LUXEMBOURG (dpa-AFX) - The Aroundtown subsidiary Grand City Properties (GCP) was again in the red in the first half of the year. Due to a lower valuation of the real estate portfolio, the company posted a loss of just under 73.8 million euros, as the SDax group announced in Luxembourg on Wednesday. A year earlier, the devaluation of the portfolio had resulted in a loss of almost 402 million euros. In 2023, the company had slipped significantly into the red. Grand City Properties is more confident about its operating business in 2024. After early gains, the share price turned negative over the course of the year and recently lost 0.3 percent.

"We had a loss in value of around 2 percent in the first half of the year," CEO Christian Windfuhr told the financial news agency dpa-AFX. This is significantly less than in the previous year. The real estate devaluation has probably bottomed out. He did not rule out a further devaluation in the second half of the year. It should not exceed two percent, if at all.

In day-to-day business, however, demand for residential space dominated the picture. Net rental income rose by three percent to 211.5 million euros in the first half of the year. On a comparable basis, for example adjusted for property sales, they increased by 3.4 percent. However, somewhat higher costs, particularly for perpetual bonds, put pressure on the operating profit (FFO1). This fell slightly from 94 million euros in the previous year to 93.7 million euros.

Meanwhile, the company is making progress with its planned property sales. "We sold apartments for EUR 220 million in the first half of the year," said Windfuhr. Of these, residential units worth 100 million euros will not change hands until the second half of the year or the beginning of 2025. The apartments were sold at an average of two percent below book value. They are mainly located in London, North Rhine-Westphalia, Berlin and Hesse. At the end of June, Grand City Properties owned around 61,900 apartments, almost 1,400 fewer than at the end of 2023.

The company is more confident about the current year and has raised its profit target slightly. The Aroundtown subsidiary is now aiming for an operating profit of between 180 and 190 million euros in the current year, an increase of five million euros at the upper and lower end of the range. This would allow for both a slight decline and a year-on-year increase. Higher rental growth should also contribute to this. Here, the company is expecting an increase of more than three percent./mne/nas/jha/