The Grounds Real Estate Development AG closes 2019 with group consolidated sales revenues of EUR 13.9 million, a balance sheet total of EUR 32.4 million and a slightly positive group consolidated result.
- The EBIT amounts to EUR 2.0 million (previous year: EUR 11.4 million). Following an improved financial result, The Grounds shows a positive group consolidated result of EUR 54 thousand (previous year: EUR 4.2 million).
- The equity ratio has risen to a solid 37% (previous year: 22.3%).
- The real estate properties portfolio was already significantly expanded in 2020 and rental incomes strengthened. Further purchases are being examined.
- The particular focus for 2020 is on further development of the projects in Magdeburg and Bad Zwischenahn.
Berlin, 15 June 2020 – The Grounds Real Estate Development AG (ISIN: DE000A2GSVV5; hereinafter: “The Grounds”), with group consolidated EUR 13.9 million in the 2019 financial year (previous year: EUR 31.1 million), achieved earnings before interest and taxes (EBIT) of EUR 2.0 million (previous year: EUR 11.4 million) and, after taxes of EUR 54 thousand (previous year: EUR 4.2 million), a slightly positive group consolidated result.
The Grounds concentrated on further development of the real estate properties portfolio in 2019, and was therefore unable to follow up on the previous year’s strong values on the sales revenues and earnings side. EUR 12.9 million (previous year: EUR 30.2 million) was earned through the sale of real estate property projects, chiefly by the sale of a major project in the Frankfurt/Main area. In particular, the sale of a micro-apartments block in Gutleutstrasse, Frankfurt, with sales proceeds of EUR 21.5 million, had contributed to considerable higher sales revenues in the previous year. Moreover, The Grounds received rental incomes amounting to EUR 1.0 million in 2019 (previous year: EUR 1.0 million) from the logistics park portfolio property in Hangelsberg. The Grounds carried out further remediation work focusing on fire protection here in 2019, to improve the state of maintenance and to enable quick increases in rental incomes through additional lettings.
Including other operating income of EUR 1.3 million (previous year: EUR 2.3 million), total group operating performance declined to EUR 14.1 million (previous year: EUR 35.3 million). Total costs decreased, again compared to the previous year. The financial result improved from EUR -2.7 million to EUR -2.0 million.
The equity ratio rose to a solid 37% - the balance sheet picture was characterised by sales transacted in 2019
Development of the major project in Gutleutstrasse, Frankfurt/Main, which took place only in 2019, in conjunction with the sales taking place in 2010, considerably influenced the consolidated balance sheet of The Grounds, and reduced the balance sheet total. Therefore, the group balance sheet total as of the balance sheet date of 31 December 2019 decreased to EUR 32.4 million (previous year: EUR 56.4 million). The major project sold in Frankfurt/Main led to a considerable reduction both in current assets (EUR 21.2 million; previous year: EUR 45.1 million, the high value resulting from service accounting), and in liabilities (EUR 20.4 million; previous year: EUR 43.9 million). No significant new liabilities were incurred in 2019.
Thus the equity ratio was improved further to a solid 37% (previous year: 22.3%).
The Grounds plans levels of sales revenues and earnings in 2020 comparable to those in 2019 – with a particular focus on obtaining planning permission for the existing project developments in Magdeburg and Bad Zwischenahn
The Grounds is focusing on growth in the current financial year 2020. The portfolio of real estate properties was already considerably enlarged by adding a property portfolio of 250 residential and 15 commercial units in May, already almost fully rented, thus approximately doubling annual rental incomes to around EUR 2.0 million. The real estate properties portfolio will already make a lasting contribution to increasing the earning power of The Grounds Group in the fourth quarter of 2020 due to the transfer of rights and obligations scheduled for 30 September. In this case, The Grounds is examining opportunities for densification and for further energy improvement measures that may lead to increased rentals in the long run. Further purchases are planned as the year progresses.
On the sales side, handover of the Leipzig micro-apartments project, which had been sold for EUR 13.35 million in the context of a forward deal in 2018, is scheduled for the end of the year. Beyond that, no major sales are planned in 2020. Due to the current coronavirus pandemic, it is not yet possible to assess with certainty whether the contemplated sales of individual building plots in the urban district planned in Magdeburg will still become effective in generating sales revenues in 2020, since the planning, approval, financing and sales processes in municipalities, banks and investors are also impaired and/or delayed in these cases.
As a result, for 2020, the Management Board assumes a level of sales and earnings at a group level comparable to that in 2019. Further expansion of the portfolio and the continuation of project developments are expected to strengthen the earning power of The Grounds Group.
The Grounds Real Estate Development AG
Arndt Krienen, Thomas Prax, Management Board
Leipziger Platz 3, 10117 Berlin
T. +49 (0) 30 2021 6866
F. +49 (0) 30 2021 6849
Haus der Wirtschaft, Kapstadtring 10
T. +49 (0) 40 6378 5410
F. +49 (0) 40 6378 5423