Aroundtown Property Holdings Plc.
Residential - Aroundtown
The company said in its annual report it still sees considerable value-add potential in its residential portfolio, with projected annual rents still having the potential to rise by up to 30% to reach market levels.
The Cyprus-based Aroundtown Property Holdings, which focuses on value-added income-gerating properties in Germany, saw its rental and operating income rising in the first six months by 138% to €110m.
The company said that net profit rose to €510m in the period, up from €505m in the same period of last year, while earnings before interest, tax and depreciation (EBITDA) increased to €610m from €536m in H1 2015. Its funds from operations FFO 1 was €71m, up 77% year on year, while its EPRA Net Asset Value rose to €3.9bn from €3bn in December 2015.
Aroundtown, which operates and rents commercial properties and owns and manages residential properties, said results had improved thanks to 'intensive property management, including operational and repositioning activities and generating a strong cash flow and great growth potential.'
The bulk of the group's assets are in the German office sector (37%), followed by industrial & logistics (26%), retail (16%), residential and hotels. Over 50% of the properties it owns are in Berlin, Munich, Hamburg, Frankfurt and Dresden.
In residential, Aroundtown owns 33% of the Frankfurt-listed Grand City Properties, an opportunistic investor in apartments in densely populated areas in Germany, mainly Berlin and North Rhine Westphalia, which has just raised €200m in perpetual subordinated notes paying 2.75% for further expansion. GCP own 82,000 apartments and manages a further 13,000 for third parties.
The repositioning measures and new acquisitions resulted in the decrease of the vacancy rate of the commercial portfolio to 7.4% in August 2016, Aroundtown said. The company intends to continue adding to its portfolio of assets. The group’s €227mln cash pile and the additional €500m raised in the bond issuance completed in July 2016 provide ‘significant firepower for additional acquisitions,’ Aroundtown said. The company's LTV is 40%, which should fall to 32% after conversion of the convertible bond.
In June this year rating agency Standard & Poor's upgraded Aroundtown’s credit rating to investment grade rating BBB, reflecting a "stable outlook and the view that the portfolio should generate increasing recurring cash flows."
