Aroundtown raises FFO I target despite German property crisis (updated)

Grand City Properties SA

28/08/2024 06:48

(Adds shares in paragraph 7, details and context throughout)
       Aug 28 (Reuters) - Aroundtown  AT1.DE  on Wednesday
raised its full-year guidance for FFO I, a key profitability
measure for real estate firms, even as the German property
market continues to struggle with its worst crisis in decades.
    After a boom driven by low interest rates, the German real
estate sector has been hit hard by soaring inflation and higher
borrowing costs in the past year. 
    Aroundtown, one of Germany's largest listed landlords,
expects FFO I - its main metric measuring funds from operations
- to come between 290 million and 320 million euros ($323.5
million and $357.0 million) this year, compared to the previous
forecast of 280-310 million euros. The range is still below the
332 million euros reported last year.
    The outlook hike follows a similar move by its 62% owned
subsidiary Grand City Properties  GYC.DE  earlier this month.
    Aroundtown, which has been struggling with liquidity during
the market slowdown, posted a narrowed loss of 432 million euros
for the second quarter, versus 1.27 billion in the same period
last year. 
    That led to a loss of 330 million in the first half of the
year, even after it returned to a profit in the first quarter.
    Aroundtown's shares were indicated up 4.6% in Lang % Schwarz
premarket trade.
($1 = 0.8964 euros)

 (Reporting by Marleen Kaesebier in Gdansk; editing by Milla
Nissi)
 ((Marleen.Kaesebier@thomsonreuters.com;
chiara.holzhaeuser@thomsonreuters.com))