Luxembourg-based property company, Grand City Properties, has revised its guidance for 2023 following an increase in rental income. However, the company also reported a net loss for the second quarter, primarily driven by a devaluation of its property portfolio due to higher interest rates.
Revised Guidance for 2023
Grand City Properties now expects its funds from operations I, a key metric used to track real estate companies' bottom-line performance, to range from €175 million to €185 million this year. This is an increase from its previous expectations of €170 million to €180 million.
Net Loss in Q2
For the second quarter, the company posted a net loss of €332.6 million, compared to a profit of €169.7 million in the same period last year. The net loss can be attributed to a devaluation of the company's property portfolio, resulting in a 5.4% valuation cut on a like-for-like basis. This led to a loss of €485.8 million.
Strong Revenue Growth
Despite the net loss, Grand City Properties experienced strong revenue growth in the second quarter. The company's quarterly revenue increased to €159.3 million, up from €138.6 million in the previous year.
Decline in Funds from Operations I for H1
While the second quarter results were unfavorable, Grand City Properties saw a decline in funds from operations I for the first half of the year as a whole. The metric fell to €94.0 million from €97.2 million. However, net rental income rose by 5% to reach €204.4 million.