Dresden
FINANCIAL RESULTS PRESENTATION Q1 2024
May
2024
HIGHLIGHTS
2
Q1 2024 KEY RESULTS SUMMARY
KEY FINANCIAL RESULTS
P&L | Q1 2024 | change | Q1 2023 |
Net Rental | €105,301 | 4% | €101,376 |
Income | |||
Adjusted | €81,984 | 3% | €79,504 |
EBITDA | |||
FFO I | €45,249 | -4% | €46,955 |
FFO I per | €0.26 | -4% | €0.27 |
share | |||
GUIDANCE CONFIRMED (FFO I of 175M-185M)
Balance | Mar 2024 | change | Dec 2023 |
Sheet | |||
Cash and | |||
liquid | €1,287m | 5% | €1,230m |
assets | |||
Total equity | €5,277m | 1% | €5,230m |
EPRA NTA | €4,063m | 1% | €4,014m |
EPRA NTA | €23.5 | 1% | €23.2 |
per share | |||
FINANCIAL PROFILE
Mar 2024 | Dec 2023 | |
LTV | 36% | 37% |
EPRA LTV | 48% | 48% |
Net debt/ | 9.6x | 10.0x |
EBITDA | ||
ICR | 5.8x | 5.6x |
BBB+ | |||
Negative Outlook | |||
Affirmed in Dec 23 | |||
Mar 2024 | Dec 2023 | ||
Cost of debt | 1.9% | 1.9% | |
Ø debt | 5.1 years | 5.3 years | |
maturity | |||
Unencumbered | €6.6bn | €6.6bn | |
Assets (€bn) | |||
Unencumbered | 75% | 75% | |
Assets (%) | |||
PORTFOLIO
Mar 2024 | Dec 2023 | |
Annualised net | €410m | €406m |
rent | ||
Units | 63,216 | 63,303 |
Vacancy | 3.9% | 3.8% |
In-place rent | €8.7/sqm | €8.6/sqm |
L-F-L rental | 3.4% | 3.3% |
growth | ||
+3.4%
+3.3% | L-F-L | +0.1% |
Total net rent growth | ||
L-F-L | Mar 2024 | L-F-L |
In-place rent growth | Occupancy growth | |
Mar 2024 | Mar 2024 |
3
SUCCESSFUL PERPETUAL NOTES TRANSACTION
EXCHANGE AND TENDER OFFER IN Q2 24
- In April 2024, GCP launched an exchange offer with a 15% tender option to the holders of two of its perpetual notes with aggregate nominal amount of €550m.
- The transaction was highly successful with high acceptance rate of 82%.
- The holders had the opportunity to exchange the current notes with
- new perpetual notes at the relevant exchange ratio, or
- new perpetual notes at the relevant exchange ratio, and a tender offer for 15% of their exchanged notes at a small premium to market prices prior to the offer
RESULT AND BENEFITS
- With the high acceptance rate and issuance of a new large note, GCP reestablished itself in the Capital market.
- The offer supports credit metrics as S&P equity content was regained, with only little cash usage.
- Savings of €2m of coupon per annum, due to the reduction of the outstanding balance. Accretive impact starting Q2 2024, following the completion of the transaction.
- New perpetual notes have first call date in January 2030. Next perpetual call date for existing series is in mid-2026.
Nominal | Coupon | First call date | % and | Exchange | Amount | Nominal | |
Amount | absolute | Ratio | repurchased | Amount | |||
outstanding | accepting | via tender | outstanding | ||||
before | the offer | after | |||||
6.332% Perpetual Notes | €200m | 6.332% | Jan 2023 76% / €152m | 100% | €13m | €48.4m | |
5.901% Perpetual Notes | €350m | 5.901% | Oct 2023 | 85% / €298m | 98% | €21m | €52.5m |
New 6.125% Perpetual | - | 6.125% | Jan 2030 | €409.5m | |||
Notes | |||||||
Total Perpetual Notes: | €550m | Reduction: | Reduction: | €510m | |||
€6m | €34m | ||||||
MAIN CHARACTERISTICS PERPETUAL NOTES
- Perpetual notes have no maturity date. On specified dates GCP can call the notes. There is no requirement to call. Noteholders don't have a put option on the call date.
- Perpetual notes are ranked junior to debt securities and have no covenants.
- Coupons are deferable at GCP's discretion.
- Under IFRS Perpetual Notes are 100% equity instruments. Under S&P methodology Perpetual Notes are considered 50% equity / 50% debt until the first call date.
- The nature and use of perpetual notes has a positive corporate credit rating impact.
4
OPERATIONAL & FINANCIAL RESULTS
5
STRONG OPERATIONAL DYNAMICS
CONTINOUSLY DELIVERING OPERATIONAL PERFORMANCE
+3.4%
+3.3% | L-F-L | +0.1% |
Total net rent growth | ||
L-F-L | Mar 2024 | L-F-L |
In-place rent growth | Occupancy growth | |
Mar 2024 | Mar 2024 |
Cologne
In-place rent
+3.2% | (in €/sqm) | |||
CAGR | ||||
8.2 | 8.3 | 8.6 | 8.7 | |
8.1 | ||||
Dec | Dec | Mar | Dec | Mar |
2021 | 2022 | 2023 | 2023 | 2024 |
Vacancy rate remains at low level at 3.9% as of March 2024. GCP has seen significant reduction in vacancy in recent years, as a result of GCP's strong operating performance and strong market demand.
In-place rental growth continued, reaching €8.7/sqm
as of March 2024 and further upside to catch up to current market rents.
Demand remains very strong in key metropolitan areas, while supply is drying up further.
Vacancy | ||||
-1.2% | ||||
5.1% | ||||
4.2% | 4.2% | 3.8% | 3.9% | |
Dec | Dec | Mar | Dec | Mar |
2021 | 2022 | 2023 | 2023 | 2024 |
6
PORTFOLIO OVERVIEW
- The annualized net rental income is significantly below market rent, indicating a market upside potential of 22%.
- In addition to the portfolio below, GCP has investment property held for sale amounting to ~€170 million.
- No valuations were carried in Q1 2024. The next portfolio valuation will be part of the H1 2024 report.
- In Q1 2024, GCP completed €30 million of assets disposals at a 2% premium to book value and signed additional €23 million of disposals, expected to close in the coming periods.
ANNUALISED NET RENTAL INCOME vs.
MARKET POTENTIAL (ERV)
(in € millions)
+22%
upside 500
410
Mar 2024 | Annualised market |
annualised net rent | potential (ERV) |
Value | Area | EPRA | Annualised | In-place rent | Number of | Value per | Rental | |
March 2024 | net rent | per sqm | sqm | |||||
(in €M) | (in k sqm) | vacancy | units | yield | ||||
(in €M) | (in €) | (in €) | ||||||
NRW | 1,796 | 1,193 | 4.5% | 93 | 6.6 | 17,436 | 1,506 | 5.2% |
Berlin | 1,944 | 625 | 4.0% | 70 | 9.3 | 8,492 | 3,109 | 3.6% |
Dresden/Leipzig/Halle | 1,157 | 816 | 3.0% | 57 | 5.9 | 13,997 | 1,419 | 4.9% |
Mannheim/KL/Frankfurt/Mainz | 390 | 177 | 3.2% | 19 | 9.0 | 3,013 | 2,196 | 4.9% |
Nuremberg/Fürth/Munich | 289 | 80 | 5.4% | 11 | 12.0 | 1,430 | 3,629 | 3.7% |
Hamburg/Bremen | 387 | 264 | 3.5% | 22 | 7.2 | 3,996 | 1,462 | 5.8% |
London | 1,664 | 186 | 3.4% | 84 | 38.8 | 3,462 | 8,949 | 5.1% |
Others | 885 | 676 | 4.5% | 54 | 7.0 | 11,390 | 1,309 | 6.1% |
Development rights & Invest | 169 | |||||||
Total March 2024 | 8,681 | 4,017 | 3.9% | 410 | 8.7 | 63,216 | 2,119 | 4.8% |
Total December 2023 | 8,629 | 4,020 | 3.8% | 406 | 8.6 | 63,303 | 2,109 | 4.8% |
7
P&L RESULTS
Selected consolidated statement of profit or loss | Q1 2024 | Q1 2023 | |
in € '000 unless otherwise indicated | |||
Revenue | 149,052 | 150,052 | |
Net rental income | 105,301 | 101,376 | |
Property revaluations and capital gains (loss) | 640 | (53,091) | |
Property operating expenses | (64,807) | (67,894) | |
Administrative and other expenses | (2,951) | (2,817) | |
EBITDA | 81,934 | 26,250 | |
Adjusted EBITDA | 81,984 | 79,504 | |
Depreciation and amortization | (1,448) | (2,311) | |
Finance expenses | (14,121) | (13,470) | |
Other financial results | (8,961) | (20,464) | |
Current tax expenses | (10,282) | (10,111) | |
Deferred tax income (expenses) | (3,393) | 8,511 | |
Profit (loss) for the year | 43,729 | (11,595) | |
Basic earnings (loss) per share in € | 0.17 | (0.09) | |
Diluted earnings (loss) per share in € | 0.17 | (0.09) | |
NET RENTAL INCOME | ADJUSTED EBITDA |
(in € millions) | (in € millions) |
+4% | 82 | |||
105 | +3% | |||
80 | ||||
101 | ||||
Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 |
- Net rental income and adjusted EBITDA increased primarily due to the solid like-for-like rental growth of 3.4% and despite the negative impact of net disposals.
- Operating costs reduced in Q1 2024 compared to Q1 2023, due lower utility costs related mainly to heating expenses which are recoverable from tenants.
8
FFO I + II
in € '000 unless otherwise indicated | Q1 2024 | Q1 2023 |
Adjusted EBITDA | 81,984 | 79,504 |
Finance expenses | (14,121) | (13,470) |
Current tax expenses | (10,282) | (10,111) |
Contribution to minorities | (1,408) | (1,530) |
Adjustment for perpetual notes attribution | (10,924) | (7,438) |
FFO I | 45,249 | 46,955 |
FFO I per share (in €) | 0.26 | 0.27 |
FFO I | 45,249 | 46,955 |
Result from disposal of properties | 848 | 3,785 |
FFO II | 46,097 | 50,740 |
FFO I | FFO I per share |
(in € millions) | (in €) |
-4% | |||
47 | 45 | 0.27 | -4% |
0.26 | |||
Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 |
- FFO I decreased by -4%, mainly due to the reset of two perpetual notes in 2023 at the end of January 2023 and October 2023 where the coupon rates increased from 2.75% to 6.3% and from 2.5% to 5.9% respectively.
- Lower FFO II compared to Q1 2023, mainly due to the lower disposal activity in Q1 2024. In Q1 2024 GCP disposed investment properties in the amount of ca. €30 million at a premium of 2% over book values and 3% over total cost.
9
MAINTENANCE & CAPEX
REPOSITIONING CAPEX
- Focus remains on improving asset quality, value creation and increasing rental income
- Other value-add measures include:
- Upgrading apartments for new rentals
- Enhancing staircases and public areas
- Installing playgrounds
- Installing elevators and ramps
- Other similar measures
- In Q1 2024, GCP invested €4.5/avg sqm into repositioning capex., stable as compared to Q1 2023.
- Additionally, in Q1 2024, GCP invested around €1 million in modernisation and €3 million in pre-letting modifications
- Investments related to energy efficiency and CO2 reduction, such as replacing windows and heating systems, are attributed to the above category's depending on the project specifics
REPOSITIONING CAPEX & MAINTENANCE
(in € per average sqm)
6.0 | 6.0 | |||||
Repositioning | ||||||
capex per avg | ||||||
sqm | 4.5 | 4.5 | ||||
Maintenance per | ||||||
avg sqm | ||||||
1.5 | 1.5 | |||||
Q1 2023 | Q1 2024 | |||||
ADJUSTED FUNDS FROM OPERATIONS (AFFO) | ||||||
in € '000 unless otherwise indicated | Q1 2024 | Q1 2023 | ||||
FFO I | 45,249 | 46,955 | ||||
Repositioning Capex | (18,659) | (18,298) | ||||
AFFO | 26,590 | 28,657 | ||||
ROOF RENOVATION & MODERNISATION
Hamm (before)
Hamm (after)
10
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Grand City Properties SA published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 04:45:00 UTC.