REG-Grand City Properties S.A. GCP S.A. announces H1 2023 results

Grand City Properties SAAnnouncement

16/08/2023 06:00

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Grand City Properties S.A. (IRSH)
GCP S.A. announces H1 2023 results

16-Aug-2023 / 06:50 CET/CEST
The issuer is solely responsible for the content of this announcement.

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 THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
   STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
                                   VIOLATION OF APPLICABLE LAWS OR REGULATIONS

    GRAND CITY PROPERTIES S.A. ANNOUNCES RESULTS FOR H1 2023 WITH SOLID OPERATION RESULTS AND STABLE LEVERAGE

  • Net rental income for H1 2023 of €204 million, higher by 5% as compared to €195 million in H1 2022.
  • Adjusted EBITDA of €160 million in H1 2023, increasing by 5% as compared to €152 million in H1 2022.
  • FFO I of €94  million in the first  six months of 2023,  lower as compared to  €97 million in the  comparable
    period of 2022 due to higher financing costs.
  • FFO I per share of €0.54 per share in H1 2023 as compared to €0.59 per share in H1 2022.
  • Following full external  valuation of the  portfolio in H1  2023, the like-for-like  value declined by  5.4%.
    Portfolio value per sqm of €2,183 per sqm as of June 2023.
  • Net loss of €402  million in H1  2023 mostly due to  the negative property  revaluations, offset by  positive
    operational profits.
  • Cash and liquid  assets of  €714 million at  the end  of June  2023, reflecting 18%  of debt  and cover  debt
    maturities until Q2 2026.
  • Average cost of debt of 1.6% with an average debt maturity of 5.7 years.
  • Conservative financial profile with a low  LTV of 36% as of June  2023, stable compared to December 2022  and
    ICR of 5.8x in H1 2023. Unencumbered assets amounting to €7.7 billion and representing 83% of total portfolio
    value providing additional financing flexibility.
  • EPRA NTA of €4.3 billion  or €24.7 per share  as of the end  of June 2023, down  8% and 9% respectively  from
    December 2022.
  • Solid equity base with an equity ratio of 51% as of the end of June 2023.
  • FY 2023 guidance slightly updated as a result of the solid operational result.

Luxembourg, August 16, 2023 – Grand City Properties S.A. (“GCP” or the “Company”) announces results for the first
six months of 2023 with net rental income of €204 million,  higher by 5% as compared to €195 million in H1  2022.
The increase was the combined result of the like-for-like rental growth of 2.7%, of which 2.4% came from in-place
rent growth and  0.3% from occupancy  increase, and  the impact from  acquisitions in 2022,  partially offset  by
disposals. Adjusted EBITDA totaled €160 million in H1 2023,  also up by 5% year-over-year. FFO I amounted to  €94
million in the first six months of 2023, lower as  compared to €97 million in the comparable period in 2022  with
higher finance expenses and perpetual  notes attribution offsetting the operational  growth. FFO I per share  was
€0.54 per share in H1 2023, as compared to €0.59 per  share in H1 2022. The portfolio vacancy rate reduced to  an
all-time low of 3.9% as of June 2023 from 4.2% in December 2022. Due to the good operational progress and on  the
back of higher like-for-like rental growth, the FFO I guidance was slightly updated to the range of €175  million
to €185 million, from €170 million to €180 million.   

In the first six months of  2023, GCP externally revalued the full  portfolio and recorded a like-for-like  value
decline of 5.4% excluding the  contribution from capex (4.8% including  capex). Property revaluation and  capital
gains totaled negative  €539 million, with  negative revaluation across  the entire portfolio,  driven by  higher
discount and cap rates  as a result of  higher interest rates.  The yield expansion was  partially offset by  the
operational growth driven by higher in-place rent and lower vacancy. Portfolio valuations remain materially below
replacements costs and benefit from the systemic supply/demand imbalance.

In H1 2023 GCP  signed disposals in the  amount of €130  million, which validates the  Company’s ability to  sell
properties also in a challenging market. Furthermore, GCP  signed approximately €210 million in new bank debt  in
H1 2023 and  signed an additional  bank debt  of €230 million  in Q3  2023. The Company  leveraged its  liquidity
position to repay €89 million  in nominal value near term  bonds at an average discount  of 8%. As of June  2023,
cash and liquid assets cover debt maturities  for the next 3 years until  Q2 2026. The Company’s average cost  of
debt was 1.6% with an average debt maturity of  5.7 years. The disposals, supported by the operational  cashflow,
the suspension of the 2022 dividend and debt repayment at discount, allowed GCP to maintain a stable LTV compared
to year-end 2022 of 36%, despite the negative portfolio revaluation.

Refael Zamir,  CEO  of Grand  City  Properties: "The  first  half  of 2023  was  marked by  a  solid  operational
performance. Despite the valuation headwinds, our efforts to  de-lever were successful in the period and  allowed
us to offset the negative revaluation and keep leverage stable.  I want to thank all team members for their  hard
work and dedication during this period.”

Financial     statements     for     H1     2023     are     available     on     the     Company's      website:
 1 https://www.grandcityproperties.com/investor-relations/publications/financial-reports/

For definitions of the alternative performance measures please see  the relevant section in the pages 30 - 34  of
the financial statements for H1 2023, which you can find on the website under investor relations > publications >
financial reports or follow this link:

 2 https://www.grandcityproperties.com/fileadmin/user_upload/03_investor_relations/Downloads/2023/GCP_Q2_2023.pdf

About the Company

The Company  is a  specialist in  residential real  estate, value-add  opportunities in  densely populated  areas
primarily in  Germany and  London. The  Company’s strategy  is to  improve its  properties by  repositioning  and
intensive tenant management, and then create value  by subsequently raising occupancy and rental levels.  Further
information: www.grandcityproperties.com

Grand City  Properties  S.A.  (ISIN: LU0775917882)  is  a  public limited  liability  company  (société  anonyme)
incorporated under the  laws of the  Grand Duchy  of Luxembourg, having  its registered office  at 37,  Boulevard
Joseph II, L-1840  Luxembourg, Grand  Duchy of  Luxembourg and  being registered  with the  Luxembourg trade  and
companies register (Registre de Commerce et  des Sociétés Luxembourg) under number B  165 560. The shares of  the
Company are listed on the Prime Standard segment of Frankfurt Stock Exchange.

Contact:

Grand City Properties S.A.
37, Boulevard Joseph II,
L-1840 Luxembourg
T: +352 28 77 87 86
E: info@grandcity.lu
www.grandcityproperties.com

 

Investor Relations Team:
Grand City Properties S.A.
E:  3 gcp-ir@grandcity.lu

 

DISCLAIMER:

 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED  STATES
SECURITIES ACT OF 1933,  AS AMENDED (THE SECURITIES  ACT), AND MAY NOT  BE OFFERED OR SOLD  IN THE UNITED  STATES
ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC  OFFERING
OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED  AT AND IS ONLY  BEING DISTRIBUTED IN  THE UNITED KINGDOM TO  (I) PERSONS WHO  HAVE
PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES
AND MARKETS ACT  2000 (FINANCIAL  PROMOTION) ORDER  2005 (THE ORDER),  (II) HIGH  NET WORTH  ENTITIES, AND  OTHER
PERSONS TO WHOM  IT MAY OTHERWISE  LAWFULLY BE COMMUNICATED  FALLING WITHIN ARTICLE  49 OF THE  ORDER, AND  (III)
PERSONS TO  WHOM IT  MAY OTHERWISE  LAWFULLY BE  COMMUNICATED (ALL  SUCH PERSONS  TOGETHER BEING  REFERRED TO  AS
RELEVANT PERSONS). THIS COMMUNICATION MUST  NOT BE READ, ACTED  ON OR RELIED ON BY  PERSONS WHO ARE NOT  RELEVANT
PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH  THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO  RELEVANT
PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE  EUROPEAN ECONOMIC AREA (EEA),  THIS ANNOUNCEMENT AND ANY  OFFER IF MADE SUBSEQUENTLY  IS
DIRECTED ONLY  AT PERSONS  WHO ARE  “QUALIFIED INVESTORS”  WITHIN THE  MEANING OF  ARTICLE 2(1)(E)  OF  DIRECTIVE
2003/71/EC, AS AMENDED (THE PROSPECTUS DIRECTIVE) (QUALIFIED INVESTORS).  ANY PERSON IN THE EEA WHO ACQUIRES  THE
SECURITIES IN ANY OFFER  (AN INVESTOR) OR  TO WHOM ANY  OFFER OF THE SECURITIES  IS MADE WILL  BE DEEMED TO  HAVE
REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED  AND
AGREED THAT ANY SECURITIES ACQUIRED  BY IT IN THE OFFER  HAVE NOT BEEN ACQUIRED ON  BEHALF OF PERSONS IN THE  EEA
OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE
EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS  OF
A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS  OR ESTIMATES RELATING TO PLANS  AND OBJECTIVES RELATING TO OUR  FUTURE
OPERATIONS, PRODUCTS, OR SERVICES, FUTURE  FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING  OR RELATING TO ANY  SUCH
STATEMENTS, EACH OF WHICH  CONSTITUTES A FORWARD-LOOKING  STATEMENT SUBJECT TO RISKS  AND UNCERTAINTIES, MANY  OF
WHICH ARE BEYOND THE CONTROL  OF THE COMPANY. ACTUAL  RESULTS COULD DIFFER MATERIALLY,  DEPENDING ON A NUMBER  OF
FACTORS.

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Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.

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   ISIN:           LU0775917882, LU0775917882 , XS1491364953, XS1811181566,
                   XS2271225281, XS1220083551, XS1654229373, XS1706939904,
                   XS1706939904, XS1763144604, XS1781401085, CH0401956872,
                   XS1827041564, XS1851265527, XS1953786222, XS1964638446,
                   CH0482172415, XS2016885159, XS2033380820, XS2035328223,
                   XS2154325562, XS2282101539,
   Category Code:  IR
   TIDM:           IRSH
   LEI Code:       5299002QLUYKK2WBMB18
   OAM Categories: 1.2. Half yearly financial reports and audit
                   reports/limited reviews
   Sequence No.:   264803
   EQS News ID:    1704297


    
   End of Announcement EQS News Service

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References

   Visible links
   1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=572a7a11a9f4d65d9beb026beb0b36bd&application_id=1704297&site_id=refinitiv&application_name=news
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   3. mailto:gcp-ir@grandcity.lu


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