Grand City Properties S.A.

H1 2026 net rental income was EUR 219 million, up 3% year over year, and adjusted EBITDA was EUR 174 million, also up 3%. FFO I came in at EUR 91 million versus EUR 95 million a year ago, or EUR 0.52 per share versus EUR 0.54. Basic EPS was EUR 0.49 versus EUR 0.92 in H1 2025, and profit was EUR 129 million versus EUR 210 million. The portfolio saw a 0.2% positive like-for-like revaluation net of CapEx and 0.6% including CapEx; EPRA NTA was EUR 4.6 billion, or EUR 25.8 per share. LTV was 33% versus 31% at year-end 2025, net debt-to-EBITDA was 8.7x, interest cover was 4.7x, cash and liquid assets were EUR 1.4 billion, and the cost of debt was 2.1%. For 2026, management reaffirmed guidance for like-for-like rental growth of around 3.5%, FFO I of EUR 175 million to EUR 185 million, FFO I per share of EUR 0.99 to EUR 1.05, and a dividend of EUR 0.50 to EUR 0.53.

Christian Windfuhr emphasized that the operating backdrop remains supportive, with structurally constrained housing supply in Germany and strong rental demand in both Germany and London. He said the company sees no material impact from geopolitical volatility on operations and that capital markets remain open, while the fully refinanced perpetual note stack reduces near-term market risk. His tone was confident and defensive: focus on balance-sheet strength, steady rental growth, and preserving flexibility for growth and downside protection.

Idan Hadad highlighted that H1 net rental income increased to EUR 219 million and adjusted EBITDA to EUR 174 million, while finance expenses rose to EUR 37 million due to the full-period effect of debt raised earlier. He said the company recorded EUR 56 million of property revaluations and capital gains, maintained LTV at 33%, kept EUR 1.4 billion of cash and liquid assets, and held leverage metrics at 8.7x net debt-to-EBITDA and 4.7x interest cover. He also noted the May perpetual notes refinancing: EUR 600 million issued at a 5.25% coupon and EUR 603 million redeemed at 1.5%, and said the new dividend policy is 50% of FFO I per share.

Analysts focused on the rental growth trajectory, valuation outlook, leverage, acquisitions/disposals, Aroundtown’s stake, and refinancing liquidity. Management said the 3.3% like-for-like rental growth was driven by 2.1% re-letting and 1.2% indexation, and that they expect steady progress toward around 3.5% for 2026. On valuation, they said yields were broadly stable and any near-term transaction slowdown was tied to market volatility, while on liquidity they said EUR 1.4 billion of cash plus unencumbered assets gives room to refinance opportunistically rather than under pressure. They also confirmed Aroundtown increased its stake from 81.5% to 83% through market purchases, and said the leverage increase to 33% mainly reflected acquisitions and investments.