Grand City Properties S.A. announces H1 2024 results with increased guidance

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS OR REGULATIONS 

GRAND CITY PROPERTIES S.A. ANNOUNCES H1 2024 RESULTS WITH INCREASED GUIDANCE

• Net rental income of €212 million in H1 2024, higher by 3% as compared to €204 million in H1 2023.
• Solid like-for-like rental growth of 3.4%, driven by in-place rent growth.
• Adjusted EBITDA of €166 million in H1 2024, higher by 4% as compared to €160 million in H1 2023.
• FFO I of €94 million and €0.54 per share in H1 2024, stable as compared to H1 2023, as higher perpetual notes attribution is offset by operational growth and finance expenses are kept stable.
• Valuation of the full portfolio conducted in H1 2024, with a like-for-like value decline of 2%, resulting in a portfolio net rental yield of 5.0% as of June 2024.
• Net loss of €74 million and basic loss per share of €0.38, driven mainly by negative property revaluations recognized in the period, partially offset by strong operational results.
• EPRA NTA amounted to €3.9 billion or €22.8 per share as of June 2024.
• Strong liquidity position with €1.1 billion of cash and liquid assets as of June 2024, reflecting 26% of total debt.
• Conservative financial position maintained with an LTV of 37% as of June 2024, ICR ratio of 6.0x in H1 2024 and €6.1 billion of unencumbered assets (72% of total portfolio value).
• Successful capital markets transactions executed in Q2 and Q3 of 2024.
• FY 2024 guidance increased.

Luxembourg, August 14, 2024 – Grand City Properties S.A. (“GCP” or the “Company”) announces financial results for the first half of 2024 with net rental income amounting to €212 million, higher by 3% as compared to the €204 million recorded in the comparable period of 2023. This is primarily the result of like-for-like growth of 3.4% as of June 2024, driven by in-place rent growth. Supported by a higher operational efficiency, Adjusted EBITDA is up 4% year-over-year at the €166 million. FFO I is stable at €94 million as well as on a per share basis of €0.54 compared to H1 2023 as the negative impact of the higher perpetual notes attribution was offset by strong operational growth while finance expenses remained stable. Based on the strong results and improved outlook GCP increased its FFO I guidance from €175-€185 million to €180-€190 million.

The Company conducted a full revaluation of the portfolio in the first six months of 2024, resulting in a like-for-like value decline of 2%. GCP recorded property revaluation and capital losses in the amount of €198 million in H1 2024. This is primarily explained by slight yield expansion, partially offset by operational growth. The negative revaluation recorded in the period was a third as compared to H1 2023, indicating a significantly softer devaluation momentum as a result of improved market dynamics and signalling a potential stabilisation in valuations.

In the first half of 2024, the Company signed disposals totalling ca. €220 million of which ca €100 million were not closed in H1 2024. In this period, €160 million of disposals were completed, including properties signed in 2023. The closed disposals were primarily located in London, as well as NRW, Berlin and Hessen, and were closed at a slight discount to book value. The Company raised €100 million of new bank debt and redeemed bonds amounting to ca. €270 million in this period. As of June 2024, GCP’s average cost of debt was 1.9% with an average maturity of 5.1 years. In April 2024 the Company executed its perpetual exchange, which was highly successful with an acceptance rate of over 80%, resulting in €2 million in annualised coupon reduction and recovery of equity content for exchanged notes under S&P methodology. After the reporting period, GCP continued the pro-active management of its debt maturities and issued a new unsecured bond of €500 million, which was more than 7x oversubscribed, channelling the proceeds into a bond tender through which ca. €240 million nominal outstanding amount of bonds were bought back. As a result of these activities, and including expected proceeds of signed disposals, the Company now covers all its debt maturities until the end of 2027. The conservative financial profile of the Company is further shown by its low LTV ratio of 37%, stable compared to year-end 2023 despite devaluations.

Refael Zamir, CEO of Grand City Properties: "We are happy to report our results for the first half of 2024. Positive market momentum allows us to continue to drive strong operational growth. At the same time, we have been able to mitigate the negative impacts from the higher interest rate environment through pro-active management of our balance sheet and interest exposure, supporting our increased guidance and positioning GCP well for future growth.”

Financial statements for H1 2024 are available on the Company's website:
ttps://www.grandcityproperties.com/investor-relations/publications/financial-reports/

For definitions of the alternative performance measures please see the relevant section in the pages 32-36 of the financial statements for H1 2024, which you can find on the website under investor relations > publications > financial reports or follow this link:
https://www.grandcityproperties.com/grandcityproperties.com/Data%20Objects/Downloads/Financial%20Reports/H1%202024%20Financials/GCP_Q2_2024.pdf

About the Company

The Company is a specialist in residential real estate, value-add opportunities in densely populated areas primarily in Germany and London. The Company’s strategy is to improve its properties by repositioning and intensive tenant management, and then create value by subsequently raising occupancy and rental levels. Further information: www.grandcityproperties.com

Grand City Properties S.A. (ISIN: LU0775917882) is a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 37, Boulevard Joseph II, L-1840 Luxembourg, Grand Duchy of Luxembourg and being registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés Luxembourg) under number B 165 560. The shares of the Company are listed on the Prime Standard segment of Frankfurt Stock Exchange. 

Contact:

Grand City Properties S.A.
37, Boulevard Joseph II,
L-1840 Luxembourg
T: +352 28 77 87 86
E: info@grandcity.lu
www.grandcityproperties.com 

Investor Relations Team:
Grand City Properties S.A.
E: gcp-ir@grandcity.lu

DISCLAIMER:

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (EEA), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED (THE PROSPECTUS DIRECTIVE) (QUALIFIED INVESTORS). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN INVESTOR) OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH STATEMENTS, EACH OF WHICH CONSTITUTES A FORWARD-LOOKING STATEMENT SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ACTUAL RESULTS COULD DIFFER MATERIALLY, DEPENDING ON A NUMBER OF FACTORS.