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Aroundtown SA reported a sharp decline in first-quarter profit as the absence of property revaluation gains and rising finance costs weighed on earnings. The company’s net profit fell by more than 50% year-on-year to EUR 118.9 million, even as German commercial property prices continued to recover after a prolonged downturn. Aroundtown’s funds from operations (FFO I), a key earnings metric for property firms, also declined due to higher borrowing costs. However, the company maintained its full-year guidance, indicating that operational performance remained within expectations despite ongoing market and geopolitical uncertainties.
Aroundtown SA, one of Germany’s largest listed landlords, reported lower earnings and operating income for the first quarter as higher finance costs and the absence of property revaluation gains impacted performance. Advertisement
The Luxembourg-based property company posted a net profit of EUR 118.9 million during the quarter, marking a decline of more than 50% compared to the same period last year. The company attributed the drop largely to the absence of property revaluation gains that had supported earnings in the corresponding quarter of 2025.
The weaker earnings came even as Germany’s commercial property market continued to show signs of recovery after several years of pressure caused by higher interest rates, lower asset valuations and cautious investor sentiment.
Data released earlier this month by German banking association VDP and the Bundesbank showed that German property prices rose 2.1% in the first quarter. The upward movement continued a gradual recovery trend that has been visible since mid-2024.
However, VDP cautioned that the latest figures may not yet fully reflect the impact of ongoing geopolitical tensions and conflict in the Middle East on the real estate market. The association indicated that the effect of global uncertainty on investment activity and financing conditions could become clearer in the coming quarters.
Aroundtown also reported funds from operations, or FFO I, of EUR 70 million for the quarter, down 8% from EUR 76 million a year earlier. The decline was mainly linked to higher finance expenses as elevated borrowing costs continued to pressure real estate companies across Europe.
FFO I is widely used in the real estate sector to measure recurring operating performance by excluding property valuation movements and other one-time items.
The company had indicated in April that it expects FFO I for full-year 2026 to range between EUR 275 million and EUR 305 million. Despite the softer first-quarter performance, the latest results remained within the company’s previously announced guidance range.
Germany’s property sector has been gradually stabilising over the past year after facing one of its most difficult periods in decades, triggered by rapidly rising interest rates, tighter financing conditions and declining property valuations. Large landlords including Aroundtown have focused on cost management, debt reduction and portfolio optimisation as the market adjusts to the higher-rate environment.
Source Reuters
5th Jun, 2025
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