Grand City Properties S.A. announced in August 2021 its results for the first half of 2021 with net rental income amounting to EUR183 million. This positive result was due to the impacts of accretive acquisitions, a robust and efficient business platform, along with a stable level of like-for-like rental growth. In addition, a continued optimization of the capital structure was instrumental in offsetting the decrease in net rental income.
In more details, during the first half of 2021, Grand City Properties completed disposals above book value amounting to over EUR300 million, reaching a profit margin of 29%, including capex. The disposals comprised mostly of non-core assets, located across Germany particularly in eastern German states such as Saxony-Anhalt, Thuringia, Saxony, and Brandenburg. The disposals above book values have freed up funds utilized for quality acquisitions in London, Berlin and Dresden. Finally, in early 2021, a EUR270 million share buyback program was launched, and is expected to run until the end of 2021.
Moreover, Grand City Properties has also worked towards further optimizing its debt profile and has taken several measures in this regard. During the first half of 2021, the company issued its largest bond-to-date of EUR1 billion at a very low coupon of 0.125%. Furthermore, the Company repaid outstanding straight bonds and higher interest-bearing bank financing, amounting close to EUR1 billion. These measures have decreased the average cost of debt to 1% from 1.3% as of year-end 2020, while the Grand City Properties has maintained a long average debt maturity period of 6.7 years. The company solid profitability has also ensured that it continues to maintain a strong interest coverage ratio of 6.5x.
Grand City Properties S.A. is a residential real estate company, headquartered in Luxembourg. It invests in value-add residential opportunities in the largest cities and metropolitan areas of Germany and London, being one of the largest real estate companies in Europe. In more details, the company’s portfolio is focused on properties in the metropolitan areas in the state of North Rhine-Westphalia and the cities of Berlin, Dresden, Leipzig, Hamburg and London.
The largest single shareholder with 40% is Aroundtown SA. The company was founded in 2004, scaled by investor and entrepreneur Yakir Gabay (יקיר גבאי) and it has since become the largest commercial real estate group in Germany and 4th largest in Europe. Aroundtown invests in quality income-producing properties that have potential to add value to central locations in the European continent. Avisco (controlled by Yakir Gabay יקיר גבאי) controls over 10% of Aroundtown followed by Blackrock at 5%.