First Berlin Equity Research has published a research update on Aroundtown SA (ISIN: LU1673108939). Analyst Ellis Acklin reiterated his BUY rating and increased the price target from EUR 3.30 to EUR 3.40.

LFL rental growth of 3.2% led good operational performance in 2023. Management guide for ~1% to 2% LFL this year spurred by: (1) strong residential market dynamics; (2) further office CPI-indexation offsetting rising vacancies; and (3) a full recovery of the hotel portfolio. As anticipated, FFO 1 took another hit in Q4 (-13%) due to higher financing costs and perpetual note attribution. Cash and liquid assets tallied €3bn and cover debt maturities until mid-2026. Meanwhile, AT launched an exchange offer with a 15% tender option to certain perpetual note holders. Good participation would help restore the notes‘ equity component and could boost FFO 1 on reduced coupon payments. The landlord looks well positioned to handle the still challenging property sector with its disciplined liquidity management approach. We remain Buy-rated on AT with a €3.4 target price (old: €3.3).