Brussels.

The dual listing was symbolic and strategic. The Brussels listing provided access to European institutional capital and aligned VGP with its Belgian corporate heritage. The Prague listing acknowledged the company's Central European roots and operational center of gravity. The message to investors was clear: VGP was a pan-European platform, not just a Belgian company with Czech assets.

The timing, however, proved spectacularly unfortunate—though not fatally so. VGP went public in December 2007, just months before the global financial system would begin its collapse. Lehman Brothers' bankruptcy in September 2008 would trigger the worst financial crisis since the Great Depression. Real estate developers around the world would fail as credit markets froze and property values plummeted.

VGP survived for reasons that illuminate its business model's strengths. First, the company's tenants were primarily blue-chip manufacturers and logistics providers—Volkswagen, BMW, major automotive suppliers—on long-term leases. Unlike speculative office developers or residential builders, VGP had contracted rental income that would continue flowing regardless of market conditions. Second, the Central European markets where VGP operated were somewhat insulated from the worst of the crisis, which centered on U.S. and Western European banks. Third, the family-controlled ownership structure meant VGP faced less pressure to realize losses or sell assets at distressed prices.

The years 2008-2010 were lean but not catastrophic. Development activity slowed. New construction projects were delayed or scaled back. But the existing portfolio continued generating income, and VGP maintained its balance sheet. When competitors stumbled—overleveraged developers forced to sell at steep discounts, distressed assets flooding the market—VGP was positioned to capitalize.

The post-crisis recovery revealed the crisis's silver lining: VGP had maintained its platform, its team, its tenant relationships, and its land bank. When investment appetite returned, the company was ready to accelerate.

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V. Inflection Point #2: The E-Commerce Boom & German Expansion (2010-2015)

The 2010s brought a structural transformation to the logistics real estate sector that would accelerate VGP's growth beyond anything the founders imagined. E-commerce—online retail's share of total commerce—began rising exponentially, and every percentage point increase in online sales translated into massive demand for warehouse space.

The arithmetic was compelling: a dollar of e-commerce sales requires roughly three times as much logistics space as a dollar of traditional retail sales. Physical stores serve as their own storage; inventory sits on shelves awaiting customers. Online retail, by contrast, requires fulfillment centers to store goods, pick them, pack them, and ship them. Returns generate additional handling. The speed expectations customers developed—next-day delivery, then same-day delivery—required inventory positioned closer to population centers, multiplying the number of distribution points needed.

The company's development activities have been characterized by strategic partnerships with major logistics players, including Amazon and logistics service providers. VGP found itself at the center of this transformation. As Amazon expanded across Europe, as traditional retailers scrambled to build online capabilities, as third-party logistics providers scaled to meet demand, all of them needed exactly what VGP built: modern, well-located logistics facilities.

The strategic pivot to Germany during this period proved transformational. Germany represented Europe's largest economy, its most developed logistics market, and its most demanding customers. Succeeding in Germany would validate VGP's capabilities and provide a platform for expansion into Western Europe.

Spain was our second significant bet in our European extension after Germany, following our first years in the Czech Republic and bordering countries. VGP has been present in Spain since July 2015.

The German expansion required VGP to adapt its Central European playbook. Land costs were higher. Permitting was more complex. Competition from established players like Prologis and Segro was fierce. But VGP brought advantages: its integrated model meant faster project delivery; its build-to-suit expertise meant it could handle complex tenant requirements; and its willingness to develop in secondary markets where larger competitors feared to tread opened opportunities others missed.

The land bank strategy proved particularly valuable during this period. The geographic breakdown of the portfolio by value is as follows: Germany (46.2%), Spain (8.3%), Austria (4.7%), the Netherlands (3.8%), Western Europe (7.2%), the Czech Republic (10.1%), Central and Eastern Europe (15.7%) and the Baltic countries (4%). By 2024, Germany would represent nearly half of VGP's portfolio value—a remarkable shift from the company's Czech origins.

By 2015, VGP had transformed from a Central European specialist into a pan-European platform. But growth required capital, and the integrated model's capital intensity remained a constraint. The solution would come from an unlikely source: one of the world's largest insurance companies.

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VI. Inflection Point #3: The Allianz Joint Ventures (2016-Present)

The partnership with Allianz Real Estate, beginning in 2016, represented VGP's most important strategic innovation—a capital recycling model that would enable exponential growth while maintaining the company's development DNA.

VGP, the European logistics real estate developer, has entered into a €500m 50/50 joint venture with Allianz Real Estate. The deal represents one of the largest specialist logistics and industrial real estate agreements of its type in Europe.

The structure was elegant: VGP would develop buildings at its own risk—acquiring land, securing permits, constructing facilities, signing tenants. Once a building was completed and leased, VGP would sell a 50% stake to the Allianz joint venture while retaining the other half. Crucially, VGP would continue managing the assets—providing asset management, property management, and development management services—for fees.

Jan van Geet explained: "Through the combination of the two, we can continue to recycle our invested capital and re-invest the disposal proceeds in the development and expansion of our portfolio."

The brilliance of this model lies in its multiple value creation levers. First, VGP captures development profits—the difference between development cost and market value. Second, VGP retains 50% ownership of stabilized, income-generating assets. Third, VGP earns ongoing fee income for managing the joint venture's portfolio. Fourth, the cash from selling the 50% stake recycles into new developments, enabling VGP to start more projects without raising additional equity.

The vehicle, the fourth such venture between Allianz Real Estate and VGP since 2016, will develop a portfolio of prime logistics assets in Germany, the Czech Republic, Hungary and Slovakia. Allianz Real Estate and VGP are targeting to grow the joint venture to a gross asset value of EUR2.8 billion within five years by exclusively acquiring prime assets developed by VGP.

For Allianz, the partnership provided access to a steady pipeline of grade-A logistics assets without needing to build development capabilities in-house. Insurance companies need long-duration assets that generate stable cash flows to match their liabilities. Modern logistics real estate, leased to creditworthy tenants on long-term contracts, fits perfectly. The joint venture gave Allianz exclusive access to VGP's pipeline in specific geographies, ensuring a consistent flow of investment opportunities.

VGP has entered into four 50:50 joint ventures with Allianz Real Estate: (i) the First Joint Venture i.e. VGP European Logistics S.à.r.l., (ii) the Second Joint Venture i.e. VGP European Logistics 2 S.à.r.l., (iii) the Third Joint Venture i.e. VGP Park München GmbH and (iv) the Fourth Joint Venture i.e. VGP European Logistics 3 S.à.r.l.

The model's success led to expansion and replication. In July 2023, VGP and Deka Immobilien announced the setup of a 50:50 joint venture, which is set to acquire over time a defined portfolio of 5 Parks with 20 buildings of German semi-industrial and logistics assets developed by VGP. The total value of the joint venture is €1.1 billion.

This joint venture, the largest European logistics transaction of 2023 so far, is expected to contribute substantially to our European portfolio and fits within our aim to continue our growth as a real estate manager. Adding Deka as a joint venture partner diversified VGP's capital sources and demonstrated that the model could be replicated beyond Allianz.

VGP is well financed and strongly capitalized: shares listed on Euronext Brussels since 2007 and included in the EPRA Nareit Developed Europe Index since 2022 and the BEL ESG Index since 2023. Successful and long-term partnership with Allianz Real Estate since 2016 and a new joint venture was set up with Deka Immobilien in 2023.

The joint venture model transformed VGP from a capital-constrained developer into a capital-efficient platform. Where once each development tied up equity for years, now VGP could recycle capital within 18-24 months of project completion, redeploying the proceeds into new developments. The flywheel accelerated: more developments meant more joint venture transactions, which meant more capital recycling, which meant more developments.

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VII. Modern Era: Scaling the Machine (2018-2022)

By the late 2010s, VGP had built a development machine—an integrated platform for identifying opportunities, acquiring land, developing buildings, attracting tenants, and recycling capital through joint ventures. The years 2018 through 2022 saw this machine scale to levels that would have seemed impossible a decade earlier.

VGP announced strong rental activity with €73.4 million of signed and renewed leases bringing the annualised committed leases to €303.2 million, an 18.4% YoY increase. 44 projects delivered representing a record 1,141,000 m² of lettable area.

The COVID-19 pandemic, paradoxically, supercharged demand. Lockdowns accelerated e-commerce adoption by years. Consumers who had never shopped online discovered the convenience. Retailers who had resisted digital transformation realized they had no choice. Supply chain disruptions highlighted the value of inventory buffers and regional distribution. All of this translated into unprecedented demand for logistics space.

VGP's development volumes reflected this surge. CEO Jan Van Geet stated: "Over the year we delivered a record number of >1.1 million square meters of high quality assets and, as a result, our net rent and renewable energy income increased with 51% at share to €107 million."

The pandemic also validated VGP's geographic positioning. E-commerce growth proved particularly strong in Central and Eastern Europe, where online retail penetration had historically lagged Western Europe. As consumers in Poland, Czech Republic, Hungary, and Romania embraced online shopping, the demand for modern logistics infrastructure exploded.

VGP NV will be included in the Euronext Brussels' BEL20 Index, effective at the European markets' after market close on Friday the 18th of March, 2022. Comprised of the Euronext Brussels' 20 largest listed companies ranked by free float adjusted market capitalisation and liquidity, the BEL20 Index is one of Euronext's classic Blue Chip Indices.

VGP announced that its share has been admitted to the FTSE EPRA Nareit Developed Europe Index. Its inclusion will be effective from the start of trading on Monday the 20th of June 2022.

Index inclusion represented institutional validation. The BEL20 is Belgium's equivalent of the Dow Jones—a blue-chip index representing the country's largest and most liquid companies. The EPRA Nareit Developed Europe Index tracks European real estate companies, attracting flows from investors benchmarked to the index. Both inclusions increased VGP's visibility and expanded its shareholder base.

By year-end 2022, VGP had grown to a scale that would have seemed unimaginable at its founding. The platform spanned 17 countries, employed hundreds of specialists, and managed billions in assets. The joint venture model was firing on all cylinders, recycling capital efficiently while generating fee income. The development machine was producing record volumes.

Then the world changed again.

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VIII. Challenges & Resilience: Interest Rates & Ukraine (2022-2023)

The challenges that buffeted VGP in 2022-2023 tested the company's resilience in ways the pandemic had not. Rising interest rates triggered the sharpest repricing in real estate markets since the financial crisis, while Russia's invasion of Ukraine created both direct losses and indirect headwinds.

Although VGP suffered an impairment loss of 1.2 billion euros because of the conflict in Ukraine in 2022, the company and its founder remain key figures in the European real estate sector.

VGP reported an operating profit of €177.5 million before unrealized valuation losses of €293 million, amongst others reflecting a like for like negative revaluation change of 7.33% on VGP's portfolio due to further increasing of market yields.

Central banks' pivot from accommodative to restrictive monetary policy—driven by the inflation surge of 2021-2022—hit real estate valuations hard. Real estate is fundamentally a spread business: investors compare rental yields to risk-free rates. When interest rates rise, property values must adjust to maintain attractive spreads. The "yield expansion" of 2022-2023 meant lower property values across the sector, regardless of operational performance.

For VGP, this macro headwind materialized as unrealized valuation losses—write-downs on the carrying value of properties that reflected higher discount rates rather than any deterioration in underlying performance. The portfolio remained fully occupied. Tenants continued paying rent. Development margins remained healthy. But accounting rules required marking assets to current market values, and current market values were lower.

Management's response revealed the company's operational DNA. CEO Jan Van Geet said: "I am proud of our performance in 2022, in terms of leasing activity it is one of our best years ever, and taking into account the economic and geopolitical challenges it is perhaps our best year thus far, having signed and renewed leases in amount of €73.4 million. Whilst we have booked a devaluation of our portfolio in response to macroeconomic conditions, VGP realized €87.2 million gains on all disposals to JV's in '22, reflecting high double digit IRRs, in what was a record year of closings with our JV partners."

The distinction between operational performance and accounting results matters for understanding VGP's situation. The company had its best-ever leasing year. Development activities continued at pace. Joint venture transactions closed at premiums to book values. The "losses" were primarily unrealized valuation adjustments that would reverse if interest rates normalized.

For FY 2023, VGP announced a net profit of €87.3 million, an increase of €209.8 million versus FY '22. The company executed three joint venture closings resulting in a strong net cash recycling of €676.2 million. All transactions, including those that are committed to close in '24 have been realized or agreed at a premium versus the recognized fair value at year-end '22, resulting in a realized gain of €59 million in '23 on the effectuated transactions.

The return to profitability in 2023 demonstrated that the 2022 challenges were temporary rather than structural. The business model remained intact. The joint venture machine continued operating. Most importantly, the counter-cyclical opportunity that management had anticipated began materializing—rising interest rates created distress elsewhere in the market, producing acquisition opportunities for well-capitalized players.

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IX. The Renewable Energy Pivot & ESG Strategy

One of VGP's most interesting recent strategic initiatives involves leveraging its physical asset base—millions of square meters of rooftop space—for renewable energy production. What began as a sustainability initiative has evolved into a potential profit center.

VGP Renewable Energy N.V. was set up by VGP N.V. in 2020. Its purpose is to enable the green energy transition of VGP Group and assist its clients in making their businesses more sustainable in a cost-effective way.

Across Europe, we invest, own and operate photovoltaic systems to power our parks and reduce the carbon footprint of our tenants. With a current installed and planned capacity of 264.9 megawatts peak and a goal to reach 300 megawatts, we are creating a greener real estate landscape.

The logic is compelling: VGP's logistics buildings have enormous flat rooftops perfectly suited for solar panel installation. By installing and operating photovoltaic systems, VGP can generate renewable electricity and sell it to tenants—typically at prices below grid electricity while still earning attractive returns on capital invested.

The European Investment Bank (EIB) and VGP Renewable Energy N.V. signed a €150 million framework loan that will support solar panel installation on the roofs of VGP's logistics centres across the European Union. The ten-year loan will contribute to accelerating the energy transition, strengthen the security of power supply and boost climate action.

The focus of this programme is the installation of rooftop solar photovoltaic systems. The newly installed photovoltaics will generate up to 190 GWh in renewable electricity per year, enough to cover the consumption of 110,000 Europeans.

Photovoltaic capacity increased by 53% year-on-year and operational capacity reached 155.7 MWp (compared to 101.8 MWp in December 2023).

The renewable energy business creates multiple benefits. For tenants, it provides access to competitively priced green electricity, helping them meet sustainability commitments. For VGP, it generates additional revenue from existing assets, improves tenant relationships, and enhances ESG credentials. The EIB financing demonstrates how VGP can access preferential terms by aligning its investments with EU policy objectives.

In 2020, he launched the VGP Foundation, which aims to invest 2% of VGP's annual profits in several areas of social and cultural interest. The foundation represents Jan Van Geet's personal commitment to giving back—a recognition that VGP's success has been built on relationships with communities across Europe.

The ESG strategy extends beyond renewable energy. VGP's buildings increasingly incorporate sustainable certification (BREEAM, DGNB), biodiversity enhancements, and energy efficiency measures. 100% of projects launched will be certified and 97% of them will achieve at least BREEAM Excellent certification or equivalent. These features have moved from nice-to-have to must-have as tenants—particularly large corporates with ESG commitments—increasingly require sustainable buildings.

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X. Playbook: Business & Investing Lessons

VGP's 25-year journey offers lessons that extend well beyond industrial real estate. The company's success reflects principles that apply across industries and investment contexts.

Lesson 1: First-mover advantage in emerging markets creates durable competitive advantages.

When Van Geet arrived in the Czech Republic in 1993, he saw opportunity where others saw chaos. By establishing relationships with local authorities, understanding regional dynamics, and building expertise in Central European markets years before institutional capital arrived, VGP created advantages that would compound over decades. The land bank assembled in the 2000s and early 2010s—prime sites near major cities—appreciated substantially as markets matured and competition increased.

The lesson transcends geography: being early to a market means less competition for assets, closer relationships with stakeholders, and deeper institutional knowledge. These advantages don't disappear when others arrive—they compound.

Lesson 2: The integrated model creates compounding advantages.

VGP's decision to build in-house capabilities across the value chain—architecture, engineering, construction management, leasing, property management—created a fundamentally different business than competitors who outsourced these functions. Each capability strengthens the others. Understanding construction costs improves development decisions. Managing properties reveals what tenants value. Leasing experience informs design choices.

VGP operates a fully integrated business model with capabilities and longstanding expertise across the value chain. Founded in 1998 as a Belgian family-owned real estate developer in the Czech Republic, VGP with a staff of circa 371 FTEs today operates in 17 European countries directly and through several 50:50 joint ventures.

Lesson 3: Capital recycling through joint ventures is brilliant financial engineering.

The Allianz partnership model—develop at own risk, sell 50% upon stabilization, retain management—enables VGP to grow faster than retained earnings would permit while avoiding dilutive equity issuances. The model works because it aligns interests: VGP captures development profits and ongoing fees; Allianz gets access to grade-A assets and professional management; tenants benefit from well-capitalized, long-term-oriented owners.

The acquisition price for the seed portfolio corresponds to a gross asset value of over €700 million, resulting in a cash recycling for VGP of over €450 million. A further two closings with the Fifth Joint Venture are set for 1Q24 and 3Q24, resulting in a total gross asset value of over €1.1 billion to be transferred and cash recycling for VGP of over €700 million for the three transactions combined.

Lesson 4: The land bank is the moat.

Total secured landbank stands at 8.7 million sqm at the end of 2024 representing a development potential of over 3.6 million sqm. Prime development land near major cities is finite and increasingly difficult to secure. VGP's land bank—assembled over decades—represents years of development pipeline that competitors cannot easily replicate. When a tenant needs a build-to-suit facility in a specific location, having the land already secured provides a decisive advantage.

Lesson 5: Founder-led culture matters.

Jan Van Geet, CEO and Founder of VGP, said: "For VGP the inclusion in the BEL20 Index is another milestone in our 24 year history and will increase our visibility in the market." The concentrated ownership—with the founding families controlling majority voting rights—enables long-term decision making that publicly traded companies with dispersed shareholders often cannot achieve. VGP can make counter-cyclical investments, maintain discipline during booms, and think in decades rather than quarters.

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XI. Analysis: Porter's Five Forces & Hamilton's Seven Powers

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Porter's Five Forces Analysis

Threat of New Entrants: MODERATE

Entering the logistics real estate development market requires significant capital, local expertise, and tenant relationships. However, barriers are not insurmountable—well-capitalized private equity firms, sovereign wealth funds, and major REITs can enter markets through acquisitions or by hiring teams. VGP's advantage lies in its established land bank and local relationships, which provide head starts that cannot be easily replicated.

Bargaining Power of Suppliers: LOW TO MODERATE

Construction materials and labor are largely commoditized. VGP's in-house capabilities reduce dependency on contractors. Scale provides procurement leverage—VGP's volume enables favorable terms with suppliers. The integrated model insulates VGP from supplier pricing power that might affect less capable competitors.

Bargaining Power of Buyers (Tenants): MODERATE

Large tenants—Amazon, BMW, major logistics providers—possess significant negotiating power. However, prime locations near cities are genuinely scarce, particularly in mature Western European markets. The property portfolio which has an average building age of 4.2 years, is nearly fully let with occupancy at 98%. The consistently high occupancy suggests demand exceeds supply in VGP's target locations.

Threat of Substitutes: LOW

E-commerce structurally requires physical logistics infrastructure—there's no substitute for a warehouse. Urban proximity requirements limit alternatives. Nearshoring and reshoring trends (bringing manufacturing and distribution closer to end markets) increase rather than decrease demand for well-located logistics space.

Competitive Rivalry: HIGH

The lion's share in the total industrial space in the CEE region belongs to CTP (13%), Prologis (10%), Panattoni (8%), P3 Logistic Parks (7%) and SEGRO (4%), totalling approximately 42% of the entire market. Competition for prime land and blue-chip tenants is intense. However, the market continues growing—e-commerce penetration gains, inventory builds, supply chain regionalization—creating opportunity for multiple players to succeed.

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Hamilton's Seven Powers Analysis

Scale Economies: MODERATE

Pan-European presence enables efficient capital deployment and centralized expertise. However, real estate is inherently local—understanding German zoning is different from Czech zoning—limiting the applicability of scale advantages.

Network Effects: WEAK

Limited direct network effects in logistics real estate. Some indirect effects exist through tenant relationships (satisfied tenants expand with VGP; referrals occur), but these are modest compared to platform businesses.

Counter-Positioning: STRONG

This is VGP's most important structural advantage. Traditional REITs focus on income stability, not development. They buy stabilized assets from developers. Pure developers build and sell, lacking asset management capabilities. VGP's integrated model—develop, hold, manage, recycle through JVs—is fundamentally different and difficult to replicate without cannibalizing existing business models.

Switching Costs: MODERATE

Build-to-suit facilities create stickiness—tenants invest in customization and integration with local operations. Long lease terms (typically 5-10+ years) provide contracted revenue. However, at lease expiry, tenants can and do move if better options emerge.

Branding: MODERATE

VGP's reputation for quality, reliability, and fast decision-making matters. The "family business" positioning differentiates from bureaucratic institutional competitors. Repeat business from satisfied tenants demonstrates brand value.

Cornered Resource: STRONG

The land bank represents VGP's most defensible resource. Total secured landbank stands at 8.7 million sqm at the end of 2024. Prime locations near major cities with direct access to transportation infrastructure are genuinely scarce. VGP's decades of relationship-building with local authorities—understanding permitting processes, developing trust—cannot be quickly replicated.

Process Power: STRONG

VGP has a fully integrated business model with extensive expertise and many years of experience along the entire value chain. VGP was founded in 1998 as a family-owned Belgian property developer in the Czech Republic and today operates with around 368 full-time employees in 17 European countries directly and through several 50:50 joint ventures.

The integrated development capabilities—architects, engineers, construction managers, leasing specialists—represent institutional knowledge accumulated over 25+ years. The joint venture structuring with Allianz, Deka, and AREIM demonstrates sophisticated capital markets expertise that pure developers lack.

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XII. Bear vs. Bull Case

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Bull Case

1. Structural demand tailwinds persist. E-commerce penetration continues rising across Europe. Nearshoring and reshoring increase demand for regional distribution. Supply chain resilience becomes a corporate priority, requiring more inventory buffers and more warehouse space.

2. Interest rate normalization. As inflation moderates and central banks reduce rates, real estate valuations should recover. The unrealized losses of 2022-2023 could reverse, driving NAV growth.

3. ESG premium emerges. Sustainable buildings increasingly command rent premiums and attract institutional capital. VGP's renewable energy capabilities and sustainability certifications position it favorably.

4. Land bank optionality. The 8.7 million sqm development pipeline is not fully reflected in current valuations. As VGP monetizes this land bank through development and joint venture transactions, value should be realized.

5. Joint venture fee income growth. As joint venture portfolios grow, recurring management fees become increasingly material, providing stable income regardless of development cycles.

6. Founder alignment. The concentrated ownership ensures long-term orientation. Management's interests align with shareholders because management is a major shareholder.

7. Expansion runway. VGP Denmark has secured a large area next to the motorway at Vejle S, marking the initial step towards VGP Group's first Danish project. VGP continues entering new markets, extending its geographic footprint.

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Bear Case

1. Interest rate sensitivity persists. If rates remain higher for longer, real estate valuations remain under pressure. Development economics become less attractive with higher financing costs.

2. E-commerce normalization. Post-COVID e-commerce growth has decelerated. If online retail penetration stabilizes below bullish projections, demand growth slows.

3. Competition intensifies. Well-capitalized competitors—Prologis, Blackstone-backed platforms, CTP—continue expanding in European markets. Competition for land and tenants increases.

4. Concentration risk. Heavy exposure to Germany (46% of portfolio) and Central Europe creates geographic concentration. Regional economic weakness could impact performance.

5. Development risk. Despite the integrated model, speculative development can go wrong. Tenant bankruptcies, construction cost overruns, or permitting delays could impact returns.

6. Governance structure. The controlling shareholder structure that enables long-term orientation also limits minority shareholder influence. Related-party transactions with controlling shareholders require scrutiny.

7. Tenant concentration. Dependency on major logistics and automotive clients creates concentration risk. Amazon's logistics strategy changes, for instance, could impact demand.

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XIII. Key Performance Indicators to Track

For investors monitoring VGP, three metrics deserve particular attention:

1. Annualized Committed Leases

This metric captures both existing rental income and contracted future income from leases on properties under development. It represents the forward-looking revenue base and is the single best indicator of VGP's growth trajectory. VGP achieved a historic record of €91.6 million of new and renewed leases signed during 2024 bringing the annualised committed leases at year end to €412.6 million, an increase of +17.6%.

Strong committed lease growth indicates healthy tenant demand, successful leasing of new developments, and rental increases on renewals. Weak growth would suggest demand softening or competitive pressure on pricing.

2. Occupancy Rate

The property portfolio which has an average building age of 4.2 years, is nearly fully let with occupancy at 98%. Occupancy near 99% demonstrates that demand exceeds supply in VGP's locations. Declining occupancy would signal softening demand or oversupply in specific markets. Watch for divergence between VGP's occupancy and broader market vacancy rates—a widening gap would suggest VGP's locations and building quality are outperforming.

3. Joint Venture Transaction Volume and IRRs

The joint venture model's success depends on VGP's ability to transact at attractive values. Track the gross asset value of closings with joint venture partners and the realized gains on transactions versus book values. All transactions have been realized or agreed at a premium versus the recognized fair value. Consistent premiums to book value validate the development model; discounts would suggest either overly optimistic carrying values or deteriorating market conditions.

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XIV. Epilogue: VGP in 2024-2025 & The Future

VGP NV announced results for 2024: A net profit of €287 million, an increase of €200 million or 229% versus FY'23. Net asset value growth of 8.4%, up to €2.4 billion. EBITDA growth of 57% with solid contribution from recurring rental business activities of €204.3 million (+19%), from development activities in amount of €144.8 million (+178%) and in renewable energy of €5.4 million (+236%).

The 2024 results demonstrated VGP's resilience and the continued vitality of its business model. Net profit recovered strongly from the macroeconomic headwinds of 2022-2023. Development activity resumed at elevated levels. The renewable energy business, while still small, grew at triple-digit rates.

286,000 square meters of new development land was acquired during the first four months of 2024 with the acquisitions including, amongst others, VGP's inaugural landplot in Vejle, Denmark. The expansion into Denmark marked VGP's 18th European country, continuing the geographic diversification that has characterized the company's growth.

VGP Park Vejle is our first park in Denmark. The site is located in the northern part of the Triangle Region, a commercially important region in the center of Denmark.

Looking ahead, several questions will shape VGP's trajectory:

Can VGP maintain its development edge as markets mature? The first-mover advantages in Central Europe that propelled early growth are less relevant in mature Western European markets where competition is fierce. VGP's success will depend on continued execution excellence, land bank quality, and client relationships.

Will the renewable energy business become a significant value driver? The economics of rooftop solar are attractive, and VGP has enormous untapped capacity. If management successfully scales this business, it could become a meaningful profit contributor and differentiate VGP from pure logistics real estate competitors.

How will automation and AI change logistics requirements? Highly automated warehouses require different building specifications—higher power capacity, different floor loads, specialized equipment. VGP's ability to adapt building designs to evolving tenant requirements will determine whether it maintains its premium positioning.

Can the joint venture model scale further? With Allianz, Deka, and AREIM as partners, VGP has demonstrated the model works. Expanding the partner base or extending existing relationships would validate the platform's ongoing attractiveness to institutional capital.

Jan Van Geet's journey from a 22-year-old factory manager in post-communist Czechoslovakia to the founder of a pan-European logistics empire represents one of the remarkable entrepreneurial stories in European real estate. He saw opportunity in chaos, built relationships that compounded over decades, and engineered a business model that creates value at every stage. The warehouses themselves may be prosaic—concrete boxes near highways—but the machine for producing them is anything but.

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XV. Recommended Further Reading

1. VGP Annual Reports (2019-2024) – Available at vgpparks.eu/investors/publications. These provide detailed operational and financial data, including granular breakdowns of geographic and tenant exposure.

2. "The Box" by Marc Levinson – The definitive history of containerization and its impact on global trade. Understanding how logistics infrastructure shapes commerce provides context for VGP's role.

3. Prologis Annual Reports – The world's largest logistics real estate company provides benchmarking data and market commentary. Comparing VGP's metrics to Prologis reveals relative positioning.

4. CBRE European Logistics Reports – Quarterly and annual reports on European industrial real estate markets provide demand and supply context.

5. European Public Real Estate Association (EPRA) Research – Industry-level data and analysis on European listed real estate companies.