By Marleen Kaesebier
(Reuters) -Aroundtown, one of Germany’s largest listed landlords, posted a profit of 309.3 million euros ($333.6 million) for 2024 on Wednesday, in a sign of improvement at a time when Berlin’s borrow-to-spend splurge drives up borrowing costs for embattled property companies.
The profit follows two consecutive years of losses, including that of 2.43 billion euros in 2023, even as the industry continues to struggle with Germany’s worst real estate crisis in decades.
The company said the return to profit was driven by a strong operational performance and stabilized property values. It also continued to strengthen its balance sheet by closing 740 million euros worth of property disposals and repaying 1.3 billion euros of debt.
Its larger peer Vonovia posted a third consecutive annual loss last week.
The Luxembourg-based company posted funds from operations (FFO I), a key metric for real estate firms, of 315.5 million euros for the year. That met its expectations for the number to be at the upper end of a 290 million to 320 million euro range.
It expects the metric to fall to between 280 million to 310 million euros in 2025.
Aroundtown, which owns properties mainly in Germany, the Netherlands and London, also took 360 million euros worth of new bank debt last year.
Shares of real estate firms exposed to the German market were hit earlier in March by the announcement of a debt-driven 500 billion euro infrastructure spending plan, which threatens to saddle the already struggling industry with more expensive refinancing.
However, Jefferies analysts have said this should not have an impact on real estate companies in the short term, as their average debt duration is five years.
Aroundtown said it would make a decision on whether to pay out a dividend for 2024 at its annual shareholder meeting in June.
($1 = 0.9272 euros)
(Reporting by Marleen Kaesebier in Gdansk, editing by Milla Nissi)
