German landlord Aroundtown sees property values stabilising, lifts outlook

Reuters

German landlord Aroundtown sees property values stabilising, lifts outlook

5:48 sáng giờ GMT, 28 Tháng 8 2024

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Adds quotes from interview in paragraphs 5, 7, 12 and 13

By Marleen Kaesebier

Aug 28 (Reuters) -German landlord Aroundtown AT1.DE raised the annual forecast for its key profitability metric on Wednesday, as it became the latest company to flag stabilising property valuations amid Germany's worst real estate crisis in decades.

After a boom driven by low interest rates, the German property sector was hit hard by soaring inflation and higher borrowing costs over the past year.

Aroundtown, one of the largest listed landlords in the country, said its second-quarter loss narrowed to 432 million euros ($481.5 million) from 1.27 billion a year earlier.

That was mainly thanks to a much smaller decline in property valuations, which fell 2.4% on a like-for-like basis, helped by improving economic conditions and market sentiment, it said.

"We definitely moved away from the trough. Devaluations in the residential segment should remain fairly stable for the rest of the year," Chief Capital Markets Officer Oschrie Massatschi told Reuters.

Industry leader Vonovia VNAn.DE said earlier this month it had left the real estate crisis behind after it also reported a narrower loss for the first half of the year.

"I don't think it's all behind us as of yet," Massatschi said, pointing to still high interest rates and the struggling German economy.

Aroundtown expects its FFO I - a key industry metric measuring funds from operations - to reach 290-320 million euros this year, compared to the previous forecast of 280-310 million.

The outlook hike follows a similar move by its 62% owned subsidiary Grand City Properties GYC.DE earlier in August.

"A 3% guidance-increase in this environment at least indicates a certain stability or stabilisation," said Baader Helvea analysts Andre Remke.

Aroundtown said it had completed around 340 million euros worth of asset disposals in the first half.

Massatchi said the company would continue to sell assets this year before re-assessing the situation next year to see if it could accelerate acquisitions again.

The group recently issued two bonds to improve its cash liquidity, which Massatchi said sets it up for acquisitions in 2025.

Aroundtown's shares were up 3.7% as of 1233 GMT.

($1 = 0.8972 euros)

Reporting by Marleen Kaesebier in Gdansk; editing by Milla Nissi

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