Grand City Properties (GYC) Q2 2024 earnings summary

Executive summary

• Net rental income rose 3% year-over-year to €212m in H1 2024, driven by 3.4% like-for-like rental growth and higher in-place rents, despite disposals and a 4% decline in total revenue.

• Adjusted EBITDA increased 4% to €166m, while FFO I remained stable at €94m, as higher perpetual note costs offset operational gains.

• Net loss for the period narrowed to €74m from €402m in H1 2023, mainly due to lower negative property revaluations.

• Portfolio value declined 2% to €8.4bn, reflecting a -2% like-for-like revaluation, but operational growth offset much of the yield expansion.

• Board expanded to five members, now 80% independent, enhancing governance.

Financial highlights

• Revenue decreased to €298m from €309m year-over-year, mainly due to lower recoverable utility costs.

• Adjusted EBITDA increased 4% to €166m, while net loss for the period narrowed to €74m from €402m in H1 2023.

• EPRA NTA per share fell 2% to €22.8, mainly due to negative revaluations.

• Cash and liquid assets stood at €1.1bn, covering debt maturities into 2027.

• Cost of debt remained low at 1.9%, with average debt maturity extended to 5.3 years post-July 2024 transactions.

Outlook and guidance

• FY 2024 FFO I guidance raised to €180–190m, FFO I per share €1.04–1.10, and dividend per share €0.78–0.83, with LTV expected below 45%.

• Guidance increase driven by stronger operational results and softer-than-expected negative impact from perpetual notes and finance expenses.

• Like-for-like net rent growth expected to exceed 3% for FY 2024.

• Management expects continued stable operational performance, supported by strong rental growth and robust portfolio fundamentals.

• Ongoing disposals and proactive liability management are expected to further support deleveraging and financial flexibility.