Arountown - comment

AroundTown released its FY24 accounts, demonstrating continued European real estate market improvement. AroundTown continues to see like-for-like rental growth, albeit Net Rental Income being 1% lower due to disposals.  Headline property valuations are falling -0.5% for FY24, although this is mainly due to the negative H1 movement masking the positive H2 revaluation across all segments including offices. Ratings remain at BBB+ with a negative outlook, and the company expects further disposals in FY25 to remove the negative outlook.  We are a little surprised that management aren’t guiding to higher CAPEX going forward, instead remaining cautious due to rating concerns.  

Separately, as part of the FY24 release, AroundTown confirmed it has set up a real estate fund where AroundTown will be the General Partner of the fund. AroundTown aims to be a minority holder in the fund, through which it will co-invest alongside other investors, driving external growth while still enabling the Company to deleverage.