Grand City Properties S.A. announces 9M 2017 results: operational improvement translates into value creation

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS OR REGULATIONS

GRAND CITY PROPERTIES S.A. ANNOUNCES 9M 2017 RESULTS: OPERATIONAL IMPROVEMENT TRANSLATES INTO VALUE CREATION

- Rental and operating income increased to EUR366 million, up 14% YOY from EUR320 million

- Adjusted EBITDA of EUR183 million from EUR165 million in 9m 2016

- FFO I increased to EUR130 million, increasing 11% YOY

- FFO I per share increased 8% YOY to EUR0.83 which translates to EUR1.11 on an annualized level, reflecting a yield of 6%

- EPRA NAV incl. perpetual notes of EUR3.7 billion, increased by 16% since year-end 2016; EUR22.6 per share, up from EUR20.7 per share

- EPRA NAV of EUR3.1 billion, up by 21% from EUR2.5 billion at year-end 2016; EUR18.6 per share, increased from EUR16.4 per share

- Net profit of EUR404 million; earnings per share of EUR2.13

- Investment properties increased by over EUR1 billion since year-end 2016 to EUR5.8 billion, an increase of 21%

- Equity of EUR3.6 billion, up by 17% since year-end 2016; equity ratio of 50% maintained

- Low LTV of 37% with average cost of debt maintained low at 1.5% and maturity schedule extended to 7.5 years

- Consistently high credit metrics with ICR of 6.1x and DSCR of 4.8x in 9M 2017

- Strong credit position reflected in the recent credit rating upgrade to Baa1 by Moody's

- Like-for-like net rental income increase of 3.8% as of September 2017, with 1.5% from occupancy growth and 2.3% from in-place rents growth

Luxembourg, November 17, 2017 - Grand City Properties S.A. (the 'Company', 'GCP') continues to deliver strong operational performance with its financial results for the first nine months of 2017, maintaining the strong momentum from the first half of the year. FFO I for the period increased by 11% to EUR130 million, with the resulting annualized FFO I per share of EUR1.11 reflective of FFO yield of 6.0% and an attractive dividend yield of 3.9% based on the payout ratio of 65%. The EPRA NAV including perpetual notes increased by 16% since year-end 2016 to EUR3.7 billion, equal to EUR22.6 per share, as GCP continues to translate its proven business model into increasing shareholder value.

The Company's strong credit position, owing to its conservative capital structure and financial policy, was further solidified in September 2017 with Moody's upgrading GCP's long-term issuer rating to Baa1, one notch away from the target set by the Company for the long term.

MDAX inclusion and sustainability achievements solidifying the Company's position among industry leaders
Grand City Properties was included in the mid-cap MDAX index of the Deutsche Börse in September 2017, only a quarter following its initial inclusion in the SDAX in June 2017, placing GCP among the largest Frankfurt-listed companies, providing for further visibility in capital markets and access to a larger investor base, and representing a key milestone in the Company's successful history.

Sustainalytics ranked in November GCP in the 91^st percentile among over 300 global peers for its ESG efforts, also noting the Company as an Outperformer.
In tandem with the continued success on the operational front, GCP continues to make strides in terms of ESG and its sustainability footprint. These efforts were recognized by EPRA in September 2017 with the EPRA BPR Gold and Most Improved Company awards, sBPR Gold and Most Improved Company awards, and 1^st place for Outstanding Contribution to Society.

Christian Windfuhr, CEO of Grand City Properties: 'The first nine months of 2017 proved to be a period of exciting developments for GCP with continuously strong financial results and a host of milestones and achievements recorded, the most recent of which being the MDAX inclusion, rating upgrade to Baa1 by Moody's, EPRA awards and an impressive Sustainalytics score. These are targets we have strategically set to achieve, and I would like to thank the entire team at Grand City Properties for their hard work in contributing to these successes. We are now making the final push as we look to close out the year strongly and look forward to another fruitful year in 2018.'

The full 9M 2017 report is available on the Company's website:
http://grandcityproperties.com/en/downloads.html

About the Company:
Grand City Properties is a specialist in residential real estate, value-add opportunities in densely populated areas in Germany. The Company's strategy is to improve its properties through targeted modernization and intensive tenant management, and then create value by subsequently raising occupancy and rental levels. Further information: www.grandcityproperties.com

Grand City Properties (ISIN: LU0775917882) is a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 1, Avenue du Bois, L 1251 Luxembourg and being registered with the Luxembourg trade and companies register (Registre de Commerce et des Sociétés Luxembourg) under number B 165 560. Since May 2012, Grand City Properties is listed on the Frankfurt Stock Exchange.

Contact:

Grand City Properties S.A.

1, Avenue du Bois

L-1251 Luxembourg

T: +352 28 77 87 86
E: info@grandcity.lu

www.grandcityproperties.com

Press Contact:

Katrin Petersen

Grand City Properties S.A.

T: +49 (30) 374-381 5218
E: katrin.petersen@grandcity.lu

Disclaimer:


THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES.

THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE 'SECURITIES ACT'), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED IN THE UNITED KINGDOM TO (I) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'ORDER'), (II) HIGH NET WORTH ENTITIES, AND OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED FALLING WITHIN ARTICLE 49 OF THE ORDER, AND (III) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS'). THIS COMMUNICATION MUST NOT BE READ, ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ('EEA'), THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS DIRECTED ONLY AT PERSONS WHO ARE 'QUALIFIED INVESTORS' WITHIN THE MEANING OF ARTICLE 2(1)(E) OF DIRECTIVE 2003/71/EC, AS AMENDED (THE 'PROSPECTUS DIRECTIVE') ('QUALIFIED INVESTORS'). ANY PERSON IN THE EEA WHO ACQUIRES THE SECURITIES IN ANY OFFER (AN 'INVESTOR') OR TO WHOM ANY OFFER OF THE SECURITIES IS MADE WILL BE DEEMED TO HAVE REPRESENTED AND AGREED THAT IT IS A QUALIFIED INVESTOR. ANY INVESTOR WILL ALSO BE DEEMED TO HAVE REPRESENTED AND AGREED THAT ANY SECURITIES ACQUIRED BY IT IN THE OFFER HAVE NOT BEEN ACQUIRED ON BEHALF OF PERSONS IN THE EEA OTHER THAN QUALIFIED INVESTORS, NOR HAVE THE SECURITIES BEEN ACQUIRED WITH A VIEW TO THEIR OFFER OR RESALE IN THE EEA TO PERSONS WHERE THIS WOULD RESULT IN A REQUIREMENT FOR PUBLICATION BY THE COMPANY OR ANY OF THE MANAGERS OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE.

THIS ANNOUNCEMENT MAY CONTAIN PROJECTIONS OR ESTIMATES RELATING TO PLANS AND OBJECTIVES RELATING TO OUR FUTURE OPERATIONS, PRODUCTS, OR SERVICES, FUTURE FINANCIAL RESULTS, OR ASSUMPTIONS UNDERLYING OR RELATING TO ANY SUCH STATEMENTS, EACH OF WHICH CONSTITUTES A FORWARD-LOOKING STATEMENT SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF GRAND CITY PROPERTIES S.A. ACTUAL RESULTS COULD DIFFER MATERIALLY, DEPENDING ON A NUMBER OF FACTORS.