LUXEMBOURG (dpa-AFX) - Aroundtown subsidiary Grand City Properties (GCP) has returned to profit in the first quarter. The bottom line was a profit of 43.7 million euros, as the group announced in Luxembourg on Thursday. A year earlier, the devaluation of the portfolio had resulted in a loss of just under 12 million euros. In 2023 as a whole, the company had slipped even further into the red due to a lower valuation of the properties.

The news was received positively on the stock market: Grand City shares rose by around one percent in the morning, making them one of the stronger stocks in the small-cap index SDax.

In day-to-day business, however, demand for residential space has recently dominated the picture. In the three months to the end of March, net rental income climbed by four percent to a good 105 million euros. On a comparable basis, rents rose by 3.4%, which is more than expected for the year as a whole. Net rents are expected to increase by three percent on a comparable basis in 2024.

However, higher costs, such as for financing, weighed on the operating profit (FFO1) in the reporting period. This fell by four percent year-on-year to just over EUR 45 million. For the current year, the management is still aiming for an operating profit of 175 to 185 million euros. This means that both a decline and a slight increase are possible.

Like other companies in the sector, the Group is focusing primarily on its debt and is therefore selling off properties. In the first quarter, Grand City Properties reported that it sold apartments worth 30 million euros slightly above book value. The company has also signed contracts for the sale of apartments worth 23 million euros since the beginning of the year. In addition, the Group intends to dispose of further properties worth 170 million euros.

The Group's total debt nevertheless rose slightly to almost EUR 5.8 billion by the end of March compared to the end of 2023. However, the cost of debt remained low for the company at 1.9% as of March 2024 with an average term of 5.1 years. According to the Group, it has cash and cash equivalents that cover debt maturities until the end of 2026.

With around 63,200 apartments, Grand City Properties is primarily active in densely populated areas of Germany, such as Berlin, North Rhine-Westphalia, the Halle-Leipzig-Dresden region and the Rhine-Main area. The real estate group is also represented in major cities such as London and Munich. Its largest shareholder is the commercial real estate group Aroundtown, which holds a good 60 percent of the company./mne/stw/stk