This article first appeared on GuruFocus .
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Rental Growth:3.5% on a like-for-like basis.
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Vacancy Rate:3.6%.
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Adjusted EBITDA:EUR86 million, a growth of 1% year over year.
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FFO I:EUR46 million, compared to EUR48 million in Q1 2025.
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LTV Ratio:32% as of March 2026.
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Net Profit:EUR42 million, with earnings per share of EUR0.17.
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EPRA NTA:EUR4.5 billion or EUR25.70 per share.
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Net Rental Income:EUR109 million, a 2% increase.
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Finance Expenses:Increased by EUR2 million.
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Liquidity Position:EUR1.6 billion as of March 2026.
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Dividend Proposal:EUR0.30 per share for the year 2025.
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In-Place Rent:EUR9.8 per square meter as of March 2026.
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Portfolio Value:EUR9 billion with approximately 60,000 units.
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Cost of Debt:2.1% with an average debt maturity of four years.
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FFO I Guidance for 2026:EUR175 million to EUR185 million.
Release Date: May 12, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Grand City Properties SA ( GRNNF ) reported solid rental growth of 3.5% on a like-for-like basis, with vacancy rates remaining low at 3.6%.
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The company maintained a strong liquidity position with EUR1.6 billion in cash and liquid assets as of March 2026.
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A new perpetual notes issuance and tender offer were successfully concluded, strengthening the financial profile with next call dates only in 2031.
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The company proposed a dividend payment of $0.30 per share for 2025, reflecting a 3.2% dividend yield, and updated its dividend policy to 50% of FFO I per share.
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Grand City Properties SA ( GRNNF ) has a low leverage with an LTV ratio of 32%, providing flexibility for future growth opportunities.
Negative Points
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Net profit for Q1 2026 decreased to EUR42 million from EUR88 million in the previous year, primarily due to the absence of revaluation gains.
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FFO I decreased slightly to EUR46 million from EUR48 million in Q1 2025, impacted by higher finance expenses.
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The company did not conduct a portfolio evaluation in Q1 2026, which may affect transparency regarding current asset valuations.
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Finance expenses increased by EUR2 million due to new debt raised in 2025 and higher bank financing costs.
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AFFO for the period was EUR27 million, lower than the EUR29 million recorded in Q1 2025, due to lower FFO I and higher repositioning CapEx.
Q & A Highlights
Q: What is your view on the geopolitical events and the impact on GCP? A: Christian Windfuhr, Executive Chairman of the Board, stated that while geopolitical developments create market volatility, the potential negative impact is currently manageable. The company's portfolio benefits from strong fundamentals, and they have a solid financial position with EUR1.6 billion in cash and liquid assets, which covers debt maturities in 2026 and 2027. Additionally, 95% of their debt is hedged, limiting negative impacts from volatility.
Q: How do you currently assess the impact of the proposed tenant law changes on your operations and rental growth outlook? A: Christian Windfuhr explained that the regulatory environment is broadly supportive of their long-term framework, and they do not expect material impacts from proposed tenant law changes. The potential cap on index trends is not significant due to the limited share of indexed leases in their portfolio. Discussions on expropriation and rent caps in Berlin are seen as populistic, with supply being the main solution.
Q: How are you positioning the acquisitions and disposal strategy in the current market environment? A: Refael Zamir, CEO, stated that external growth focuses on disciplined capital recycling and selective acquisitions. In Germany, opportunities are limited, but they expect the pipeline to improve. In London, the opportunity set is more attractive due to shorter financial maturities, creating entry points in high-quality assets. They remain well-positioned to act quickly when opportunities arise.
Q: How do you assess valuation prospects for the coming reporting period? A: Idan Hadad, CFO, mentioned that the next portfolio valuation is scheduled for H1 2026. Market conditions are stable, with value development expected to be driven by organic operating performance. While yield changes cannot be excluded, potential yield expansion is expected to be gradual and offset by operational growth.
Q: Have you seen changes in your financing conditions in recent months? A: Michael Bar-Yosef, Chief Capital Markets Officer, noted that access to capital markets remains strong, with stable bond spreads and secure bank financing conditions. They have no near-term refinancing needs, and their liquidity position covers bond maturities for the current and next year. They remain open to issuing debt if conditions are favorable.
Q: Could you provide some more detail on your dividend decision? A: Refael Zamir explained that the company improved its financial position, allowing for a proposed dividend payout of $0.30 per share. The updated dividend policy to 50% of FFO I per share balances shareholder distribution with cash preservation for growth initiatives, maintaining a strong balance sheet.
Q: Your LTV is materially below the Board of Directors' limit of 45%. Do you see any merit in changing that to lower levels? A: Michael Bar-Yosef stated that while the LTV is at 32%, well below the 45% limit, they are happy to maintain a prudent and conservative LTV around the current level.
Q: Do you expect to run around the current cash balance and refinance upcoming EUR1 billion of bond maturities through new bond issuance? A: Michael Bar-Yosef confirmed that the strategy remains to use the current cash for upcoming maturities, with potential new issuance as part of liability management for future bonds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
