German real estate company Grand City Properties (DE:GYC), or GCP, has delivered encouraging preliminary financial results for FY24, with net rental income increasing 3% to €423 million. This growth was driven by a 3.8% like-for-like (LFL) rental increase, mainly due to in-place rent growth. Analysts view the results positively, citing improved FFO I guidance and progress on asset disposals. Notably, LFL measures the change in a company’s revenue or property value, excluding the impact of new acquisitions or disposals.
Meanwhile, adjusted EBITDA rose by 5% to €335 million from €320 million in 2023. Further, funds from operations (FFO I) reached €188 million, reflecting a 2% rise from €184 million in 2023. FFO I per share rose to €1.08 from €1.07 in 2023, meeting the upper range of the company’s 2024 guidance. However, higher finance costs and perpetual notes slightly reduced the overall growth.
Grand City Properties Lifts Property Values and Sells Assets
Grand City Properties saw a 0.5% boost in property values on a like-for-like basis, bouncing back from the dip in the first half of 2024. This is the first value increase in two years, helped by stronger operations. The company’s rental yield rose to 4.9% by December 2024, up from 4.8% a year earlier.
During 2024, GCP signed asset sales worth €350 million, with €125 million coming in the fourth quarter. Of these, €270 million were completed at a small 2% discount to book value. These sales helped the company cut debt and strengthen its balance sheet.
GCP Cuts Debt and Boosts Liquidity
As of December 2024, Grand City Properties’ loan-to-value (LTV) ratio dropped to 33% from 37% in 2023. This decline was driven by higher property values in the second half of 2024 and the company’s efforts to reduce debt.
At the same time, liquidity reached €1.5 billion, supported by operational cash flows and asset disposal proceeds.
GCB Provides FFO I Outlook for 2025
Grand City Properties provided FFO I guidance for 2025 in the range of €185 million to €195 million. This is 3% above Goldman Sachs’ (GS) estimate of €184.7 million and 2% above the midpoint of Visible Alpha Consensus Data at €186.7 million.
It’s important to highlight that the audited financial statements for 2024 will be published on March 17, 2025.
Analysts’ Reactions Post Q4 Preliminary Results
Analysts welcomed GCP’s improved preliminary financial results. To begin with, Citi reiterated its Buy rating on the stock with a price target of €19.70. The firm sees upside potential as structural factors supporting rental growth are starting to take effect. Citi thinks Grand City Properties looks like a good buy at the current stock price. Its stable rents offer protection during market swings, and the company could gain from a market rebound.
Meanwhile, Berenberg also maintained a Buy rating with a €14.50 price target, highlighting GCP’s solid performance, improving balance sheet, and steady FFO I guidance. However, the firm awaits clarity on like-for-like rent growth and whether dividend payments will resume after a two-year pause.
At the same time, Goldman Sachs expects a positive impact on Grand City Properties’ shares due to the slight beat in 2025 FFO I guidance, stronger net tangible assets per share, and progress on asset disposals.
What Is the Price Target for Grand City Properties Stock?
Overall, GYC stock scores a Hold consensus rating based on four Buys, three Holds, and two Sell ratings. The average GYC stock price target of €13.64 implies 42.08% upside potential from current levels.
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