Aroundtown SA reported flat net rental income of €591 million in the first half of 2026, as higher debt costs offset growth in key segments of its property portfolio.
Like-for-like rental growth reached 2.7% overall, driven by gains of 3.5% in residential assets and 4.4% in hotels, though office assets expanded just 0.9%. Adjusted EBITDA remained broadly stable at €500 million, while Funds From Operations (FFO1) declined 4% year-over-year to €144 million. FFO1 per share rose 3% to €0.13, reflecting share buybacks executed at discounts to intrinsic value.
Net profit fell to €218 million from €578 million in the same period last year, reflecting higher financing expenses. The company maintained liquidity of €3.9 billion and over €1 billion in unused credit lines, with a portfolio valued at €25.2 billion generating €1.16 billion in annualized rental income at a 5.0% yield.
Aroundtown completed €350 million in disposals during the half and signed agreements for an additional €390 million, executing transactions near book value at an average rental multiple of 17x. Acquisitions focused on high-quality residential assets with average yields exceeding 7%. Capital recycling supported conversions of offices into service apartments at yields of around 14% and hotel repositionings at approximately 13%. Green certification now covers 76% of the commercial portfolio.
Shares traded 1.28% lower at $2.008, near the 52-week low of $1.994 and roughly 43% below the prior year’s peak. Management reaffirmed full-year 2026 guidance, targeting FFO1 of €275 million to €305 million and dividends of €0.12 to €0.135 per share, based on a 50% payout ratio.
Looking ahead, Aroundtown flagged potential earnings pressure in 2027 and 2028 as legacy debt matures and refinances at higher rates, with 2029 identified as a potential inflection point. The interest coverage ratio is expected to remain above 3x at year-end 2026, comfortably above bond covenant thresholds.
CEO Barak Bar-Hen highlighted strong tailwinds in residential and hotel segments, which together represent 53% of the portfolio, while CFO Jonas Tintelnot emphasized the accretive impact of capital recycling and share buybacks executed at discounts to intrinsic value.
