German real estate investment group Aroundtown SA reported flat net rental income of €591 million in the first half of 2026, as rising debt costs weighed on profitability despite steady portfolio growth.
The company’s adjusted EBITDA remained broadly stable at €500 million compared with €501 million in the same period a year earlier, while funds from operations (FFO I) fell 4% to €144 million. On a per-share basis, FFO I improved 3% to €0.13 from €0.12, reflecting a 6% increase in EPRA net tangible assets to €9.1 billion, or approximately €8.0 per share.
Net profit declined sharply to €218 million from €578 million, driven by a 26% rise in finance expenses to €142.3 million. The average cost of debt increased to 2.4%, contributing to a decline in the interest coverage ratio to 3.3 times from 3.9 times in 2025, though still above the bond covenant threshold of 1.8 times. The group’s loan-to-value ratio rose to 43% from 41% at year-end 2025, approaching its internal guidance of 45%.
Like-for-like rental growth reached 2.7% across the portfolio, with residential rents up 3.5%, hotels 4.4%, and offices 0.9%. The total portfolio value stood at €25.2 billion as of June 30, with 89% of assets concentrated in Germany, the Netherlands, and London. Offices accounted for 34% of the portfolio by value, residential 33%, and hotels 20%. Vacancy rates remained low at 13.6% for offices, 3.3% for residential, and 2.2% for hotels.
Aroundtown completed €350 million in asset disposals at essentially book value in the first half and has €390 million in pending sales. The company highlighted selective acquisitions yielding over 7%, office conversions at 14% yields, and hotel repositionings at 13% yields as key drivers for future growth. Management projects an additional €165 million in annual rental income over the next three to four years, including €55 million from conversion and repositioning projects by 2030.
The group maintained strong liquidity of €3.9 billion, including €1.0 billion in undrawn revolving credit facilities, with an average debt maturity of 3.4 years. Credit ratings remained stable at S&P’s BBB with a stable outlook. Shares fell 1.28% to $2.008 following the presentation, near the 52-week low of $1.994 and approximately 43% below the 52-week high.
Aroundtown also reported progress on its environmental targets, reducing carbon emissions by 41% from the 2019 baseline—exceeding its 2030 goal—and installing over 15 MW of solar capacity and 1,000 EV charging points across its portfolio. The company secured its ninth consecutive EPRA BPR Gold award and eighth EPRA sBPR Gold award, alongside MSCI’s AAA rating and a Sustainalytics score of 8.7.
For the full year 2026, Aroundtown guided FFO I to €275–305 million, or €0.24–€0.27 per share, with a dividend per share target of €0.12–€0.135 based on a 50% payout ratio.
