Listed Grand City sees surge in net profits, doubles assets

We published a number of articles in recent issues of REFIRE on the Luxembourg-based Grand City Properties, a specialist investor in undervalued German residential portfolios. Our interest stemmed from the company’s relative anonymity, as a small but growing player in a highly competitive sector, and from the background and market views of CEO Christian Windfuhr with whom we held a long discussion, a highly-experienced manager with a background in hotel investment, which represents the second leg of the company’s related activities.

Grand City listed on the Frankfurt Stock Exchange earlier this year, and in its first quarterly report said it has seen net profit for the first nine months rise 105% year on year to €137m. FFO per share in the period came to €0.32, on revenue up 88.8% to €64.3m; EPRA NAV was up 64% on end-2012 to €556m. At end-September, the firm had cash and liquid securities of €165m, an LTV of 45.8% and unencumbered assets worth over €200m.

No material maturities, averaging at six years, are due until 2017, the firm said. In the third quarter, a €100m 2017 convertible bond completed full conversion into equity, thus reducing its interest payments. The target LTV is to stay below the 55% mark, says the company statement.

The company currently owns 22,000 residential units, and is “in an advanced process of signing a string of new acquisitions and options over various underperforming property portfolios with a total volume of more than €200m.” This is a big leap from the 10,000 units held at the beginning of the year, since when acquisitions were made in Berlin, North Rhine Westphalia, Mannheim, Nuremberg and Dresden.