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Aroundtown (ARNDTN; NR, BBB+ Neg) {AT1 GY Equity}

REAL ESTATE

Nothing of alarm for us in equity analyst takes on earnings. Short-end (pref. July 26s) screened attractive on reported liquidity of €3.9b. The voluntary exchange offer for perp holders was slight negative on that view but results released yesterday only saw €136m in cash tenders. ARNDTN lines have been unphased over the +10bp move in bunds yesterday.

  • DB: Better than expected but still sees elevated leverage, declining earnings on expensive financing & disposals getting tougher on office vacancy that is rising. Accepts liquidity stable on dividend cut.
  • JP: Robust operating performance pointing to rental growth & sees FFO decline primarily due to higher interest cost & perp resets. Sees office benefiting from strong indexation driven rental growth & on vacancy notes company did flag tenants delaying space extension and some have reduced space though it sees low supply rates (-27%yoy) due to high construction costs supporting market (similar to existing residential market dynamics).

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