German real estate investment group Aroundtown SA reported flat year-over-year net rental income of €591 million in the first half of 2026, as rising debt costs offset steady portfolio performance.
The company’s like-for-like rental growth reached 2.7% across its €25.2 billion property portfolio, driven by a 3.5% increase in residential rents and a 4.4% rise in hotel revenues, while office rents grew 0.9%. Adjusted EBITDA remained essentially unchanged at €500 million, though funds from operations I (FFO I) declined 4% to €144 million. Net profit fell to €218 million from €578 million a year earlier, as finance expenses rose 26% to €142.3 million.
Aroundtown’s EPRA net tangible assets increased 6% to €9.1 billion, or €8.0 per share, translating to approximately $8.80 at current exchange rates. The company’s share price slipped 1.28% to $2.008, nearing its 52-week low of $1.994.
Debt costs climbed as the average interest rate on its €3.9 billion in liquidity rose to 2.4%, while the loan-to-value ratio increased to 43% from 41% at year-end 2025. Aroundtown’s interest coverage ratio declined to 3.3 times, below the 3.9 times recorded in 2025 but still above its bond covenant threshold of 1.8 times. The company’s hedging ratio stood at 95%, with 92% of debt fixed or swapped.
Management highlighted €350 million in asset disposals completed in H1 2026 at near book value, with an additional €390 million in sales signed and pending. The firm also executed share buybacks at an average price of €2.54 per share, a 67% discount to its EPRA net asset value per share. Portfolio yield targets included selective acquisitions above 7%, office conversions at 14%, and hotel repositionings at 13%.
Aroundtown maintained its full-year 2026 guidance, projecting FFO I of €275–305 million and a dividend per share of €0.12–€0.135, based on a 50% payout ratio. The company’s credit rating remains at S&P’s BBB with a stable outlook.
The group’s portfolio is 89% concentrated in Germany, the Netherlands, and London, with Berlin accounting for 23% of assets. Residential properties, which make up 33% of the portfolio, reported a 3.3% vacancy rate and 4.9% yield, while offices—34% of assets—had a 13.6% vacancy rate and 5.0% yield. Hotels, comprising 20% of the portfolio, showed a 2.2% vacancy rate and 4.9% yield.
Looking ahead, Aroundtown targets €165 million in incremental annual rental income over the next three to four years, including €100 million from like-for-like growth, €55 million from conversion and repositioning projects by 2030, and €10 million from an increased stake in Grand City Properties.
ESG achievements included a 41% reduction in carbon emissions versus 2019, surpassing its 40% target four years early. The company also secured a 9th consecutive EPRA BPR Gold award and upgraded its MSCI ESG rating to AAA.
