Aroundtown posts first annual profit in two years (updated)

Aroundtown SA

26/03/2025 06:09

Adds quotes from board member in paragraphs 4, 10-12

By Marleen Kaesebier

March 26 (Reuters) - Aroundtown AT1.DE, one of Germany's largest listed landlords, posted a profit of 309.3 million euros ($333.6 million) for 2024 on Wednesday, in a sign of improvement at a time when Berlin's borrow-to-spend splurge threatens to drive up borrowing costs.

The profit follows two consecutive years of losses, including that of 2.43 billion euros in 2023, amid Germany's worst real estate crisis in decades.

The company said the return to profit was driven by a strong operational performance and stabilized property values. It also continued to strengthen its balance sheet by closing 740 million euros worth of property disposals and repaying 1.3 billion euros of debt.

"We have done a lot of liability management," said Frank Roseen, a member of Aroundtown's board of directors, adding that since the beginning of the COVID-19 pandemic, the company had sold almost 10 billion euros worth of assets.

The Luxembourg-based company reported funds from operations (FFO I), a key metric for real estate firms, of 315.5 million euros for the year, in line with its annual guidance.

It expects the metric to fall to between 280 million to 310 million euros in 2025.

Aroundtown, which owns properties mainly in Germany, the Netherlands and London, also took 360 million euros worth of new bank debt last year.

Shares of real estate firms exposed to the German market were hit earlier in March by the announcement of a debt-driven 500 billion euro infrastructure spending plan.

However, Jefferies analysts have said that rising borrowing costs should not impact real estate companies in the short term, as their average debt duration is five years.

"We have already fixed the costs for the next 3.8 years. So immediately we don't see any impact," Roseen told Reuters.

"Overall, I think (the debt plan) is positive for the commercial real estate," he added, noting 35% of Aroundtown's portfolio is governmental tenants that could be looking to hire more people to manage the change.

"Hopefully there will be more interest for our properties because we are not the most expensive guys on the block," he said.

($1 = 0.9272 euros)

 (Reporting by Marleen Kaesebier in Gdansk, editing by Milla Nissi)

 ((Marleen.Kaesebier@thomsonreuters.com))