Grand City Properties S.A.

For 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 in H1 2025, and FFO I per share was EUR 0.52 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, reflecting a lower revaluation result and higher finance expenses. The portfolio saw a 0.2% positive like-for-like value change net of CapEx, EPRA NTA was EUR 25.8 per share, and vacancy was 3.7%. 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 per share. Management also said FFO I is expected to be slightly lower in 2026 than in 2025 because the new perpetual notes will offset some growth.

Christian Windfuhr struck a confident but measured tone, saying the business is benefiting from strong housing fundamentals in both Germany and London and that current geopolitical volatility has not caused a material impact on operations. He emphasized that the company has strengthened its capital structure by fully refinancing perpetual notes, which pushes the next call date to 2031 and reduces exposure to market swings. He also framed the updated dividend policy as a balance between shareholder returns and keeping the balance sheet strong for long-term growth.

Idan Hadad highlighted that the H1 numbers were supported by 3.3% like-for-like rent growth and a stable operating cost base, with adjusted EBITDA up 3% to EUR 174 million and net rental income up 3% to EUR 219 million. He noted finance expenses rose to EUR 37 million, FFO I was EUR 91 million, and the full revaluation produced EUR 56 million of property revaluations and capital gains. On the balance sheet, he cited LTV of 33%, EPRA LTV of 45%, EUR 1.4 billion of cash and liquid assets, a 2.1% cost of debt, average debt maturity of 3.8 years, and 71% of the portfolio unencumbered, while also pointing to the refinancing of EUR 600 million of new perpetual notes at 5.25% against redeemed notes at 1.5%.

Analysts focused on the drivers of rent growth, valuation resilience, leverage, and financing plans. Management said the 3.3% like-for-like rent growth came mainly from re-letting and indexation, with Berlin reference rents still moving up and London vacancy remaining structurally low; they also said the 0.2% positive valuation result reflected stable yields and solid operations. On leverage and liquidity, management said the higher LTV was driven by acquisitions and investments, but remains low, and that cash plus liquidity comfortably covers near-term maturities; they also signaled a willingness to do opportunistic liability management ahead of 2028-2030 maturities if market conditions allow. Questions on Aroundtown’s stake were answered by saying it rose from 81.5% to 83%, likely through market purchases.