First Berlin Equity Research has published a research update on Grand City Properties S.A. (ISIN: LU0775917882). Analyst Ellis Acklin reiterated his BUY rating and maintained his EUR 12.80 price target.
Spearheaded by 2.7% LFL rental growth, good operational performance continued in Q2 prompting management to up FFO 1 guidance to €175m – €185m (old: €170m – €180m) underpinned by LFL net rent of >2% (old: 1% – 2%). As anticipated, FFO 1 took a small hit in Q2 (-3.3%) due to higher financing costs and perpetual note attribution. The entire portfolio was revalued in Q2 resulting in a 5.4% decrease in valuation excluding CapEx. This is line with expectations and should cheer investors concerned that much sharper declines were lurking. Cash and liquid assets (€0.7bn) now cover debt maturities until Q2/26. Meanwhile, there are signs that we are approaching the peak in interest rates, which should help end investor ennui. We remain Buy-rated on GCP with a €12.8 target price.