Grand City Properties (GYC) Q3 2024 earnings summary

Executive summary

• Achieved 3.5% like-for-like rental growth YoY, with in-place rent at €9.0/sqm (Sep 2024) and low vacancy of 3.9%.

• Net rental income rose 3% YoY to €317m, driven by strong performance in German and London markets.

• Adjusted EBITDA increased 5% to €250m, reflecting operational efficiency and higher rents.

• Net loss narrowed to €17m from €398m in 2023, mainly due to lower negative property revaluations.

• Portfolio: 62,014 units, €8.5bn value, with 23% in Berlin, 21% in NRW, 19% in London, and 13% in Dresden/Leipzig/Halle.

Financial highlights

• Net rental income: €317m (+3% YoY); Adjusted EBITDA: €250m (+5% YoY); FFO I: €141m (flat YoY); FFO I/share: €0.82.

• Property revaluations and capital losses: -€197m (down from -€569m in 2023); net loss: €17m.

• EPRA NTA per share: €23.1 (-1% from Dec 2023); EPRA LTV stable at 48%.

• Cash and liquid assets: €1.5bn, up 18%, covering maturities until end of 2027.

• LTV: 36% (down from 37% Dec 2023); unencumbered assets: 72% of total.

Outlook and guidance

• FY 2024 guidance confirmed: FFO I €180m–€190m, FFO I/share €1.04–€1.10, dividend/share €0.78–€0.83, like-for-like net rent growth >3%, LTV <45%.

• Management expects stabilization in property valuations and continued strong rental growth, supported by supply-demand imbalances.

• Ongoing deleveraging through disposals and vendor loan collections to strengthen the balance sheet.

• Full-year impact from higher perpetual notes coupon payments and higher financing costs to offset adjusted EBITDA increase.