Aroundtown - comment

S&P have downgraded AroundTown’s rating to BBB from BBB+ negative outlook due to a weakening German economy, which S&P believes will impact AroundTown’s disposal program and deleveraging. We are a little surprised by this as AroundTown has deleveraged since Covid, all the while maintaining its rating during this period. The downgrade is primarily driven by wider economic activity, with S&P highlighting concerns on Occupancy rates and potential further devaluation of its asset base. The latter stands in contrast to the recent write-up at Adler but is explained by Adler’s concentration purely on Berlin, whereas, Aroundtown has much wider exposure and also to different real estate classes.