Grand City Properties S.A. Reports Resilient H1 2026 Performance, Confirming Full-Year Guidance

Grand City Properties S.A., a leading real estate company, has announced its half-year 2026 results, showcasing robust operations that reaffirm the company's full-year 2026 guidance. The company's financial performance was underpinned by a 3% year-on-year increase in net rental income, reaching €219 million. This growth was primarily driven by sustained like-for-like rental growth of 3.3%, which effectively offset the impact of net disposals completed during the first half of 2026.

The company's adjusted EBITDA also rose by 3% to €174 million, as higher rental income was achieved against a broadly stable net operating cost. However, the Funds From Operations (FFO I) amounted to €91 million, representing a 4% decrease year-on-year. This decrease was primarily attributed to higher finance expenses, a higher perpetual notes attribution, and increased minority contributions. On a per-share basis, FFO I stood at €0.52 compared to €0.54 in the prior-year period.

Following a comprehensive external revaluation conducted in the first half, Grand City Properties S.A. recorded a property revaluation and capital gains result of €56 million. On a like-for-like basis, property values increased by 0.2% excluding capex and by 0.6% including capex. The company's net profit amounted to €129 million, down from €210 million in the prior-year period, primarily due to the lower revaluation result and higher finance expenses, partially offset by the portfolio's continued operational performance. Basic earnings per share stood at €0.49.

The company maintained a disciplined approach to capital recycling during the period. Disposals of €31 million, comprising mainly condominiums and properties in non-core locations, were completed at a 13% premium to book value and a 34% margin over total cost including capex. In parallel, Grand City Properties S.A. closed €75 million of residential acquisitions in Germany at an average multiple of 14x and completed part of a new-build acquisition in London for over €50 million, with the remaining approximately €50 million completed after the reporting period.

The company's financial position remained solid, with cash and liquid assets of €1.4 billion as of June 2026 representing 31% of total debt. The conservative profile was reflected in a loan-to-value (LTV) ratio of 33%, higher than the 31% recorded at December 2025 as a result of acquisitions and investments during the period, partially offset by positive revaluations and operational cash flow. The company's interest cover remained strong at 4.7x, and unencumbered assets amounted to €6.6 billion, representing 71% of portfolio value.

In the first half of 2026, the company refinanced its remaining 2026 perpetual notes in full, issuing €600 million of new perpetual notes at a 5.25% coupon and concurrently redeeming €603 million of notes bearing a 1.5% coupon. Following the transaction, Grand City Properties S.A. has no further perpetual notes reset dates until 2031. Reflecting the company's sound financial position and stable operating results, a dividend of €0.30 per share for the 2025 financial year was approved at the Annual General Meeting on 24 June 2026 and paid on 6 July 2026, amounting to approximately €53 million gross.

According to Refael Zamir, CEO of Grand City Properties: 'We are pleased to report a resilient performance in the first half of 2026, with our operations and financial position remaining solid. Our strategy of disciplined capital recycling, focused on disposals and acquisitions in core markets, continues to drive value creation for our shareholders.' The company's dividend policy has been set at 50% of FFO I from the financial year 2026, providing shareholders with an attractive yield while maintaining headroom to fund growth opportunities.

Looking ahead, Grand City Properties S.A. remains well-positioned to navigate the current market landscape, leveraging its diversified portfolio and robust financial foundation to drive long-term growth and value creation for its stakeholders. With a strong track record of operational performance and a disciplined approach to capital management, the company is poised to continue delivering attractive returns to its shareholders in the years to come.

In conclusion, Grand City Properties S.A.'s half-year 2026 results demonstrate the company's ability to drive growth and create value despite a challenging market environment. With its solid financial position, diversified portfolio, and disciplined approach to capital management, the company remains a compelling investment opportunity for those seeking stable and attractive returns in the real estate sector.