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 GOOD START IN Q1 2024 DRIVEN BY STRONG OPERATIONS
- Net rental income of €105 million in Q1 2024, higher by 4% as compared to €101 million in Q1 2023.
- Solid like-for-like rental growth of 3.4%, driven mainly by in-place rent growth.
- Adjusted EBITDA of €82 million in Q1 2024, higher by 3% as compared to €80 million in Q1 2023.
- FFO I of €45 million and €0.26 per share in Q1 2024, lower by 4% as compared to €47 million and €0.27 in Q1 2023, as higher perpetual notes attribution offset the operational growth.
- Successful perpetual notes exchange in April 2024 with high acceptance ratio of 82%, re-establishing GCP in the capital markets and supporting the FFO and credit metrics by S&P.
- Net profit of €44 million and basic earnings per share of €0.17.
- Strong liquidity position with €1.3 billion of cash and liquid assets as of March 2024, reflecting 29% of total debt and covering debt maturities until the end of 2026.
- Conservative financial position maintained with an LTV of 36% as of March 2024, ICR ratio of 5.8x in Q1 2024 and €6.6 billion of unencumbered assets (75% of total portfolio value). EPRA LTV (considering perpetual notes as debt) as of March 2024 is 48%.
- EPRA NTA amounted to €4.1 billion or €23.5 per share as of March 2024.
- FY 2024 guidance confirmed.
Luxembourg, May 16, 2024 – Grand City Properties S.A. (“GCP” or the “Company”) announces results for the three-month period ending March 2024 with strong operational performance, higher liquidity position and conservative financial leverage. Net rental income increased by 4% to €105 million, mainly driven by the solid like-for-like rental growth of 3.4%. The growth is the result of in-place rent growth of 3.3%, while the occupancy was relatively stable with a like-for-like increase of 0.1%, reflecting strong positive operational dynamics. GCP continues to record low vacancy rate of 3.9% as of March 2024. Adjusted EBITDA increased to €82, higher by 3% as compared to €80 million in Q1 2023. The increase in the adjusted EBITDA is the result of the strong operational performance of the Company, driven by the solid like-for-like increase, partially offset by net disposals. FFO I decreased by 4% to €45 million in Q1 2024, mainly due to the higher perpetual notes attribution, as the financing costs remained relatively stable. FFO I per share amounted to €0.26 per share in Q1 2024, as compared to €0.27 per share in the comparable period. FY 2024 FFO I guidance is confirmed.
GCP continues with its proactive approach of maintaining a conservative financial profile with a strong financial position, by reducing leverage, strengthening liquidity, and therefore reducing refinancing needs, highlighted by a stable LTV of 36% as of March 2024. GCP did not valuate its portfolio in the first quarter of 2024 and will carry a portfolio valuation as part of the H1 2024 report. In Q1 2024, GCP successfully disposed assets of €30 million, at a 2% premium to book value, and signed additional disposals amounting to over €20 million which are expected to close in the coming periods. Combined with the strong operational result this allowed the Company to further strengthen its liquidity position, which amounted to €1.3 billion as of March 2023, thereby covering debt maturities until the end of 2026. As of March 2024, the Company’s average cost of debt remained stable at 1.9% as compared to year-end 2023 and the average debt maturity was 5.1 years, as of March 2024.
In April 2024, GCP launched an exchange offer with a tender option to the holders of the two perpetual notes which have passed their first call date. The exchange was successful with a high acceptance rate of 82%. The holders had the opportunity to exchange the current notes into new perpetual notes and a tender option for 15% of their exchanged notes. The transaction supports credit metrics as S&P equity content was regained, with only little cash usage. The transaction is also FFO accretive as it saves €2 million of coupon per annum, due to the reduction of the balance of perpetual notes, primarily driven by buybacks of €34 million at a discount.
Refael Zamir, CEO of Grand City Properties: "We entered 2024 with strong operational results supported by solid like-for-like rental growth, capitalizing on the positive market momentum. Our continued proactive measures to strengthen our balance sheet including the recent successful perpetual exchange, along with our strong operational platform, have positioned the Company well to continue to navigate the current environment.”
Financial statements for Q1 2024 are available on the Company's website: https://www.grandcityproperties.com/investor-relations/publications/financial-reports/
For definitions of the alternative performance measures please see the relevant section in the pages 32-36 of the financial statements for Q1 2024, which you can find on the website under investor relations > publications > financial reports or follow this link:
https://www.grandcityproperties.com/grandcityproperties.com/Data%20Objects/Downloads/Financial%20Reports/Q1%202024%20Financials/GCP%20Q1%202024.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: gcp-ir@grandcity.lu
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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.
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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.
