REG-Grand City Properties S.A. Grand City Properties S.A. announces FY 2023 results with robust operational growth and stable LTV

Grand City Properties SAAnnouncement

13/03/2024 06:00

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Grand City Properties S.A. (IRSH)
Grand City Properties S.A. announces FY 2023 results with robust operational growth and stable LTV

13-March-2024 / 06:46 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 FY 2023 RESULTS WITH ROBUST OPERATIONAL GROWTH AND STABLE LTV

  • Top range of FY 2023 guidance achieved.
  • Net rental income of €411 million, higher by 4% as compared to €396 million in FY 2022.
  • Solid like-for-like rental  growth of  3.3%, as  a result of  in-place rent  increase of  3.1% and  occupancy
    increase of 0.2%.
  • Historic low vacancy rate of 3.8% as of December  2023, following the strong declining trend from 4.2% as  of
    December 2022 and 5.1% as of December 2021.
  • Adjusted EBITDA of €320 million in FY 2023, higher by 4% as compared to €308 million in FY 2022.
  • Increased liquidity position by  €800 million to €1.2  billion as of December  2023, reflecting 28% of  total
    debt and covering next 3 years of debt maturities until the end of 2026.
  • Solid financial position maintained with an LTV ratio of 37% as of December 2023 remaining stable compared to
    36% in December 2022
  • EPRA LTV (considering perpetual notes as debt) as of December  2023 is 48%, up from 46% in December 2022  due
    to negative property revaluation.
  • ICR ratio of 5.6x and €6.6 billion of unencumbered assets (75% of total portfolio value).
  • FFO I of €184  million in 2023  (1.07 per share),  lower by 4% as  compared to €192  million in 2022,  mainly
    driven by the higher financing cost and perpetual notes attribution.
  • Full year negative property revaluation of -9% on a like-for-like basis, primarily driven by higher  discount
    and cap rates.
  • Loss of €638 million as a result of the negative property revaluation, offset by strong operational profits. 
  • EPRA NTA amounted to €4 billion or €23.2 per share as of December 2023.
  • Due to current macro-economic environment, the company will not pay dividend for 2023.

Luxembourg, March 13,  2024 –  Grand City  Properties S.A. (“GCP”  or the  “Company”) announces  results for  the
financial year 2023  with robust operational  performance, strong liquidity  position and conservative  financial
leverage maintained. Net rental  income increased by 4%  to €411 million, mainly  due to the solid  like-for-like
rental growth of  3.3%. The growth  is driven by  in-place rent growth  of 3.1% and  occupancy increase of  0.2%,
recording an historic low  vacancy rate of 3.8%.  The historic low  vacancy rate along with  the increase in  the
in-place rent underline the Company’s ability to extract rental growth potential and are reflective of the strong
positive momentum in the market. Adjusted EBITDA increased to €320, from €308 million in 2022, an increase of 4%.
FFO I decreased by 4% to  €184 million in 2023, as  compared to €192 million in  the in 2022. The higher  finance
expenses and  perpetual notes  attribution are  the  main drivers  of the  decrease  in FFO  I, while  the  solid
operational growth partially offset the decrease. FFO I per  share amounted to €1.07 per share 2023, as  compared
to €1.14 per share in 2022. FY 2023 FFO I guidance is therefore achieved at the top of the range.

As part of the full year  audited report GCP revalued its  full portfolio, recording a like-for-like  revaluation
loss of 9%.  Property revaluation  and capital  gains amounted  to a  negative balance  of €890  million, as  GCP
recorded negative revaluation across the entire portfolio. The portfolio has been revalued in full by independent
external valuers, bringing the portfolio value to the  most up-to-date status. The revaluation loss is 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 which is resulting in acceleration
of rental growth in GCP’s portfolio locations.

In 2023, GCP continued its proactive approach of strengthening liquidity, reducing refinance risk and maintaining
a conservative financial profile with  stable LTV ratio. Successful disposals  along with proactive repayment  of
bonds enhanced the liquidity position of the Company, while the strong operational performance and the suspension
of the 2022 dividend allowed GCP to  maintain an LTV of 37%, remaining broadly  stable compared to the 36% as  at
the end of  2022. During  the year,  GCP successfully  disposed assets  amounting to  €306 million,  at a  slight
discount to  book value  of 3%,  thereby generating  profit over  total cost  of €72  million and  affirming  the
company’s capacity to successfully dispose properties even in a challenging economic environment.

GCP raised over  €550 million  of new  bank financing in  2023, supporting  further its  liquidity position.  The
Company’s average cost of debt was 1.9% as at year-end 2023, as compared to 1.3% at year-end 2022. GCP decided to
raise secured debt, using its large pool of unencumbered assets, with relatively higher cost of debt compared  to
its existing  debt, and  significantly lower  compared to  the current  bond market,  in order  to  significantly
strengthening its liquidity position and extending the refinancing period further, thereby significantly reducing
the refinancing risk. As  of December 2023, GCP  had an average debt  maturity of 5.3 years  and cash and  liquid
assets of €1.2 billion,  which including signed  disposals cover its  debt maturities for  the next three  years,
until the end of 2026.

While the  market situation  has recently  shown  certain improvements,  macroeconomic uncertainty  remains,  and
transaction markets  have yet  to open  up sufficiently  and thus  uncertainty remains  as to  how the  Company’s
leverage will  develop. GCP’s  management believes  that in  the current  environment it  is more  prudent to  be
conservative when it comes  to capital and  liquidity and to  continue its focus  on deleveraging. Therefore  GCP
announced its decision not to pay the dividend for 2023.

Refael Zamir, CEO  of Grand City  Properties: "I  am proud of  our team  members from all  the departments  which
contributed to  achieve all  of our  main goals  of this  year. Despite  these challenging  market conditions  we
succeeded to  reach the  top  range of  our  guidance for  2023,  recording a  strong  operational growth  and  a
significant improvement of our solid liquidity position. Our financial profile remained stable, as our successful
proactive measures and  initiatives counterbalanced the  negative revaluation of  our portfolio, positioning  the
Company well to execute its internal growth strategy. I  wish to express my appreciation to all our team  members
for their hard work and dedication during this year.”

Financial statements for FY 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 128 - 130 of
the financial statements for FY 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_FY_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:  ACS
   TIDM:           IRSH
   LEI Code:       5299002QLUYKK2WBMB18
   OAM Categories: 1.1. Annual financial and audit reports
   Sequence No.:   309260
   EQS News ID:    1857289


    
   End of Announcement EQS News Service

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References

   Visible links
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   3. mailto:gcp-ir@grandcity.lu


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