Aroundtown Narrows Loss to $481.5 Million in Q2 2024 Amid Stabilizing German Real Estate Market
German landlord Aroundtown raises annual forecast for key profitability metric as property valuations stabilize amid country's worst real estate crisis in decades.
GermanyReal EstateAroundtownQ2 2024LossProfitabilityProperty ValuationsReal Estate NewsAug 28, 2024
The company's Chief Capital Markets Officer, Oschrie Massatschi, stated that the market has moved away from the trough, and devaluations in the residential segment are expected to remain stable for the rest of the year. However, Massatschi noted that the company is not out of the woods yet, citing still high interest rates and a struggling German economy.
Aroundtown has raised its annual forecast for its key profitability metric, FFO I, to 290-320 million euros, compared to the previous forecast of 280-310 million. This follows a similar move by its 62% owned subsidiary, Grand City Properties, earlier in August.
The company has completed around 340 million euros worth of asset disposals in the first half of the year and plans to continue selling assets before reassessing the situation next year to determine if it can accelerate acquisitions again. Aroundtown recently issued two bonds to improve its cash liquidity, which will enable it to make acquisitions in 2025.
Aroundtown's shares were up 3.7% as of 1233 GMT. The company's improved outlook is a positive sign for the German real estate market, which has been hit hard by soaring inflation and higher borrowing costs over the past year.
Industry leader Vonovia also reported a narrower loss for the first half of the year, indicating that the sector may be stabilizing. However, analysts caution that the market is not yet out of the woods, and further challenges lie ahead.
In a sign of stabilizing market sentiment, Aroundtown's shares have risen 3.7% as of 1233 GMT. The company's improved outlook and reduced loss are positive indicators for the German real estate market, which has been struggling in recent years.
Information
Aroundtown is a German real estate company that is one of the largest listed landlords in the country. The company has a significant portfolio of residential and commercial properties in Germany and other European countries.
Aroundtown is a leading German real estate company that is committed to providing high-quality properties and services to its customers. With a strong focus on sustainability and customer satisfaction, Aroundtown is well-positioned to navigate the challenges of the German real estate market.
Frequently Asked Questions
What was Aroundtown's loss in Q2 2024?
Aroundtown's loss narrowed to 432 million euros ($481.5 million) in Q2 2024.
What is the outlook for Aroundtown's key profitability metric, FFO I?
Aroundtown has raised its annual forecast for FFO I to 290-320 million euros.
What is the current state of the German real estate market?
The German real estate market has been hit hard by soaring inflation and higher borrowing costs, but recent reports from Aroundtown and Vonovia suggest that the sector may be stabilizing.
What is Aroundtown's strategy for the rest of the year?
Aroundtown plans to continue selling assets before reassessing the situation next year to determine if it can accelerate acquisitions again.
How has Aroundtown's share price performed recently?
Aroundtown's shares were up 3.7% as of 1233 GMT.
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