German property group Aroundtown reports big loss for 2023

By Marleen Kaesebier and Chiara Holzhaeuser

March 27 (Reuters) - Aroundtown AT1.DE, one of Germany's largest listed landlords, on Wednesday reported a 2.436 billion euro ($2.64 billion) loss for 2023, showing how the country's worst real-estate crisis in decades is impacting property companies.

German real estate companies are having to cope with a property market downturn after boom years fuelled by low interest rates. The country's largest property company Vonovia VNAn.DE this month reported a record loss of more than 6 billion euros for 2023.

Aroundtown's loss was much wider than the 457.1 million euros it reported in 2022.

Its shares, which are down about 30% year to date, fell as much as 8% in early trading and were at the bottom of the German midcap index .MDAXI. They were up 1.1% by 0845 GMT.

On Tuesday, the company said it would suspend its dividend to "remain conservative in regard to capital preservation and to continue to focus on strengthening liquidity and de-leveraging."

"We were expecting this suspension (and for the next two years as well)," Jefferies analysts wrote in a note.

Aroundtown's real estate subsidiary Grand City PropertiesGYC.DE also said earlier in March that it would not pay a dividend for 2023.

Aroundtown reported funds from operations, excluding disposal gains, of 332 million euros, down 8% from the previous year and meeting its guidance for 2023.

The Luxembourg-based company said it expected its funds from operations to fall further in 2024, giving a range of 280 million to 310 million euros.

Aroundtown reported property revaluations amounting to negative 3.2 billion euros, a like-for-like devaluation of 11%.

The company increased its liquidity to 3 billion euros, up 11% from 2022, selling property assets worth 1.2 billion euros and taking on 1 billion euros of new bank debt.

It also said its liquidity position now covers debt maturities until mid 2026.

($1 = 0.9236 euros)

(Reporting by Marleen Kaesebier and Chiara Holzhaeuser; Editing by Kim Coghill, Jamie Freed and Jane Merriman)

((Marleen.Kaesebier@thomsonreuters.com; chiara.holzhaeuser@thomsonreuters.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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