LUXEMBOURG (dpa-AFX) - Aroundtown subsidiary Grand City Properties surprisingly does not plan to pay a dividend for the past fiscal year. In a statement published in Luxembourg on Thursday, the company justified this by citing uncertainty with regard to valuations, rising financing costs and limited access to capital markets. Most recently, the board had still announced plans to pay a dividend. Experts surveyed by Bloomberg had even expected a slight increase in direct profit sharing to 85 cents per share. The stock slumped nearly 13 percent in early trading. Parent Aroundtown's stock lost more than five percent on the MDax.

Last year, strong demand for rental apartments drove the residential real estate group. "In 2022, we continued to

focused on solid operational improvement, reduced portfolio vacancy to a record low of 4.2 percent and achieved our 2022 targets," said Refael Zamir, the company's chief executive.Operating profit (FFO 1) rose three percent year-on-year to 192 million euros. For the current year, the company expects a decline to between 170 million and 180 million euros.

Net rental income increased by six percent last year to around 396 million euros. Most of the increase came from recent acquisitions, with the remainder coming from rent increases and lower vacancy rates. The bottom line in the period under review was a profit of 179 million euros, a good 70 percent less than in the previous year. This was mainly due to a lower revaluation of the real estate portfolio.

Like other companies in the sector, the Group is keeping a close eye on its debt. Grand City Properties repaid more than 615 million euros of its debt last year, the real estate group added. Among other things, the company had redeemed convertible bonds and a loan with a shorter term ahead of schedule.

The company's cost of debt remained low at 1.3 percent, with an average maturity of 5.9 years. The group said it had cash and cash equivalents of about 429 million euros, which covered debt maturities through the second quarter of 2025.

With its nearly 64,300 apartments, Grand City Properties is particularly active in densely populated areas of Germany, such as Berlin, North Rhine-Westphalia, the Halle-Leipzig-Dresden region and the Rhine-Main region. Grand City Properties is also represented in major cities such as London and Munich. The largest shareholder is the commercial real estate group Aroundtown, which holds 59 percent of the company./mne/men/tih