Grand City Properties S.A. / Key word(s): Quarter Results/Interim Report
20.05.2015 07:00

Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer / publisher is solely responsible for the content of this announcement.

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THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS OR REGULATIONS

GRAND CITY PROPERTIES S.A. ANNOUNCES STRONG START INTO 2015 WITH Q1 FIGURES SHOWING INTERNAL AND EXTERNAL GROWTH

- Rental and operating income increased to EUR66 million, up 44% compared     to Q1 2014

- EBITDA at EUR94 million, up 16% compared to Q1 2014
- FFO I increased to EUR25 million, up 53% compared to Q1 2014
- FFO I after Hybrid Notes attribution per share at EUR0.20, up 43%     compared to Q1 2014

- Adjusted EBITDA increased to EUR34.2 million, up 49% compared to Q1     2014

- Net profit at EUR80 million; EPS at EUR0.63, up 19% compared to Q1 2014
- Equity rose to EUR1.54 billion, up 48% from year-end 2014
- EPRA NAV climbed to EUR1.53 billion, up from EUR1.44 billion year-end     2014

- Leverage is lower at 38% LTV, compared to 45% year-end 2014
- LTV assuming conversion of the convertible bond is at 30% (share price     is over 70% premium to the conversion price)

- Cash and liquid assets at EUR203m, supported by Hybrid Notes issuance in February and March 2015. EUR400 million Series E issuance in April     2015 provided further acquisition firepower

- Like-for-like in-place rent growth is 2.4% p.a., L-f-l occupancy growth     is 2.7% p.a.

Luxembourg, May 20, 2015 - Grand City Properties S.A. (the "Company", "GCP") announces the results for Q1 2015. The figures show ongoing positive development in the overall portfolio of the Company as well as its profitability, primarily stemming from operational initiatives implemented in the first quarter of 2015 and the second half of 2014.
Growth both in the top and bottom line
During the first 3 months of 2015 GCP added 9,000 units to its portfolio, raising the total holdings by 21% to 52,000 units. Including the 22,000 units managed for third parties, the Company managed 74,000 units as of March 2015. As of May 2015 the total portfolio rose to 55,000 units, bringing the total units under management to 77,000 units. The additions were made through several accretive deals, in line with the Company's acquisition criteria and further adding to the quality of the portfolio and benefits from economies of scale.

The success of the business model was validated at the bottom line with strong net profits of EUR80 million, supported by operational improvements and further extraction of the potential embedded in the portfolio. As a result, EPRA NAV rose to EUR1.53 billion, up 6.3% from year-end 2014.
Profitability rises as operational improvements unfold impact While acquisitions form an essential part of the Company's growth, the turnaround of the properties is the key determinant of the success of the growth and profitability driver. Profitability figures reflect the successful turnarounds in Q1 2015 and the lagged effect of previous periods. FFO I rose by 53% to EUR25.2 million in comparison to Q1 2014, reflecting over EUR100 million on a quarterly annualized basis.
Strong capital market access built on conservative capital structure GCP was able to further improve its capital structure. The LTV fell from 45% as of year-end 2014 to 38% in March 2015. Assuming conversion of the convertible bonds that are deep in the money since August 2014, LTV is at 30%. The equity ratio improved from 40% at the year-end of 2014 to 49% in March 2015, 56% assuming the conversion of the convertibles. Further, the interest coverage ratio significantly improved from 4.5x to 5.7x between Q1 2014 and Q1 2015 as well as the debt service coverage ratio at 4.3x from 3.4x in the respective period. Unencumbered assets amounted to EUR1.53 billion as of March 2015 (58% of investment property values), further increased to EUR1.65 billion in May 2015, providing exceptionally high financial flexibility and headroom.

Supported by the strong financial position, the Company accessed capital markets through the issuance of perpetual hybrid notes of EUR400 million in principal amount with a coupon payment of 3.75% in Q1 2015 as well as through the issuance of additional EUR400 million 10 year straight bond Series E in April 2015, bearing a coupon payment of 1.5%.
Christian Windfuhr, CEO of Grand City Properties, comments: "We are pleased with the pace the year has started, continuing our remarkable momentum. We are confidently proceeding in 2015, extracting the significant potential from the portfolio and pursuing further attractive deals."
The full Q1 2015 interim report is available on the Company's website: http://grandcityproperties.com/downloads.html 

About the Company:
Grand City Properties is a specialist real estate company focused on investing in and managing turnaround opportunities in the real estate property market in Germany, primarily in densely populated areas. The Company's strategy is to improve its properties through targeted modernisation and intensive tenant management, and then create value by subsequently raising occupancy and rental levels. Further information: www.grandcityproperties.com

Grand City Properties (ISIN: LU0775917882) is a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 24, Avenue Victor Hugo , L 1750 Luxembourg and being registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés Luxembourg) under number B 165560. Since May 2012, Grand City Properties is listed on the Frankfurt Stock Exchange.

Contact: 
Grand City Properties S.A. 
24, Avenue Victor Hugo 
L-1750 Luxemburg 
T: +352 28 77 87 86 
E: [email protected]
www.grandcityproperties.com 

Press Contact: 
Katrin Petersen 
Grand City Properties S.A. 
T: +49 (30) 887088-1128 
E: [email protected] 

Disclaimer:
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA"), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN "INVESTOR") OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH STATEMENTS, EACH OF WHICH CONSTITUTES A FORWARD-LOOKING STATEMENT SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF GRAND CITY PROPERTIES S.A. ACTUAL RESULTS COULD DIFFER MATERIALLY, DEPENDING ON A NUMBER OF FACTORS.


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