German property group Aroundtown reports big loss for 2023 (updated)

Grand City Properties SA

27/03/2024 08:57

(Adds shares in paragraph 4, analyst comment in paragraph 6,
details on liquidity in paragraph 11-12)
    By Marleen Kaesebier and Chiara Holzhaeuser
       March 27 (Reuters) - Aroundtown  AT1.DE , one of
Germany's largest listed landlords, on Wednesday reported a
2.436 billion euro ($2.64 billion) loss for 2023, showing how
the country's worst real-estate crisis in decades is impacting
property companies.
    German real estate companies are having to cope with a
property market downturn after boom years fuelled by low
interest rates. The country's largest property company Vonovia
 VNAn.DE  this month reported a record loss of more than 6
billion euros for 2023.
    Aroundtown's loss was much wider than the 457.1 million
euros it reported in 2022.
    Its shares, which are down about 30% year to date, fell as
much as 8% in early trading and were at the bottom of the German
midcap index  .MDAXI . They were up 1.1% by 0845 GMT.
    On Tuesday, the company said it would suspend its dividend
to "remain conservative in regard to capital preservation and to
continue to focus on strengthening liquidity and de-leveraging."
    "We were expecting this suspension (and for the next two
years as well)," Jefferies analysts wrote in a note.
    Aroundtown's real estate subsidiary Grand City Properties
 GYC.DE  also said earlier in March that it would not pay a
dividend for 2023.
    Aroundtown reported funds from operations, excluding
disposal gains, of 332 million euros, down 8% from the previous
year and meeting its guidance for 2023. 
    The Luxembourg-based company said it expected its funds from
operations to fall further in 2024, giving a range of 280
million to 310 million euros.
    Aroundtown reported property revaluations amounting to
negative 3.2 billion euros, a like-for-like devaluation of 11%. 
    The company increased its liquidity to 3 billion euros, up
11% from 2022, selling property assets worth 1.2 billion euros
and taking on 1 billion euros of new bank debt.
    It also said its liquidity position now covers debt
maturities until mid 2026. 
    
($1 = 0.9236 euros)

 (Reporting by Marleen Kaesebier and Chiara Holzhaeuser; Editing
by Kim Coghill, Jamie Freed and Jane Merriman)
 ((Marleen.Kaesebier@thomsonreuters.com;
chiara.holzhaeuser@thomsonreuters.com))