Aroundtown reports Q2 loss at Rs.432 million amid stabilising market
ECONOMY & POLICY

Aroundtown reports Q2 loss at Rs.432 million amid stabilising market

German landlord Aroundtown raised its annual profitability forecast on Wednesday, signaling a stabilising property market amidst Germany's most severe real estate crisis in decades.

After years of growth fuelled by low interest rates, the German property sector has been hit hard by soaring inflation and rising borrowing costs over the past year. However, Aroundtown, one of the country's largest listed landlords, reported a narrower second-quarter loss of Rs.432 million, down from 1.27 billion euros a year earlier.

The reduction in losses was primarily due to a smaller decline in property valuations, which fell by 2.4% on a like-for-like basis, supported by improving economic conditions and market sentiment.

"We've definitely moved away from the trough. Devaluations in the residential segment should remain fairly stable for the rest of the year," said Oschrie Massatschi , Chief Capital Markets Officer.

Earlier this month, industry leader Vonovia also reported a narrower loss, suggesting the real estate crisis might be easing. However, Massatschi cautioned that challenges remain, pointing to high interest rates and a struggling German economy.

Aroundtown now expects its funds from operations (FFO I) "a key industry profitability metric" to reach 290-320 million euros this year, up from the previous forecast of 280-310 million euros. This outlook upgrade follows a similar move by its 62%-owned subsidiary, Grand City Properties, earlier in August.

"A 3% guidance increase in this environment indicates a certain level of stability," said Andre Remke, Analyst, Baader Helvea.

Aroundtown completed asset disposals worth around 340 million euros in the first half of 2024 and plans to continue selling assets this year. The company also issued two bonds to bolster cash liquidity, setting the stage for potential acquisitions in 2025.

(ET)

German landlord Aroundtown raised its annual profitability forecast on Wednesday, signaling a stabilising property market amidst Germany's most severe real estate crisis in decades. After years of growth fuelled by low interest rates, the German property sector has been hit hard by soaring inflation and rising borrowing costs over the past year. However, Aroundtown, one of the country's largest listed landlords, reported a narrower second-quarter loss of Rs.432 million, down from 1.27 billion euros a year earlier. The reduction in losses was primarily due to a smaller decline in property valuations, which fell by 2.4% on a like-for-like basis, supported by improving economic conditions and market sentiment. We've definitely moved away from the trough. Devaluations in the residential segment should remain fairly stable for the rest of the year, said Oschrie Massatschi , Chief Capital Markets Officer. Earlier this month, industry leader Vonovia also reported a narrower loss, suggesting the real estate crisis might be easing. However, Massatschi cautioned that challenges remain, pointing to high interest rates and a struggling German economy. Aroundtown now expects its funds from operations (FFO I) a key industry profitability metric to reach 290-320 million euros this year, up from the previous forecast of 280-310 million euros. This outlook upgrade follows a similar move by its 62%-owned subsidiary, Grand City Properties, earlier in August. A 3% guidance increase in this environment indicates a certain level of stability, said Andre Remke, Analyst, Baader Helvea. Aroundtown completed asset disposals worth around 340 million euros in the first half of 2024 and plans to continue selling assets this year. The company also issued two bonds to bolster cash liquidity, setting the stage for potential acquisitions in 2025. (ET)

Next Story
Infrastructure Energy

South West Pinnacle Wins Rs 30 Cr Oman Mining Contract

South West Pinnacle Exploration Ltd has secured a Rs 30 crore contract from Minerals Development Oman (MDO) for mining exploration in concession areas 12B and 13.The two-year project will be carried out via Alara Resources LLC, a JV in Oman. MDO, backed by Oman’s investment authorities, focuses on monetising mineral wealth.The contract covers copper, gold, and chromite and highlights South West Pinnacle’s growing footprint in international exploration and mining services. ..

Next Story
Equipment

Godrej GEG Boosts Intralogistics with AI and Green Tech

Godrej Enterprises Group (GEG) is revolutionising warehouse and factory logistics through its Material Handling Equipment and Storage Solutions arms by integrating AI, IoT, and automation.With 20–25% market share and 85% local sourcing, GEG champions Atmanirbhar Bharat and sustainability. The Chennai plant, a green manufacturing leader, uses RoHS-compliant materials and has slashed energy consumption by 60%.GEG serves e-commerce, FMCG, retail, and cold chains with high-performance racking and electric forklifts. Upcoming IoT-enabled forklifts and telematics solutions aim to improve speed, sa..

Next Story
Infrastructure Urban

Amit Shah Inaugurates Key Projects Across Gujarat

Union Home Minister Amit Shah inaugurated and laid the foundation stone for various projects in Gujarat’s Panchmahal district and Ahmedabad.In Godhra, he inaugurated the Center of Excellence building, sports complex, reservoir, and Miyawaki plantation. In Ahmedabad, he unveiled a new cooperative complex in Adaroda village and a primary school in Juwal.These projects, under the Model Co-op Village scheme, aim to boost education, sustainability, and rural development across the state. ..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?