Continuous rental growth and a record low vacancy rate have meant that Grand City Properties amassed a net rental income of €295 million for 9M in 2022. This is a 7% increase over the 9M 2021 results, which were closer to €276 million. The strong operational growth of the portfolio is best highlighted in like-for-like rental increases of 3.1%, with 2.3% composed of in-place rent and 0.8% from occupancy vacancies.
Success Across the Board
Grand City Properties (GCP) have also seen a 3% increase in FFO I, equating to €145 million, which includes the general increase in expenses from both a larger portfolio and increased cost inflation.
The FFO I per share saw an increase of 4%, rising from €0.84 to €0.87. This is thought to be due to the accretive share buyback from 2022.
GCP has continued to make moves that will optimize its financial platform since the beginning of 2022. Part of these measures includes repaying more than €615 million in debt. This was accomplished by redeeming €450 million worth of a series of convertible bonds and prepaying more than €165 million in shorter maturity secure financing.
These measures have paid off, as the cost of debt for the company remains at 1.2% as of September 2022. With an average debt maturity of 6.2 years, GCP remains in a good position to have no upcoming maturity until 2024. Furthermore, GCP has liquid and cash assets that are projected to be approximately €390 million as of September 2022, which protects them from debt maturities until 2025.
A Prosperous Organization
Speaking of the recent success of the company is Mr. Refael Zamir, the CEO of Grand City Properties:
“Despite market volatility, GCP remains well positioned. Rental growth and letting momentum continued in the first nine months of 2022, resulting in a solid operational result and portfolio vacancy declining to a historic low of 4.4%.
Our proactive approach to debt management in previous periods means we retain a conservative financial platform with no near-term maturities providing the Company with a lot of flexibility to navigate the current environment and to achieve our 2022 targets.”
The company keeps presenting strong financial profile with low leverage (loan-to-value) of 35% and BBB+ stable credit rating by S&P.
Grand City Properties is a specialist dealing primarily in residential real estate. Their primary market is value-led opportunities in densely populated urban areas across London and Germany. The primary strategy of the business is improving properties by both repositioning methods and intensive tenant management solutions. By subsequently raising both rental and occupancy levels, the company creates value in these areas.
Grand City Properties is proud of its current portfolio diversification with high growth potential. The portfolio is spread over UK, mainly high quality assets in London and in Germany with focus on central locations in best in class Berlin portfolio and well distributed NRW portfolio.
The company has reaffirmed its recognition for ESG & sustainability measures, company’s hq headquarters equipped with photovoltaic (PV) systems along with charging stations for electric vehicles.
Grand City Properties is majority owned by Aroundtown who’s major shareholder is Yakir Gabay, with 15%. Yakir Gabay serves as GCP chairman of the Advisory Board. The other key shareholders include MFS, Blackrock, Candriam, BNP Paribas, Norges, Vanguard, State-Street, DB and UBS.
Primary bond investors for GCP include Union Investment, CS, UBS, ECB, GIC, Credit Agricole, and a plethora of other major investment institutions from across the world.
