Aroundtown (ETR:AT1) reported full-year 2025 results alongside an update on its proposed voluntary share-for-share tender offer for Grand City Properties (GCP) shares, while also outlining the company’s plans to resume dividends after a three-year pause and continue capital recycling through disposals, reinvestment, and share repurchases.
2025 results: stable rents, higher finance costs, and positive revaluation
Management said 2025 benefited from a more supportive macro backdrop, citing ECB rate cuts, improving inflation dynamics, and improved sentiment across Europe. In Germany, executives pointed to a sizable stimulus package and long-term investment plans as factors contributing to a more constructive environment, which they said was reflected in higher transaction activity and steadier financing markets.
The group’s year-end external valuation resulted in positive like-for-like value growth of 3.1% including CapEx and 1.6% net of CapEx, which management said was mainly driven by operational developments. EPRA NTA per share rose to €7.8, up 5% compared with December 2024.
Reported profit for the year was €1.13 billion versus €309 million in 2024. The CFO said results included a deferred tax income of €459 million, mainly tied to a one-time impact from a change in the German corporate tax rate effective from 2028 (gradually declining from 15% to 10% by 2032). Aroundtown also recorded a €239 million goodwill impairment, which management said had no impact on FFO1 and key operating KPIs.
Portfolio performance: residential and hotels drove growth, offices steady amid vacancy pressure
Management described the portfolio as diversified across asset classes and concentrated in key metropolitan markets. The company said the portfolio is allocated roughly to offices (34%), residential (33%), hotels (20%), logistics/retail (6%), and a development and invest portfolio (7%). Geographically, Germany, the Netherlands, and London together represent 89% of the portfolio, with Berlin the largest single-city exposure at 23%.
By asset type, Aroundtown reported:
- Residential like-for-like rental growth of 3.6%, with vacancy at 3.2%.
- Hotels like-for-like rental growth of 3.5%, supported by repositioning and contractual rent step-ups.
- Offices like-for-like rental growth of 1.8%, supported by indexation, amid continued market headwinds.
The company reported portfolio value of €25 billion and annualized recurring rent of €1.15 billion, implying a 5% rental yield on contractual rents. Management noted that yields do not include future agreed rent ramp-ups, which it said is particularly relevant for hotels; including stabilized rents, the hotel yield was described as 5.5%. The group reported a 7.2-year WALT and EPRA vacancy of 7.6%, slightly higher than 7.5% a year earlier.
On office leasing, executives said demand remains muted, but they cited improving business sentiment and the German fiscal stimulus as factors that could support gradually increasing demand. They also highlighted constrained new supply and an increasing share of assets being converted to alternative uses. The company said it renewed 160,000 square meters of leases at a 5.1-year WALT with rents 3% above prior levels, and signed 140,000 square meters of new leases with a 10-year WALT at rents around 8% above prior rates.
Capital recycling: disposals, acquisitions, and a €250 million share buyback
Aroundtown said it signed €575 million of disposals in 2025 and closed €790 million, at 1% below book value and an average rental multiple of 20x. Management said disposals were concentrated in NRW, Berlin, Frankfurt, Bremen, and non-core locations, and were mainly comprised of office and residential assets with additional sales of development, retail, and hotel properties. The company reported €128 million of disposal gains and €415 million of FFO2.
In addition, Aroundtown said it had €650 million of investment property classified as held for sale. In Q&A, management said the disposals included in 2026 guidance largely reflect assets already classified as held for sale.
For acquisitions, Aroundtown reported €500 million of property additions in 2025 (primarily residential, office, and hotel), including €0.3 billion converted from vendor loans. It also reported that in 2026 to date, it had signed €175 million of residential acquisitions in London and Germany. The company said €350 million of acquisitions were completed through the TAC fund, which management described as a vehicle to raise external equity for acquisitions without issuing new Aroundtown shares at a discount to NAV.
In February 2026, the company launched a €250 million share buyback program. Management said that if fully executed at prevailing prices, the program is expected to increase FFO1 per share by around 7% and NAV per share by approximately 5%. In prepared remarks and Q&A, management said execution is constrained by daily buyback limits and could run through year-end, with the full per-share benefit expected to be more visible in 2027.
Balance sheet, funding markets, and dividend resumption
Management emphasized liquidity and market access, noting €4.0 billion of liquidity plus €0.9 billion of undrawn credit lines. S&P affirmed the company’s BBB rating in December 2025. Aroundtown said it continued to extend maturities, reporting an average debt maturity of 3.7 years, or 4.6 years when factoring in liquidity. The hedging ratio was 97%, and cost of debt stood at 2.3%, with management expecting a modest increase over the next years as lower-cost debt is refinanced.
In capital markets activity, the company highlighted a decline in bond coupons during 2025 compared with mid-2024 benchmarks (including a 5-year bond at 4.8% in July 2024 versus 3.5% in May 2025 and 3.25% in September 2025). Aroundtown also cited diversification into non-euro funding, including CHF and GBP bonds in late 2025, and additional CHF and Australian dollar issuance in early 2026. It said it raised €3.3 billion of new debt in 2025 and repaid €2.6 billion.
After three years without a payout, Aroundtown said it will propose a €0.08 per share dividend for 2025, based on a payout ratio of around 30% of FFO1 and subject to shareholder approval at the AGM. The company also updated its dividend policy, stating that from 2026 onward it targets a payout ratio of 50% of FFO1 per share (revised from a previous 75% level discussed in Q&A).
2026 guidance and the proposed GCP share-for-share offer
For 2026, Aroundtown guided to FFO1 of €250 million to €280 million, or €0.24 to €0.27 per share. Management said the guidance reflects the full-year impact of 2025 disposals and expected 2026 disposals, as well as refinancing above the current cost of debt. Offsetting factors cited included rent increases (the company expects 2%–3% like-for-like rental growth in 2026), contributions from acquisitions already closed or signed, cost efficiency measures, and a net positive impact from perpetual note transactions.
Separately, the company presented its proposed voluntary tender offer to increase its stake in GCP through a share-for-share exchange using treasury shares. Management said the offer covers up to 89.5% of GCP shares, with no minimum acceptance threshold and no conditionality, and that GCP’s board had signaled an intention to recommend acceptance pending review of the offer document. Executives said GCP shareholders would receive a 6.6% premium versus the prior day’s share price and gain exposure to a larger, more liquid equity platform, and noted tendered shares would be eligible for Aroundtown’s proposed 2025 dividend.
For Aroundtown, management said increasing ownership would reduce minority leakage and increase exposure to what it described as a resilient German and London residential portfolio. The company stated the transaction could provide up to nearly €50 million of additional group FFO on day one post-transaction, while being neutral on a per-share basis initially. Executives also said EPRA LTV would improve slightly due to the larger portion in GCP’s lower leverage profile and because the transaction uses equity rather than cash, while noting NTA per share could decline slightly because the offer implies a premium to GCP’s NTA.
About Aroundtown (ETR:AT1)
Aroundtown SA, together with its subsidiaries, operates as a real estate company in Germany, the Netherlands, and London. The company invests in commercial and residential real estate properties. It also engages in hotel, office, and shopping related activities. The company was incorporated in 2004 and is based in Luxembourg, Luxembourg.
