AroundTown - comment

AroundTown’s Q1 results point to further signs of stability in the European real estate market.  AroundTown do not revalue its estate at Q1, but the Company has done some small asset sales at book value.  A recurring theme on the conference call is an expectation of lower ECB rates this year which will further support valuations.  The office market is seeing c.3% LFL rental increases from indexation and rent reversion outpacing the slightly lower occupancy levels.  

AroundTown have €2.9bn of cash plus a further €900m from disposals and vendor loans, coupled with an encouraging capital market, AroundTown have no liquidity concerns.  The focus is starting to shift to a recommencement of dividends (no commitment from the Company) and therefore what is the correct trading levels for a European REIT on a yield basis.