THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS OR REGULATIONS

GRAND CITY PROPERTIES S.A. ANNOUNCES RESULTS FOR H1 2023 WITH SOLID OPERATION RESULTS AND STABLE LEVERAGE

• Net rental income for H1 2023 of €204 million, higher by 5% as compared to €195 million in H1 2022.
• Adjusted EBITDA of €160 million in H1 2023, increasing by 5% as compared to €152 million in H1 2022.
• FFO I of €94 million in the first six months of 2023, lower as compared to €97 million in the comparable period of 2022 due to higher financing costs.
• FFO I per share of €0.54 per share in H1 2023 as compared to €0.59 per share in H1 2022.
• Following full external valuation of the portfolio in H1 2023, the like-for-like value declined by 5.4%. Portfolio value per sqm of €2,183 per sqm as of June 2023.
• Net loss of €402 million in H1 2023 mostly due to the negative property revaluations, offset by positive operational profits.
• Cash and liquid assets of €714 million at the end of June 2023, reflecting 18% of debt and cover debt maturities until Q2 2026.
• Average cost of debt of 1.6% with an average debt maturity of 5.7 years.
• Conservative financial profile with a low LTV of 36% as of June 2023, stable compared to December 2022 and ICR of 5.8x in H1 2023. Unencumbered assets amounting to €7.7 billion and representing 83% of total portfolio value providing additional financing flexibility.
• EPRA NTA of €4.3 billion or €24.7 per share as of the end of June 2023, down 8% and 9% respectively from December 2022.
• Solid equity base with an equity ratio of 51% as of the end of June 2023.
• FY 2023 guidance slightly updated as a result of the solid operational result.

Luxembourg, August 16, 2023 – Grand City Properties S.A. (“GCP” or the “Company”) announces results for the first six months of 2023 with net rental income of €204 million, higher by 5% as compared to €195 million in H1 2022. The increase was the combined result of the like-for-like rental growth of 2.7%, of which 2.4% came from in-place rent growth and 0.3% from occupancy increase, and the impact from acquisitions in 2022, partially offset by disposals. Adjusted EBITDA totaled €160 million in H1 2023, also up by 5% year-over-year. FFO I amounted to €94 million in the first six months of 2023, lower as compared to €97 million in the comparable period in 2022 with higher finance expenses and perpetual notes attribution offsetting the operational growth. FFO I per share was €0.54 per share in H1 2023, as compared to €0.59 per share in H1 2022. The portfolio vacancy rate reduced to an all-time low of 3.9% as of June 2023 from 4.2% in December 2022. Due to the good operational progress and on the back of higher like-for-like rental growth, the FFO I guidance was slightly updated to the range of €175 million to €185 million, from €170 million to €180 million.   

In the first six months of 2023, GCP externally revalued the full portfolio and recorded a like-for-like value decline of 5.4% excluding the contribution from capex (4.8% including capex). Property revaluation and capital gains totaled negative €539 million, with negative revaluation across the entire portfolio, driven by higher discount and cap rates as a result of higher interest rates. The yield expansion was partially offset by the operational growth driven by higher in-place rent and lower vacancy. Portfolio valuations remain materially below replacements costs and benefit from the systemic supply/demand imbalance.

In H1 2023 GCP signed disposals in the amount of €130 million, which validates the Company’s ability to sell properties also in a challenging market. Furthermore, GCP signed approximately €210 million in new bank debt in H1 2023 and signed an additional bank debt of €230 million in Q3 2023. The Company leveraged its liquidity position to repay €89 million in nominal value near term bonds at an average discount of 8%. As of June 2023, cash and liquid assets cover debt maturities for the next 3 years until Q2 2026. The Company’s average cost of debt was 1.6% with an average debt maturity of 5.7 years. The disposals, supported by the operational cashflow, the suspension of the 2022 dividend and debt repayment at discount, allowed GCP to maintain a stable LTV compared to year-end 2022 of 36%, despite the negative portfolio revaluation.

Refael Zamir, CEO of Grand City Properties: "The first half of 2023 was marked by a solid operational performance. Despite the valuation headwinds, our efforts to de-lever were successful in the period and allowed us to offset the negative revaluation and keep leverage stable. I want to thank all team members for their hard work and dedication during this period.”

Financial statements for H1 2023 are available on the Company's website: https://www.grandcityproperties.com/investor-relations/publications/financial-reports/

For definitions of the alternative performance measures please see the relevant section in the pages 30 - 34 of the financial statements for H1 2023, which you can find on the website under investor relations > publications > financial reports or follow this link:

https://www.grandcityproperties.com/fileadmin/user_upload/03_investor_relations/Downloads/2023/GCP_Q2_2023.pdf

About the Company

The Company is a specialist in residential real estate, value-add opportunities in densely populated areas primarily in Germany and London. The Company’s strategy is to improve its properties by repositioning and intensive tenant management, and then create value by subsequently raising occupancy and rental levels. Further information: www.grandcityproperties.com

Grand City Properties S.A. (ISIN: LU0775917882) is a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 37, Boulevard Joseph II, L-1840 Luxembourg, Grand Duchy of Luxembourg and being registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés Luxembourg) under number B 165 560. The shares of the Company are listed on the Prime Standard segment of Frankfurt Stock Exchange.

Contact:

Grand City Properties S.A.
37, Boulevard Joseph II,
L-1840 Luxembourg
T: +352 28 77 87 86
E: [email protected]
www.grandcityproperties.com

Investor Relations Team:
Grand City Properties S.A.
E: [email protected]

DISCLAIMER:

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (EEA), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE “QUALIFIED INVESTORS” WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED (THE PROSPECTUS DIRECTIVE) (QUALIFIED INVESTORS). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN INVESTOR) OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH STATEMENTS, EACH OF WHICH CONSTITUTES A FORWARD-LOOKING STATEMENT SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY. ACTUAL RESULTS COULD DIFFER MATERIALLY, DEPENDING ON A NUMBER OF FACTORS.