Grand City Properties S.A. Maintains Strong Outlook Amid Market Challenges

First Berlin Equity Research GmbH has recently published an update on Grand City Properties S.A. (GCP), reaffirming its BUY recommendation. Despite reducing the target price slightly from EUR 12.60 to EUR 12.50, analyst Ellis Acklin highlights GCP's potential to continue its positive performance into the coming year. The research emphasizes a notable like-for-like (LFL) rental growth of 3.3% in 2023, buoyed by high occupancy rates in the German residential market and a steady guidance of around 3% for key performance indicators (KPI).

The persistently high interest rates, however, remain a challenge, affecting refinancing options and property transactions. Additionally, the cost of financing and perpetual note attribution have impacted the Funds From Operations (FFO) 1 negatively, by 10% in the fourth quarter. Despite these hurdles, GCP's strong liquidity position, with cash and liquid assets amounting to €1.2 billion covering debt maturities until the end of 2026, positions the company well to navigate the ongoing uncertainties in the real estate market.