Gazit Globe, Citycon (photo Wikipedia, Magma Images, freepik)
Citicon, G City’s subsidiary operating in Northern Europe, has published its results for the third quarter and first nine months of 2022 (“Period”).
According to the report, the NOI from the same properties increased in the quarter by about 3.4% compared to the corresponding quarter last year; The NOI from the same properties increased in the period by about 5.2% compared to the corresponding period last year.
The company also reports that the number of visitors to the same properties increased in the quarter by 4.3% compared to the corresponding quarter last year and in the period increased by 12.1% compared to the corresponding period last year.
Redemptions by tenants in identical properties increased in the quarter by 0.1% compared to the corresponding quarter last year and by approximately 7.9% compared to the corresponding quarter in 2019, pre-Corona. The average rent per square meter increased during the period by about 1.0 euro and stood at 23.6 euro per square meter. The increase is a result of an increase in the index and a positive Leasing Spread in all active countries.
Changes in the consumer price index are calculated at the end of each year, therefore the significant impact of inflation on rental income will be reflected in 2023. About 92% of Citicon’s leases are linked to the price index.
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The commercial occupancy rate was approximately 94.9% as of September 30, 2022, compared to 94.2% as of December 31, 2021; The FFO per share in the quarter excluding the hybrid bond (calculated according to EPRA rules) decreased by approximately 2.8% and amounted to approximately EUR 0.177 per share compared to approximately EUR 0.183 per share in the corresponding quarter last year. The decrease is due to the sale of assets during the period which was offset by a decrease in the number of shares due to own purchase of shares.
The FFO per share in the quarter (calculated according to EPRA rules) decreased by about 6% and amounted to about 0.132 euros per share compared to about 0.140 euros per share in the corresponding quarter last year. The decrease is due to the sale of assets during the period which was offset by a decrease in the number of shares due to the own purchase of shares.
As I recall, the real estate companies – especially those operating abroad – were hit by the recession that followed the increase in interest rates in Israel and the Western world, and have dropped a lot in recent months. So is G City.
Leverage as of September 30, 2022, was approximately 41.7% compared to approximately 40.7% as of December 31, 2021. 95% of Citicon’s financial debt is at a fixed interest rate and is not index-linked.
Citicon’s liquidity balance is approximately 537 million euros. Citicon confirms the FFO per share forecast for 2022 (calculated according to EPRA rules) in the range of approximately 0.68 to 0.72 euros per share, and the Adj. FFO to 0.50 to EUR 0.58 per share, Midpoint of about EUR 0.54 per share.
Improvement of the property portfolio:
– The company sold about 400 million euros of assets starting in 2021.
-In addition, it classified two properties as held for sale in the amount of approximately 125 million euros.
– In the next two years, the company intends to sell assets amounting to approximately 400 million euros (including the two assets classified for sale) where the proceeds from the sales will be used to repay debt.
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