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 Transport

Anand Vihar and Punjabi Bagh Flyovers Ready

Work on two major road infrastructure projects, the Anand Vihar flyover and the Punjabi Bagh flyover, has been completed but are yet to be opened for public use, according to officials. Located in highly congested areas, work on these projects started around two years ago. "The work on the flyover is complete and it is ready for opening," said a PWD official on Wednesday. According to sources, both the flyovers are likely to be inaugurated closer to the assembly elections in Delhi, scheduled for early next year. During the time the work was under way, motorists faced heavy traffic congestion ..

Next Story
Infrastructure Transport

RDSO finalise oscillation trials on Indore Metro

Indore Metro Phase 1 advances with the completion of oscillation and brake performance trials on the Yellow Line through three coaches manufactured by Alstom conducted by Research Design and Standards Organisation (RDSO). The oscillation trials were conducted with an aim to evaluate the stability and performance of the three different coaches during the movement, ensuring that the commencement of operation on Indore metro meets the safety and performance standard. The Emergency Braking Distance (EBD) was also reviewed by the RDSO team to evaluate the efficient stopping of trains during the op..

Next Story
Infrastructure Urban

IIT Guwahati develops sustainable geopolymer

A research team at the Indian Institute of Technology Guwahati, led by Prof. Anil K. Mishra from the Department of Civil Engineering, has developed an innovative solution to two major global challenges: industrial waste management and sustainable construction. Their research focuses on creating a geopolymer using industrial byproducts and waste materials, such as water treatment sludge (WTS), fly ash (FA), and ground granulated blast furnace slag (GGBS). “With the rapid pace of urbanisation and industrialisation, managing industrial waste has become a critical global issue," said IIT Guwaha..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000