Grand City Properties boosts profit, FFO

Fast-growing German listed housing firm Grand City Properties posted a nine month increase of 65% in both net profit, to €286m, and funds from operations FFO, to €88m, boosted by strong portfolio growth and lower financing costs.

The company recently bought several new residential portfolios totalling about 5,000 units throughout North Rhine-Westphalia. The transactions came to €170m, with the portfolios generating annual rents of €15m. The portfolios have a 15% vacancy rate, which suggests sizeable upside potential for Grand City, which specialises on such turnaround opportunities.

The Luxembourg-headquartered company has grown its portfolio to 76,000 residential units valued at €3.77bn, up from 43,000 units at end-2014. “The newly acquired properties make a large contribution to the diversification and quality of the portfolio while maintaining high upside potential in terms of rent, occupancy and efficiency improvements,” said Grand City in a press statement.

At end September portfolio vacancy was at 12.5%, and average rents at €5.30 per sqm per month. Grand City also reported equity doubling to €2bn, taking the equity ratio to 44% from 40% at year-end 2014. The firm raised €1.2bn through several bond, equity and perpetual hybrid note issues over the first three quarters, and had €609m of liquidity available for investment. EPRA net asset value rose to €1.94bn from €1.44bn at the end of last year.

“We have exceeded our internal targets,” commented CEO Christian Windfuhr. “With abundant firepower and a strong operational platform, we enter into the final quarter of the year from a good standing point and with the expectation for a successful year.”