2024
Corinthia / Athens
Consolidated
Annual Report
For the year ended December 31
AROUNDTOWN
S A
Paris
BOARD OF DIRECTORS´ REPORT
CONSOLIDATED FINANCIAL STATEMENTS
THE BUSINESS & OPERATIONS
Key Financials
4
Aroundtown
6
Key Achievements
8
Letter from the CEO
12
The Strategy and Business Model
16
Key Strengths
20
Aroundtown’s Quality Portfolio
24
Capital Markets
37
CONSOLIDATED SUSTAINABILITY STATEMENT
General Information
49
ESRS 2 General Disclosures
49
Environmental Information
77
ESRS E1 - Climate Change
77
EU Taxonomy Disclosures
82
ESRS E2 - Pollution
110
Social Information
113
ESRS S1 - Own Workforce
113
ESRS S2 - Workers in the Value Chain
128
ESRS S4 - Consumers and End-Users
135
Governance Information
145
ESRS G1 - Business Conduct
145
Appendix
153
INDEPENDENT LIMITED ASSURANCE
REPORT (INDEPENDENT AUDITOR)
156
MANAGEMENT DISCUSSION AND ANALYSIS
Notes on Business Performance
160
EPRA Performance Measures
178
Alternative Performance Measures
188
Responsibility Statement & Disclaimer
197
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of profit or loss
200
Consolidated statement of other comprehensive income
201
Consolidated statement of financial position
202
Consolidated statement of changes in equity
204
Consolidated statement of cash flows
206
Notes to the consolidated financial statements
208
AUDITOR’S REPORT
Report of the Réviseur d’Entreprises Agréé
281
CONTENT
Berlin
01
Board Of
Directors´Report
Key Financials
in € millions unless otherwise indicated
1–12/2024
Change
1–12/2023
Revenue
1,542.3
(4%)
1,602.8
Net rental income
1,180.9
(1%)
1,192.8
Adjusted EBITDA
1)
1,014.4
1%
1,002.9
FFO I
1)
315.5
(5%)
332.0
FFO I per share (in €)
1)
0.29
(3%)
0.30
FFO II
393.1
(12%)
449.1
ICR
4.0x
(0.2x)
4.2x
Profit / (loss) for the year
309.3
-
(2,426.4)
Basic earnings / (loss) per share (in €)
0.05
-
(1.82)
1) including AT's share in companies which AT has significant influence, excluding the contributions from assets held for sale
in € millions unless otherwise indicated
Dec 2024
Dec 2023
Total Assets
33,619.9
33,559.3
Total Equity
15,009.7
15,149.7
Investment property
24,375.3
24,632.4
Investment property of assets held for sale
691.8
408.3
Cash and liquid assets
(including those under held for sale)
3,642.1
3,026.1
Total financial debt
(including those under held for sale)
14,512.0
14,242.1
Unencumbered assets ratio
(by rent)
71%
74%
Equity Ratio
45%
45%
Loan-to-Value
42%
43%
Financial Position Highlights
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(*)
according to the updated EPRA methodology. For more details, refer to the EPRA Performance Measures section of the report, 2023 figures adjusted accordingly
(**)
including acquisitions and capex, for more details see the EPRA Performance Measures section of this report
EPRA Performance measures
In € millions unless otherwise indicated
2024
Change
2023
EPRA NRV
10,032.3
1%
9,920.8
EPRA NRV per share (in €)
9.1
-
9.1
EPRA NTA
8,165.4
1%
8,058.7
EPRA NTA per share (in €)
7.4
-
7.4
EPRA NDV
6,772.7
(11%)
7,592.1
EPRA NDV per share (in €)
6.2
(10%)
6.9
EPRA Earnings
(*)
272.1
(9%)
298.4
EPRA Earnings per share
(*)
(in €)
0.25
(7%)
0.27
EPRA Earnings (excl. perp)
(*)
459.8
5%
438.8
EPRA Earnings (excl. perp) per share
(*)
(in €)
0.42
5%
0.40
EPRA LTV
59.6%
(1.2%)
60.8%
EPRA LTV (including RETT)
55.7%
(1.3%)
57.0%
EPRA Net initial yield (NIY)
4.0%
-
4.0%
EPRA 'Topped-up' NIY
4.1%
-
4.1%
EPRA Vacancy
7.5%
(0.4%)
7.9%
EPRA Vacancy including JV
7.9%
(0.2%)
8.1%
EPRA Cost Ratio (including direct vacancy costs)
20.2%
(2.8%)
23.0%
EPRA Cost Ratio (excluding direct vacancy costs)
18.0%
(2.8%)
20.8%
EPRA Capital Expenditure
(**)
766.9
40%
546.1
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The Board of Directors of Aroundtown SA and its
investees (the “Company”, “Aroundtown”, “AT”, or the
“Group”), hereby submits the consolidated annual report
as of December 31, 2024. The figures presented are
based on the consolidated financial statements as of
December 31, 2024, unless stated otherwise.
Aroundtown SA is a real estate company with a focus
on income generating quality properties with value-add
potential in central locations in top tier European cities
primarily in Germany, the Netherlands and London.
Aroundtown invests in commercial and residential real
estate which benefits from strong fundamentals and
growth prospects. Aroundtown invests in residential
real estate primarily through its subsidiary Grand City
Properties S.A. (“GCP”), a publicly traded real estate
company that focuses predominantly on the German
residential real estate market, as well as on the London
residential real estate market. As of December 31, 2024,
the Group’s holding in GCP is 62%.
The Group’s unique business model and experienced
management team led the Group to grow since 2004,
navigating successfully through all economic cycles.
Aroundtown
The Group
Quality assets with a focus on large
EU cities primarily in Germany,
Netherlands, and in London
Attractive acquisitions below market
prices and below replacement costs
Asset repositioning, increasing cash
flow, quality, WALTs and value
Capital recycling by selling non-core/
mature assets
Income generating portfolio
with value-add potential
Extracting new building/conversion
rights on existing and new land &
buildings
Healthy capital structure with a
strong & conservative financial profile
Centrally located
portfolio in
top tier cities
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Frankfurt HBF & CBD
lettable space in Frankfurt
prime centers, main central train
station and banking district
Banking District
Frankfurt Hauptbahnhof
(Central Train Station)
Frankfurt Stadtmitte
Bleichstraße
9k sqm
Intercontinental Frankfurt
Wilhelm-Leuschner Stra
ße
28k sqm
Frankfurt HBF
Stuttgarter Straße
9k sqm
Frankfurt Office Campus
Gutleutstraße
88k sqm
Frankfurt
Büro Center (FBC)
Mainzer Landstraße
43k sqm
Frankfurt HBF
Hafenstraße
20k sqm
View from Hafenstr. Office Tower
Approx.
200,000 SQM
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01
02
03
04
Ì
Continuously strong operational performance
Residential
●
Strong fundamentals drive solid like-for-like rental growth and low vacancy
Hotels
●
Recovered in 2024, reaching pre-pandemic levels
●
Additional upside potential to capture from repositionings
Offices
●
Continued like-for-like rental growth
Ì
Successful return to capital markets and extending
the debt maturity profile
●
€2.6 billion in perpetual notes issuances
○
Successful exchange on perpetual notes with a high acceptance rate of ca. 85%
○
€300 million nominal reduction in the perpetual notes balance
●
€1.15 billion in senior unsecured bond issuances
○
Receiving strong investor demand with the book ca. 7 times oversubscribed
○
Proceeds used for €740 million of bond buybacks and €445 million of bond redemptions
Ì
Valuations recovery started
●
€471 million positive revaluation recorded in H2 2024
●
Slightly negative like-for-like revaluation for the year 2024 of -0.5%
●
Values supported by robust operational growth
●
Improving transaction market, further supporting values
Ì
Further deleveraging through disposals
●
€935 million disposals signed and €740 million disposals closed during 2024, at around book values
●
Proving AT’s ability to sell throughout the whole market cycle
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ATworld launched, to transform the office and
hotel portfolio into a connected network of space
●
Increasing flexibility, providing additional possibilities for tenants to attract and
maintain the best talent regardless of their location
●
Unlocking new sources of revenues across hundreds of locations in Europe, all
managed through a mobile application
●
Adapting to the current needs and continuing to innovate and provide the best
experience in real estate
ATechX, our PropTech accelerator
●
Together with FifthWall, noa, and Round Hill Capital, prominent global Proptech
VCs & RE Investors
●
Scaling promising startups, providing them with the ability to expand their
solutions, offering a wide range of resources and a network of experienced
professionals to propel their growth
●
Opening new sources of risk-mitigated investment opportunities
01
02
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ESG: Continuous progress on Green Certifications
Starting with offices in 2020, we steadily increased the percentage
of green certifications and started certifying the hotel portfolio in 2024
2%
in the office portfolio
Initial analysis and first certifications obtained
8%
in the office portfolio
Pilot project launched successfully in the Netherlands
15%
in the office portfolio
Expanding the knowledge obtained across the portfolio
36%
in the office portfolio
Accelerating certifications, with 100% of Dutch offices
certified and starting with the German office portfolio
65%
in the office portfolio
30%
in the hotel portfolio
2020
2021
Leveraging
and deepening
the developed
capabilities, striving
for further progress
in 2025 and beyond
2022
2023
current
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Progress on ESG:
Social, Governance, Awards & Indices
M
2023
INCLUSION IN INDICES
●
Included in the MDAX and MDAX ESG+
●
Included in the DJSI Europe and Bloomberg Gender Equality Index displaying the Group’s
visibility across key ESG indices and commitment to diversity
AWARDS & RATINGS
●
Received the 8
th
consecutive EPRA BPR Gold award & 7
th
consecutive EPRA sBPR Gold award
●
Included in the S&P Global Sustainability Yearbook 2025 which includes 780 Companies out of
over 7,690 companies across 62 industries covered by S&P CSA and sets the Company apart
from its industry peers
●
Included in Sustainalytics’ 2025 ESG Top-Rated Companies List
●
Strong Sustainalytics rating (Top 4%) and S&P Global CSA rating (Top 5%, real estate incl. REITS)
SUPPORTING COMMUNITIES
Over 100 impactful projects supported
●
Significant contributions to communities across diverse portfolio locations
●
Focused on improving child and youth education and healthcare, fostering job readiness
for disadvantaged young individuals, supporting initiatives for underprivileged youth,
extending solidarity to ethnic minorities, and more
HIGH QUALITY TENANT SERVICES
TÜV Certified
●
Providing support to both commercial and
residential tenants.
●
Both service centers were TÜV recertified in 2024.
●
Further digitalization measures in residential
portfolio: improved tenant app and implemented AI to minimize call center waiting
times
EMPLOYEE SATISFACTION
●
Promoting physical and mental well being through OHS training, encouraging self
development among employees through surveys, developing “career pathway” to
offer opportunities to our employees, and empowering employees to create their own
sustainability projects through the "Activate the Base" program
Social
Governance,
Awards & Indices
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Letter From the CEO
Market & Portfolio Performance
2024 started with continued macro-economic uncertainty.
The increased level of interest rates, combined with
economic uncertainties and a global economic slowdown
negatively impacted business activity throughout the
year, particularly in Germany, which also impacted tenant
demand, particularly for offices. Although the expectation
was that interest rates had peaked in 2023, inflation and
interest rates remained volatile through the first few
months of the year. The European Central Bank (ECB) started cutting interest rates only in June
2024 as inflation became more under control, and lowered rates four times in 2024, in total by
100 basis points, followed by two more rate cuts in Q1 2025. As a result, interest rate volatility
started to reduce, and the outlook for real estate companies turned more positive.
In 2024 our portfolio continued to drive robust operational growth as we benefit from our
asset types and geographic diversification, and we recorded 2.9% like-for-like rental growth
across our asset types. Despite market headwinds, rental growth in the office portfolio was
driven by indexation and reversion on reletting. In the hotel portfolio we recorded strong rental
growth, supported by the reopening of several major hotels which were undergoing extensive
refurbishment. The residential portfolio continues to benefit from strong fundamentals, resulting
in accelerated rental growth and historic low vacancy rates. Looking ahead, we see an improved
economic environment that positions the Company well going forward.
Our residential portfolio, held primarily through the 62% stake in Grand City Properties,
continues to provide for stable cash generation with strong fundamentals. In 2024, we have
seen an improvement in conditions as cost inflation was significantly reduced, driving increased
profitability. The residential portfolio, located primarily in metropolitan areas in Germany and
London, continued to benefit from strong market fundamentals that we expect to provide mid-
and long-term growth drivers. These locations are supported by robust labor markets, driving
immigration into these cities. This is further affected by demographic and social shifts taking
place, such as the smaller households and demand for more space observable in Germany.
Meanwhile, higher construction costs and high regulatory hurdles make it increasingly visible
that construction at affordable levels has become exceedingly difficult without larger subsidies.
Consequently, the level of completions in Germany and London was well below governments’
targets and levels required to meet the increasing demand. Due to the economic pressures,
the number of new permits has decreased further in 2024 towards lows not seen since the
financial crisis, further driving the divergence between the actual and the required completions
in the future. German rental regulation results in a smoothing effect on rental growth, as a
result of which the high inflation of recent years is expected to support higher levels of rental
growth over the mid-term. As a result, we recorded a like-for-like rental growth of 4.4% in our
residential portfolio, driven mostly by in-place rental growth, as vacancy is kept at a low level of
3.5%. In London specifically, where there are fewer rent restrictions, we recorded even stronger
like-for-like rental growth of 4.8%.
Dear Stakeholders,
2024 presented a year of stabilization, addressing and overcoming challenges. We started the year with macro uncertainties, elevated inflation levels and peak interest
rates, and slowdown in the economy which continued to have an impact on the Group as well as the real estate industry as a whole. However, throughout 2024 we saw
the outlook improving, with four interest rate cuts, signs of stabilization of the inflation rate and a better macro-economic outlook. Accordingly, capital markets started to
improve in the spring of 2024, allowing us to return to the capital markets after several years again with several successful transactions which had very strong investor
demand. The valuation momentum is changing, with recovery starting in the second half of the year, and we saw property values increase again as the positive impact
of continued robust operational growth is again creating positive value. While there is still some work to be done to strengthen the Group’s financial position, we believe
that many of the challenges are behind us. We are pleased to present our accomplishments for the year.
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Looking at our hotel portfolio, we have made considerable progress in 2024, positioning the
Company to capture significant rent upside over the next years, which is supported by the
strong dynamics of the sector. The hospitality industry has seen another strong year, with
increasing demand, exceeding and continuing the recovery from the pandemic. Accordingly,
we recorded strong like-for-like rental growth of 2.9%. In 2024, we have worked on finalizing
the repositioning of several hotels which lifted the internal growth potential. Particularly, we
conducted complete refurbishments of our hotels in Brussels, which is the largest in Belgium,
in Paris, which is the largest events and conference hotel in France’s capital, and in Rome.
Furthermore, we executed measures to extract value upside in several other hotels, such as
the conversion of underutilized and back-office space into high-end serviced apartments in
the Hilton Berlin, as well as soft refurbishment and re-branding of several hotels to re-align
with updated key demand drivers post-pandemic, such as enhanced digital services, serviced
apartments, and long stays. Going forward we continue to see strong upside potential which
can be lifted from the hotel portfolio, which we aim to extract in the coming years, and we
will continue to explore ways in which we can create additional value, such as through the
conversion of select office space.
The letting market for offices remained challenging across the year. As was the case in 2023, we
saw businesses continue to exercise caution and delaying decisions for relocation and expansion.
This caution is reflected in a lower demand for new lettings and a longer leasing process, while
we saw more demand for lease extensions as tenants defer making decisions until risks subside.
On the other hand, high construction costs and interest rates have resulted in further project
cancellations in the market and a significant reduction in development and construction activity,
which we expect will result in a reduced level of new supply over the mid-term. Additionally, in
2024 the remote working trend is reversing, and more employers are incentivizing their employees
to have a higher presence in the office.
The combined effects resulted in market vacancy rates
slightly increasing but remaining at healthy levels below historical averages.
Despite the sluggish economy across Germany and the Netherlands, our office portfolio has
seen a positive 1.8% like-for-like rental income growth. This was driven by indexations, rent
step-ups, and reversion on reletting, while vacancy remained broadly stable.
The Company’s
solid position is reflected in the diverse metrics of its office portfolio, where approximately 75%
of our tenants are governments, multi-national and large domestic corporations, with a long
lease structure with a 4.3y WALT. The geographical diversification of the portfolio also provides
stability against adverse economic conditions, since office markets in the Netherlands and
Germany are characterized by higher occupancy rates, a more effective use of space and higher
office attendance as compared to counterparts in the US & UK. Trends which are supported
by a more diverse demand base for office space and healthier supply and demand conditions.
Looking ahead, we expect demand to pick up again once the positive momentum in business
activity starts to pick up. Moreover, in targeted locations, we are exploring office conversions in
order to capture the upside from current trends, such as the increasing demands for serviced
apartments and long-stays, as well as high demand and a strong opportunity for conversion to
data centers in several of our key locations.
Successful Return to Capital Markets and Strengthened Financial Position
Starting early 2022, the financial markets and particularly the real estate sector, were impacted
by high market and interest rate volatility. During this time of high uncertainty capital market
activity reduced significantly, limiting the access to liquidity. To face these challenges, and
reduce financial risk for the Company, we focused on preserving and further strengthening our
liquidity, to be able to reduce refinancing risk and to cover several years of debt maturities in
advance. Through the execution of several liquidity and balance sheet supportive measures such
as disposals, bank financing, decision to not call perpetual notes, and dividend suspension, the
Company has been able to preserve liquidity and protect the Company at time of uncertainty.
Starting in April 2024, the Group launched several exchange and tender offers to holders of
our perpetual notes which we had not called in the previous periods, as well as those with
first call dates in the near future. As we saw conditions in capital markets improve it was our
view that it was the appropriate time to launch the transactions. The transactions were highly
successful, with a combined acceptance ratio of ca. 85%, and €2.6 billion of new perpetual notes
were issued. As a result of which a large share of the perpetual note balance which had lost
equity content under S&P’s rating methodology in the previous periods regained such equity
content, thereby supporting our S&P credit rating. The tender component of the transactions
allowed us to reduce the nominal balance of the perpetual notes by ca. €300 million thereby
also reducing future coupon payments.
As market conditions continued to improve in the second half of the year, the Group issued in
July 2024
its first bonds since 2021 across two transactions, a €650 million bond issued by
Aroundtown and a €500 million bond by GCP. The issuances attracted strong demand from
globally leading bond investors and were ca. 7 times oversubscribed, highlighting strong
investor confidence. The proceeds of the bond issuances were used to repay short-term debt
and pro-actively manage our debt maturity profile. In 2024 we repaid €1.3 billion of debt,
with
a further ca. €480 million of redemptions in 2025 year-to-date. Moreover, to further strengthen
our liquidity position and diversify funding sources, we signed ca. €360 million of bank debt.
With the objective of continuing to strengthen our balance sheet and reduce leverage, we have
also made further progress in disposals, signing €935 million and closing €740 million in 2024.
As of December 2024, the Company has signed disposals amounting to €330 million which
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13
had not yet closed as of the reporting period, of which over €120 million has since closed in
2025 year-to-date. The Company has been able to sell across all market cycle conditions, and
with the transaction market activity picking up, we expect additional favorable conditions if
we were to conduct further disposal activities. Overall, these actions materially strengthened
the Company’s financial position.
Valuations
In 2024 we see an increasing spread between rental yields, which are increasing due to
the strong operational dynamics, and interest rates, which are coming down with the ECB
progressing with its rate cut cycle. As a result, we expect to see an increase in transaction
activity. Accordingly, the devaluation momentum significantly slowed down in the first half of
2024, and the Group recorded positive revaluation in the second half of the year. As a result, the
valuations remained broadly stable reflecting a like-for-like revaluation loss of 0.5% for the year
2024. We benefit from our highly diversified portfolio, without dependence on a single location
or asset type. The hotel and residential portfolios registered 4.2% and 1.1% like-for-like value
increase respectively for 2024, recovering from the loss in the first half of 2024. Offices recorded
a like-for-like value decline of 3.1%, remaining broadly stable since June 2024.
The Group has managed to navigate the uncertain economic environment since the start of the
pandemic well, with leverage only rising modestly, and starting to reduce with our year-end
2024 results, thanks to several deleveraging measures such as disposals, dividend suspension
and strategic debt buybacks. The improved transaction market and the valuations turning
positive are supportive of the balance sheet strength going forward, supporting our aims to
reduce leverage further
.
New innovative initiatives, ATechX and ATworld
In 2024, we launched ATechX, our PropTech Accelerator which we run together with FifthWall,
noa, and Round Hill Capital, prominent global Proptech VCs & RE Investors. We are convinced
that Aroundtown is in a unique position to exploit the synergies stemming from the
complementarity of ours and the VCs’ developed capabilities, and this partnership will unlock
new ways to create value and accelerate the growth of promising innovative companies in
the PropTech sector through the Company’s network, large portfolio, industry expertise and
resources. The focus areas of the accelerator will be CO
2
reduction, Building Digitization, Content
and Engagement, ESG Optimization, Ancillary Revenue Generation and Cost Efficiencies. We
strongly believe this initiative will provide several strategic benefits to Aroundtown, such as the
privileged access to these innovative solutions with the potential to increase efficiency that will
continue to improve AT’s operations, and will open new risk-mitigated investment opportunities
with the potential to create outsized financial returns.
We have also launched ATworld, a user experience platform that will improve the experience
of existing and new tenants, by transforming Aroundtown’s office and hotel spaces into a
connected network of space, service and experience locations that will open new possibilities
for businesses and people. ATworld allows users to choose and book workspaces all across
Europe, as well as offering access to further benefits such as concierge services, hospitality
offerings and gyms and spas in hotels. This platform will provide several advantages to tenants,
such as the ability to attract the best talent independently of their specific location, increasing
flexibility and employee satisfaction. With this initiative, we’re improving the tenant experience
and responding to their modern needs, furthering Aroundtown’s position as an innovation-first
company, while also supporting the attractiveness of our assets.
ESG Progress
During 2024 we have continued to make progress on all ESG fronts, and we are pleased to
present here some of our key achievements. We have been able to continue to expand our
capabilities, continuing to embed the ESG principles into the culture of our company. This
progress has been the result of the dedicated effort of our Sustainability team, with the
support of all teams across the company. Looking forward, we remain committed to deepen
our ESG initiatives and internal capabilities to continue to drive progress and lasting impact
in these areas.
Environmental
We are proud to share that in 2024 we have continued to make substantial progress in green
building certifications, benefiting from and strengthening our developed competencies that
started with the first certifications in 2021. As a result, our office portfolio is now 65% certified,
as compared to 36% last year.
We also started obtaining certifications in our hotel portfolio,
where we have reached a level of 30% and are working on continued strong progress also in
2025.
In addition to our progress in the obtainment of green certifications in our buildings, we have
continued to increase the energy efficiency of our assets through targeted capital expenditure
measures. We have also strived to make progress in these areas when conducting ongoing
refurbishments in our properties, aiming to improve insulation and lighting in order to
minimize energy loss, favoring more efficient consumption and further reducing CO
2
tax. These
investments, in turn, increase tenant satisfaction and the value of our assets.
We are well on track to achieve our carbon reduction target of 40% by 2030.
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Social
In 2024, we have again focused on having a positive impact on our communities, improving
tenant services and reinforcing our standing as a preferred employer. Through Aroundtown
and GCP foundations, we have collaborated in over a hundred projects in a broad range of
areas, collaborating with charities and local associations. For example, through the Aroundtown
foundation, we were able to support several food banks, or “Tafels”, in Germany, supporting in
funding for fleet costs, storage facilities, and specific projects aimed at lifting young people out
of poverty. We also continued to provide support for organizations that support children and
youths in several forms, such as providing resources for educational institutions and sports
organizations, funding programs that organize activities for ill children, etc. Furthermore, in
2024 we had 39 employees provide support to Tafels in several of our locations as part of our
social day program.
In light of our ongoing commitment to ensure high tenant satisfaction, the service center for both
residential as well as commercial tenants was recertified in 2024. GCP has further integrated
customer service functions on its applications, making it easier for tenants to chat with our
employees in the service center and track the status of their requests. Furthermore, an AI chatbot
has been introduced to further streamline the process and support operational efficiencies.
We understand the importance of all our employees in driving the performance of the Company,
and we continuously strive to attract, develop and retain the best talent. To strengthen our
position as a preferred employer in the real estate sector, we have launched several impactful
programs. Among them is the "Career Pathways" program, set for completion in 2025, designed
to offer employees clearer insights into growth and development opportunities. Furthermore,
we expanded KPI-based evaluations to a broader group of employees and introduced surveys
to promote self-development. We also completed the second round of the "Activate the Base"
program, empowering employees to create their own sustainability projects with support from
a dedicated coach.
Governance, Indices and Awards
We are committed to maintaining the highest transparency and sustainability standards, and we
are proud to have received the EPRA BPR Gold award for the 8
th
consecutive year and the EPRA
sBPR Gold award for the 7
th
consecutive year. We are also proud to continue to be included in the
Bloomberg Gender Equality Index, which reflects our ongoing dedication to promote diversity
and anti-discrimination in our Company. Our focus on sustainable practices is further reflected
in our presence in prestigious ESG indices, including the Dow Jones Sustainability Index and the
MDAX ESG+ Index, as well as Sustainalytics’ rating which places us in the low-risk category and
among the top 4
th
percentile globally across all industries, putting us in the 2025 ESG Top-Rated
Companies List for the European region. Additionally, we ranked in the top 5th percentile of
the whole real estate industry in the Corporate Sustainability Analysis (CSA) conducted by S&P,
supporting the inclusion in the mentioned indexes and placing Aroundtown in the S&P Global
Sustainability Yearbook of 2025, which contains 780 companies out of the 7,690 assessed in
the CSA. These recognitions illustrate our culture and underscore our ongoing commitment to
the best ESG practices.
I would like to express my gratitude once again to our exceptional teams for their dedication,
proactive mindset, and tireless efforts throughout the past year. While the recent years have
presented their share of challenges, Aroundtown has demonstrated resilience in navigating
these pressures. While there is still macro-economic uncertainties and volatility in the capital
markets, we do see a significantly clearer path going forward and are confident to the company’s
ability to extract internal growth as well capture opportunities in the market to create and
deliver excess value to our stakeholders in 2025 and the years to come.
Barak Bar-Hen
March 26, 2025
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15
The Strategy and
Business Model
Value creation
Sourcing and targeting
acquisitions in central
locations in top tier cities
with growth and upside
potential
Repositioning
and operational
improvements
Robust cash flows
supported by strong tenant
structure as well as capital
recycling by selling non-
core and mature assets.
Disposals to be channeled
into deleveraging
Additionally continuing
to extract value
and rights from
the properties
Acquisition
and takeover
below market prices
►
AT‘S VALUE CREATION STARTS PRIOR TO ACQUISITION
01
02
03
04
05
The following section contains information that also covers reporting requirements under the ESRS.
Data points: ESRS 2 SBM-1 Paragraph 40 a i, ESRS 2 SBM-1 Paragraph 42.
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01
Sourcing and targeting acquisitions in central locations in top tier
cities with growth and upside potential
Aroundtown’s property sourcing success stems from its unique network as well as
its reputation as a reliable real estate acquisition partner. The Group focuses on
acquiring value-add properties in central locations of top tier cities characterized by
below market rent levels, inefficient cost or lease structure and/or vacancy reduction
potential. With over two decades of experience in the real estate markets, the Group
benefits from a preferred buyer status across its sourcing network. The Group sources
deals from a large and diverse deal sourcing base, such as receivers, banks, loan funds,
broker networks, distressed owners, private and institutional investors and court
auctions. The Group’s primary focus is on major cities and metropolitan areas with
positive demographic prospects.
The Group follows acquisition criteria which ensure that newly acquired properties
align with its business model. These criteria include:
•
Focus on central locations in top tier EU cities
•
Value-add potential through operational improvements
•
Cash flow generating assets
•
Rent level per sqm below market level (under-rented properties)
•
Purchase price below replacement cost and below market prices
•
Potential to reduce operational cost per sqm significantly
Due to the experience and knowledge of its board and management, the Group is
able to consider all possible uses for properties that it acquires, including altering
the property’s primary use in order to target specific supply shortages in the market.
The Group believes that its business model provides it with a strong and sustainable
competitive advantage.
02
Acquisition and takeover below market prices
After a potential property passes an initial screening, the property is further assessed
in order to take into account the specific features of each project while ensuring that
the acquisition is in line with the Group’s overall business strategy. AT believes that its
experience in analyzing properties with value creation potential, and in identifying
both the potential risks and the upside potential of each property, results in fast, but
thorough and reliable, screening procedures.
Once a property is acquired, the actual takeover occurs swiftly and efficiently. Because
liquidity plays a significant role in the acquisition of value-add properties, AT benefits
strongly from its solid liquidity position and its ability to acquire properties with
existing resources and refinance the acquisition at a later stage. The Group also
benefits from a strong and experienced legal department, which, combined with
close and longstanding relationships with external law firms, enables AT to complete
multiple deals simultaneously.
03
Repositioning and Operational Improvements
As a specific tailored business plan is constructed for each property, and the
weaknesses and strengths are identified pre-acquisition, the execution of the
repositioning process becomes smoother and faster.
The business plan input is
integrated into AT’s IT/ software platform which enables the management to monitor
all operational and financial parameters and fully control the repositioning progress.
The success of the repositioning of the properties is the result of the following
functions:
Operational and marketing initiatives
The initial repositioning activities aim at minimizing the time until the profitability of
the acquired properties is improved. Targeted marketing activities are implemented
to increase occupancy and thereby rental income. Vacancy reduction initiatives
are tailored to the specific property type. Procedures applied to AT’s commercial
properties include establishing a network of internal and external, as well as
local and nationwide letting brokers, offering promotional features and building
a reputation in the market for high service standards. For the Group’s hotel assets,
optimal operators are selected and a fixed long-term lease contract is entered into
once the hotel is repositioned. Initiatives for the Group’s residential properties target
relationship building with potential tenants and the local community by collaborating
with local municipalities, supporting community initiatives and advertising on key
real estate platforms, as well as targeted refurbishment of vacant apartments prior
to re-letting.
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Rent increase and tenant restructuring, assessed during the due diligence process,
are executed according to the property’s business plan, and the Group continuously
screens its portfolio to find additional opportunities for operational improvements.
Furthermore, the operational improvements the Group initiates improve the living
quality or business environment for existing and future tenants, resulting in increased
demand for these repositioned assets.
Having identified areas for operational improvements, the Group drills down on cost
saving opportunities on a per unit basis, making use of modern technologies such
as consumption-based meters. These efforts, combined with cost savings achieved
through vacancy reductions and economies of scale, enable the Group to benefit
from a significant improvement of the cost base and therefore higher profitability.
AT manages its entire real estate value chain across acquisition, letting, upkeep and
refurbishment. This integrated approach brings further efficiency benefits, a preferred
landlord status and fast response times to its tenants.
Smart capex investments when required
AT addresses capex needs to keep the properties’ high standards and addresses
the requirements of its existing and prospective tenants. Capital improvements are
discussed in close coordination with committed tenants, allowing an efficient and
cost-effective implementation of the investments. The carried-out investments are
followed up by AT’s experienced construction team.
The financial feasibility of the proposed alterations is balanced against the lease
term, rental income and property acquisition cost and bears quick returns over the
investment period.
Key stakeholder relationship management considering sustainability matters
Aroundtown’s strategy and business model takes into account the diverse interests
and perspectives of its stakeholders, including its valued employees, both residential
and commercial tenants, municipalities and local communities in which the Group
operates, suppliers and business partners, and investors, and forms an important part
of the approach to sustainable growth. More details on the Group’s value chain is
available in the Consolidated Sustainability Statement on
p. 63. AT understands that
without the support of its stakeholders that the Group would not be able to fully
execute on its strategic goals. Understanding and addressing the needs and concerns
of these stakeholders requires ongoing communication, active engagement, and a
commitment to ethical business practices. Regular feedback mechanisms, community
involvement, and a proactive approach to problem-solving contribute to building
trust and long-lasting relationships with all stakeholders and have been embedded
across AT’s business functions to ensure that their interests are represented and
addressed. Aroundtown’s business strategy takes into account the sustainability
matters identified as material during its Double Materiality Assessment. Whether
these relate to its own workforce, its supply chain or the energy efficiency of its
assets and other environmental matters, the Group adapts its strategy and underlying
processes where necessary to reflect the impacts and importance of its material
sustainability topics.
Aroundtown puts great emphasis on establishing strong relationships with its
tenants to reduce churn rates, to predict as well as strengthen the tenant structure
and thereby positively affect its cash flows in the future. The Group aims to offer
high quality services for both potential and existing tenants. The Group pays great
attention to the industry in which its commercial tenants operate and to their
individual success factors. The Group also offers direct support to its tenants through
add-on facilities at its rental properties such as space extensions to facilitate growth
and smart space redesign to match modern office layouts. The Group supports its
tenants through its TÜV- and ISO 9001:2015-certified commercial and residential
Service Centers, available via various channels. Furthermore, within its commercial
property portfolio the Group aims to establish personal relationships between its
tenants and its asset and property managers, providing them with personal contact
points, which allows the Group to react promptly to problems and proactively
prolonging existing contracts in order to optimize and secure long-term revenues.
04
Robust cash flows supported by strong tenant structure
Aroundtown targets the generation of robust cash flows throughout its operations.
This is supported by ongoing cost controls and long-term value creation through
repositioning and operational improvements and by extracting the upside potential
embedded in the portfolio, continuous optimization of the tenant structure and
thereby generating robust internal growth and cash flows.
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Capital recycling by selling non-core and mature assets
While the Group’s main focus is on extracting the potential of its portfolio, the Group
also pursues an accretive capital recycling of non-core and/or mature properties. AT
continuously analyzes its portfolio in terms of upside potential to lift and focuses its
resources on properties with higher upside. AT seeks to dispose of properties where
most of the potential has been achieved or which are not in the core locations of AT.
The disposal of such properties enables capital recycling and provides firepower to
pursue new opportunities with higher upside potential on one hand and increases
the quality of the portfolio on the other. Additionally, proceeds from disposals enable
the Company to buy back debt, strengthen the balance sheet and reduce leverage.
05
Extracting building rights from unused or underutilized land or
conversion rights from existing properties and new land
As part of the value creation process, Aroundtown identifies and extracts building
rights from unused or underutilized existing and new land and buildings and
conversion rights, providing an additional internal growth driver. AT assesses
internally the best use for the rights and advances on to maintain the discussion
with authorities, engineers and architects in order to realize plans into permits. Once
the planning and permit phases are completed, Aroundtown analyzes each project
individually and decides the best way to realize the value into proceeds. Aroundtown
does not intend to fully build and develop all of the rights and estimates that most
of the rights will be disposed.
Frankfurt
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Experienced Board and Management
AT’s board and management can draw on a wealth of experience in the real estate
market and associated sectors. This enables the Group to continuously innovate, make
strategic decisions quickly and accurately, and successfully grow. The Group’s remarka
-
ble growth since inception into one of the largest real estate companies in Europe has
created two key benefits in this regard: on one hand, the ability to attract managers
and employees that redefine the industry, and on the other hand the internalization of
a knowledge and experience pool at a fraction of the cost in relation to its portfolio.
This knowledge is communicated and utilized across the Group and its business
units which shapes its processes and operational improvements.
AT’s management possesses the knowledge that makes up its main competitive
advantage, the ability to extract the operational and value potential from its assets.
This includes the ability to execute the business plan successfully, which includes
executing vacancy reduction activities, establishing cost efficiency measures, set
-
ting rent increase processes, understanding tenant structures, and optimizing rental
contracts in terms of lease maturity and income security. Cross-sector experience
enables the extraction of the full value of the properties and operational experience
improves the monitoring and reduction of costs.
Deal Sourcing and Ability to Create Accretive Growth
The Group’s acquisition track record over the past two decades has led it to become
a market leader and have a preferred acquirer status, primarily due to its professional
approach, fast and high execution rates, and reliability.
The Group has a proven track record of acquiring properties with various value-add
drivers and successfully extracting the upside potential. This activity is accompanied
by a pipeline and acquisition of attractive properties and the successful transition of
the existing properties into mature assets, generating secure long-term cash flows.
This large network also enables Aroundtown to dispose properties.
Quality Locations in Top Tier Cities
The Group’s assets are primarily located in two of Europe’s strongest economies
with AAA sovereign ratings: Germany and the Netherlands. Within these countries,
the Group focuses on central locations in top tier cities including Germany’s capital
Berlin, the financial center Frankfurt, the wealthiest cities Munich and Hamburg, the
large metropolitan area of North Rhine Westphalia, Netherlands’ financial center and
capital Amsterdam, Europe’s biggest port city and Germany’s dynamic metropolitan
regions in the east Dresden and Leipzig. The Group’s assets are further diversified
into other top cities with strong economic fundamentals, such as one of Europe’s
main financial centers and most popular touristic destination, London.
Conservative Financing Structure
AT’s conservative capital structure approach is reflected in an LTV of 42% as of
December 31, 2024, below the Board of Directors’ guidance of 45%. Aroundtown’s
management views the conservative debt metrics as vital to secure long-term
financial strength. The Company continuously analyzes financing opportunities and
aims to take advantage of the optimal source of capital in each market environment.
In the current market environment the Company focuses on secured financing at
relatively attractive rates.
Key Strengths
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Financial Policy
Aroundtown has set a financial policy to improve its capital structure further:
•
LTV guidance below 45% on a sustainable basis
•
Debt to debt-plus-equity ratio at 45% (or lower) on a sustainable basis
•
Maintaining conservative financial ratios with a strong ICR
•
Unencumbered assets above 50% of total assets
•
Long debt maturity profile
•
Good mix of long-term unsecured bonds & bank loans
•
Dividend distribution of 75% of FFO I per share*
Aroundtown’s conservative capital structure, strong track record in accessing capital
markets and its strong relationships to mortgage banks enable the Group to finance
its funding needs. The Group maintains a robust liquidity position through a mix
of operational cash flow generation and balance of cash and liquid assets which
as of December 31, 2024 amounted to €3.6 billion. Additionally, undrawn RCF’s of
which €0.8 billion have been extended in 2024 and a high ratio of unencumbered
investment properties of 71% by rent (€16.9 billion in total value) as of December
31, 2024 provide for additional financial flexibility.
*The decision is subject to market conditions and AGM approval
Hamburg
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71%
74%
Straight bonds
Loans & borrowings
Total Equity
of which Perpetual Notes
Dec 2023
Dec 2023
Dec 2023
41%
52%
7%
FINANCIAL POSITION HIGHLIGHTS
INVESTMENT GRADE CREDIT RATING
LOAN-TO-VALUE
HIGH UNENCUMBERED ASSETS RATIO
AT has a BBB+ (outlook negative) rating by Standard & Poor’s ratings services
(“S&P”). S&P acknowledges AT’s strong business profile and large portfolio with
great scale and diversification, well balanced across multiple asset types and re
-
gions with no dependency on a single asset type or region, together with a large
and diverse tenant base and long lease structures. Since the initial credit rating
of ‘BBB-’ received from S&P in December 2015, AT’s rating was upgraded twice
to the ‘BBB+’ rating. AT’s S&P credit rating was last affirmed in December 2024.
43%
42%
Board of Directors’ guidance of 45%
Dec 2024
Dec 2024
Dec 2024
41%
51%
8%
MAINTAINING HIGH
INTEREST COVER RATIO
(ICR)
4.0x
FY 2024
4.2x
FY 2023
Affirmed in Dec 2024
BBB
BBB
3.8
years
Average debt maturity
2%
Average cost of debt
OUTLOOK
NEGATIVE
€16.9BN
DEBT KPI'S
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Berlin
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Office
38
%
Residential 34
%
Asset Type
Strongly diversified portfolio with a
focus in offices, residential and hotels.
Tenant
High tenant diversification with no
material tenant or industry dependency.
Commercial portfolio with over 3,000
tenants and residential portfolio with
very granular tenant base.
Location
The portfolio is focused on the strongest
economies in Europe: 80% of the
Group‘s portfolio is in Germany and the
Netherlands, both AAA rated countries.
Focus on top tier cities of Germany and
the Netherlands and on London.
Well-distributed across multiple regions
with a large footprint in top tier cities
such as Berlin, Munich, and Frankfurt.
Industry
Each location has different key industries
and fundamentals driving the demand.
Therefore, the Group‘s tenants are
diversified into distinct sectors, eliminating
the dependency on a single industry.
Aroundtown’s
Quality Portfolio
Well-Diversified Group Portfolio
with Focus on Strong Value Drivers
GROUP
ASSET TYPE
BREAKDOWN
December 2024 by value*
Logistics / Other 2%
Retail 4%
Hotel 22
%
TOTAL
PORTFOLIO:
€24BN*
*including development rights & invest
and excluding properties held for sale
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►
Two of the strongest
economies in Europe with
AAA credit rating
►
Among
the lowest
unemployment
levels in Europe
►
Low debt/GDP
levels compared
to European
average
►
7 of the 15 largest
metropolitan areas
by GDP in the EU are
in Germany & The NL
►
Together making
up more than a
quarter of the
EU‘s economy
Group Portfolio
Overview
Germany & The Netherlands:
80% of the portfolio
inhabitants per sqkm
(Destatis & CBS)
POPULATION DENSITY
IN GERMANY AND
THE NETHERLANDS
Rotterdam
Amsterdam
Utrecht
Frankfurt
Hannover
Wiesbaden
NRW
Mannheim
Mainz
Stuttgart
Dresden
Munich
Bremen
Hamburg
Berlin
Leipzig
Halle
Nuremberg-Fuerth
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High Geographical
Diversification
Berlin is the single largest location.
AT is a leading landlord in Berlin across
multiple asset types.
London 8
%
Munich 7
%
Dresden/Leipzig/Halle 7
%
Frankfurt 6
%
Nuremberg
1%
Bremen
1%
Hannover
1%
Rotterdam
1%
Utrecht
1%
Others
21%
Stuttgart/BB
1%
Hamburg/LH 2
%
Wiesbaden/Mainz/Mannheim 3
%
Amsterdam 2
%
Berlin 24
%
NRW 14
%
GROUP
REGIONAL
DISTRIBUTION
December 2024 by value*
*including development rights & invest
and excluding properties held for sale
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Brussels
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Alexanderplatz
Rathausstraße
11k sqm
Alexanderplatz
Karl-Liebknecht-Straße
34k sqm
Alexanderplatz
Karl-Liebknecht-Straße
24k sqm
Alexanderplatz
Karl-Liebknecht-Straße
6k sqm
Alexanderplatz
Alexanderstraße
55k sqm
Alexanderplatz
Bernhard-Weiß-Straße
2k sqm
Alexanderplatz
Train Station
Berlin TV Tower
Berlin
Alexanderplatz
Approx.
130,000 SQM
lettable space in the prime
commercial and tourist center
Alexanderplatz
Central locations within top tier cities: A Berlin example
Best-in-class Berlin portfolio
of the portfolio is located in top tier
neighborhoods including Charlotten-
burg, Wilmersdorf, Mitte, Kreuzberg,
Friedrichshain, Lichtenberg, Schöne-
berg, Neukölln, Steglitz and Potsdam
85
%
15
%
Mitte
Pankow
Reinickendorf
Spandau
Charlottenburg-
Wilmersdorf
Steglitz-
Zehlendorf
Tempelhof-
Schöneberg
Friedrichshain-
Kreuzberg
Neukölln
Treptow-
Köpenick
Marzahn-
Hellersdorf
Lichtenberg
of the portfolio is well located pri-
marily in Reinickendorf, Spandau,
Treptow, Köpenick and Marzahn-
Hellersdorf
29
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Residential
properties
Commercial
properties
Map representing approx. 95% of the portfolio
AT is the leading office landlord
in Berlin, Frankfurt and Munich
among publicly listed peers
Office:
High
Quality Offices in
Top Tier Cities
Munich 14
%
NRW 12
%
TOP 4
OFFICE CITIES:
Berlin, Munich,
Frankfurt and Amsterdam
make up
60
%
of the office portfolio.
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Wiesbaden/Mainz/
Mannheim
3%
Warsaw
2%
Amsterdam 5
%
Dresden/Leipzig/Halle
3%
Rotterdam
3%
Utrecht
2%
Hannover
2%
Nuremberg
2%
Stuttgart
1%
Others
8%
London
1%
Hamburg
1%
Berlin 27
%
OFFICE
December 2024 by value
Frankfurt
14
%
Cologne
Utrecht
Rotterdam
Mannheim
Berlin
Stuttgart
Dresden
Frankfurt
Leipzig
Berlin
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HOTELS:
Focus on Central Locations,
Quality and Operators with Brand Recognition
Over 150 hotels across top locations with fixed long-term leases with third party hotel operators
AT’s hotel portfolio, valued at €5.2 billion as of
December 2024, is well diversified and covers
a total of 1.6m sqm. The hotels are branded
under a range of globally leading branding
partners which offer key advantages such
as worldwide reservation systems, global
recognition, strong loyalty programs, quality
perception and benefits from economies
of scale. The hotel assets are let to hotel
operators which are selected according to
their capabilities, track record and experience.
AT’s management participates in the branding
decision of the hotel, applying its expertise in
selecting the optimal brand.
Rome
4%
Athens
3%
Dresden/Leipzig/Halle
3%
Hannover/ Braunschweig
2
%
Others
18
%
London
1
%
Stuttgart/BB
1
%
Munich/BR
2
%
Wiesbaden/Mainz/Mannheim
1
%
S
tralsund/Rügen/Usedom
1
%
Frankfurt
1
%
Drenthe (Netherlands,
Center Parcs)
3%
Hotels leased to third party operators and franchised with various strong brands and a large scale of categories which provides high flexibility for the branding of its assets
Berlin 20
%
NRW 7
%
Meuse (Netherlands,
Center Parcs)
7%
Limburg (Belgium,
Center Parcs)
7%
Brussels
6%
Paris
5%
Hamburg/
Lüneburger Heide
(Center Parcs)
4
%
Eindhoven/Brabant
(Center Parcs)
4%
HOTELS
December 2024 by value
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Diverse European Metropolitan Footprint
Fixed long term leases with third party hotel operators
Aroundtown’s hotel assets are well-diversified and well-located across major Eu
-
ropean metropolitans, with a focus on Germany.
The locations of AT’s hotel assets
benefit from a strong tourism industry since they are some of Europe’s most visited
cities as well as top business locations such as Berlin, Frankfurt, Munich, Cologne,
Paris, Rome and Brussels.
High Geographical
Diversification
Cologne
Cologne
Davos
Berlin
Berlin
Berlin
Eindhoven/Brabant (Netherlands, Center Parcs)
Hamburg/ Lüneburger Heide (Center Parcs)
Bad Saarow (Brandenburg/Berlin)
Brussels
Rome
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Dresden/Leipzig/
Halle 14
%
Mannheim/KL/
Frankfurt/Mainz
4%
Hamburg/
Bremen
4%
Nuremberg/Fürth/
Munich
4%
Others
10%
The residential portfolio is primarily held through a 62% stake
in Grand City Properties (“GCP”) as of December 31, 2024.
GCP is a leading market player in the German residential
market and a specialist in value-add opportunities in
densely populated areas, predominantly in Germany, as well
as in London. GCP is a publicly listed real estate company,
traded on the Frankfurt Stock Exchange. Since July 1, 2021,
GCP is consolidated in AT’s financial accounts, providing the
Group with a well-balanced portfolio breakdown. GCP holds
61k units in its portfolio with the properties spread across
densely populated areas in Germany, with a focus on Berlin,
North Rhine-Westphalia and the metropolitan regions of
Dresden, Leipzig and Halle, as well as London. GCP includes
a relatively small share of commercial properties which AT
reclassifies into their relevant asset class. GCP puts a strong
emphasis on growing relevant skills in-house to improve
responsiveness and generate innovation across processes and
departments. Through its Service Center and by supporting
local community initiatives, GCP established industry-leading
service standards and lasting relationships with its tenants.
For more information, please visit GCP’s
website
.
Grand City
Properties
Residential portfolio
GCP
REGIONAL
DISTRIBUTION
December 2024 by value
Berlin 23
%
NRW
21
%
London
20
%
Berlin
Berlin
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BBB
OUTLOOK
NEGATIVE
Further Portfolio Diversification
through Logistics/Other and Retail
Retail: Largest focus is on resilient essential goods tenants and grocery-anchored
properties catering strong and stable demand from local residential neighborhoods
Hamburg
8%
Dresden/Leipzig
/Halle
5%
%
NRW
4%
Stuttgart
2%
Hannover
4%
Others
5%
Munich
1%
Berlin 41%
Kassel 30%
Amsterdam
6%
Frankfurt/Mainz
4%
Others
12%
Hamburg
5%
Rostock
1%
Dresden/Leipzig/Halle
1%
Stuttgart/BB
1%
LOGISTICS/
OTHER
December 2024
by value
RETAIL
December 2024
by value
Berlin 44%
NRW 26%
Berlin
Kassel
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December 2024
Investment
properties
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualized
net rent
(in €M)
In-place rent
per sqm
(in €)
Value
per sqm
(in €)
Rental
yield
WALT
(in years)
Office
8,268
2,993
12.7%
431
13.3
2,763
5.2%
4.3
Residential
7,802
3,506
3.5%
383
9.3
2,225
4.9%
NA
Hotel
5,164
1,565
2.6%
254
13.5
3,299
4.9%
14.2
Logistics/Other
400
433
6.7%
26
5.2
925
6.4%
4.8
Retail
1,024
493
13.5%
52
10.0
2,077
5.1%
4.5
Development rights & Invest
1,717
Total
24,375
8,990
7.5%
1,146
11.2
2,521
5.1%
7.6
Total (GCP at relative consolidation)
21,093
7,530
8.1%
989
11.6
2,583
5.1%
7.7
Asset type overview
Regional overview
December 2024
Investment
properties
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualized
net rent
(in €M)
In-place rent
per sqm
(in €)
Value
per sqm
(in €)
Rental
yield
Berlin
5,145
1,370
8.4%
210
13.4
3,756
4.1%
NRW
3,236
1,839
7.5%
177
8.3
1,760
5.5%
London
1,978
235
3.7%
104
39.8
8,430
5.2%
Dresden/Leipzig/Halle
1,635
1,044
4.4%
86
7.1
1,567
5.3%
Munich
1,438
486
8.8%
54
9.6
2,961
3.8%
Frankfurt
1,252
406
16.8%
61
15.2
3,088
4.9%
Wiesbaden/Mainz/Mannheim
592
237
7.6%
33
11.9
2,503
5.5%
Amsterdam
543
159
7.8%
29
15.7
3,420
5.4%
Hamburg/LH
467
180
3.8%
28
12.9
2,590
6.0%
Hannover
259
156
17.1%
14
9.3
1,660
5.5%
Rotterdam
198
83
5.0%
15
14.7
2,381
7.6%
Utrecht
180
70
6.9%
12
13.9
2,593
6.6%
Stuttgart/BB
161
82
9.2%
10
11.1
1,957
6.4%
Other
5,574
2,643
6.7%
313
10.4
2,108
5.6%
Development rights & Invest
1,717
Total
24,375
8,990
7.5%
1,146
11.2
2,521
5.1%
AROUNDTOWN
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36
Capital Markets
Key Index Inclusions
Aroundtown’s share is a constituent of several major indices such as
MDAX, MDAX ESG+,
FTSE EPRA/NAREIT Index Series, MSCI World Small Cap, DJSI Europe
as well as
GPR 100
& 250, and GPR Global Top 100 ESG
.
Investor Relations Activities
The Group is proactively approaching a large investor audience in order to present its
business strategy, provide insight into its progress and create awareness of its overall
activities to enhance its perception in the market. AT participates in a vast amount of
various national and international conferences, roadshows, one-on-one presentations and
in virtual video conferences in order to present a platform for open dialogue. Explaining
its unique business strategy in detail and presenting the daily operations allow investors
to gain a full overview about the Group’s successful business approach. The most recent
information is provided on its website and open channels for communication are always
provided. Currently, AT is covered by 19 different research analysts on an ongoing basis,
with reports updated and published regularly.
1)
excluding suspended
voting rights
Placement
Frankfurt Stock Exchange
Market segment
Prime Standard
Trading ticker
AT1
Initial placement
of capital
13.07.2015
Key index
memberships
MDAX
MDAX ESG+
FTSE EPRA / NAREIT:
– Global
– Developed Europe
– Eurozone
– Germany
– Green Indexes
DJSI Europe
MSCI World Small Cap
GPR 100 & 250
GPR Global Top 100 ESG
AS OF DECEMBER 31, 2024
Number of shares
1,537,025,609
Number of shares,
base for share KPI
calculations
1)
1,093,593,546
AS AT MARCH 25, 2025:
Shareholder Structure
Freefloat: 46%
Shares held in treasury
i)
:
29%
Avisco Group/Vergepoint
ii)
:
15%
Stumpf Capital GmbH
iii)
:
10%
i)
12% are held held through TLG Immobilien AG,
voting rights suspended
ii)
controlled by Yakir Gabay
iii)
controlled by Georg Stumpf
Market cap
€3.6 bn / €2.6 bn
(excl. treasury shares)
TRADING DATA
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Share price performance and total return since initial placement of capital (13.07.2015)
EPRA Germany (rebased) +10% total return
MDAX (rebased) +41% total return
Stoxx 600 (rebased) +91% total return
Aroundtown -6% total return
0
3
6
9
2015
2016
2017
2018
2019
2020
2021
2024
2025
2022
2023
Bad Saarow (Brandenburg/Berlin)
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Amsterdam
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Corporate
Governance Statement
The Group places a strong emphasis on corporate governance, which is executed
responsibly by the Board of Directors and the management teams. The Group is proud
of the high degree of confidence of its investors, which is reflected in the impressive
placement of funds by major global investment banks. Among the Group’s shareholders
and bondholders are large international leading institutional investors and major global
investment and sovereign funds.
Aroundtown follows very strict Codes of Conduct which apply to its employees and
business partners respectively and include references to policies and rules in respect
of
Anti-Corruption (inclusive of anti-bribery guidelines), Anti-Discrimination, conflicts
of interest and others.
Aroundtown is not subject to any compulsory corporate governance code of conduct or
respective statutory legal provisions. In particular, Aroundtown SA is not required to adhere
to the “Ten Principles of Corporate Governance” of the Luxembourg Stock Exchange or to
the German Corporate Governance Code, which are only applicable to domestic issuers,
save for recommendations C.10 (with sole reference to its applicability to the Chair of
the Audit Committee) D.8 and D.9 of the German Corporate Governance Code (Deutscher
Corporate Governance Kodex). Aroundtown issues an annual declaration that it does not
deviate from the aforementioned recommendations of the German Corporate Governance
Code. In general, Aroundtown already complies with most of these principles and continues
to take steps to implement environmental, social and corporate governance best practices
throughout its business. The Group’s efforts support the United Nations Sustainable
Development Goals, particularly those relating to Peace, Justice and Strong Institutions
(#16) and Partnerships for the Goals (#17).
The Group is a founding member of the United Nations Global Compact Network
Germany, one of the largest corporate sustainability initiatives, signaling the Group’s
commitment to strong corporate governance through adherence the Ten Principles of
the UN Global Compact.
Board of Directors
The Group is administered by a Board of Directors that is vested with the broadest powers
to perform and manage in the Group’s interests. All powers not expressly reserved by
the Luxembourg Law of 10 August 1915 on commercial companies, as amended,
(“Luxembourg Companies Act”) or by the articles of association of Aroundtown SA (“Articles
of Association”) to the general meeting of the shareholders, fall within the competence
of the Board of Directors.
On a regular basis, the Board of Directors evaluates the effective fulfilment of its remit and
compliance with corporate governance procedures implemented by the Group. Evaluations
are also performed by the Audit and Risk Committees on related aspects. The Board of
Directors currently consists of a total of seven members, of which four members are
independent, and one member is non-executive. The members are elected by the general
meeting of shareholders and resolve on matters on the basis of a simple majority, in
accordance with the Articles of Association. The number of directors, their term and their
remuneration are determined by the general meeting of shareholders and the maximum
term of directors’ appointment at each election is six years according to Luxembourg law,
however directors may be re-appointed after such term.
The members of the Board of Directors undertake regular training on topics such as
regulatory and legal updates, sector-specific and capital markets subjects and ESG matters.
Annual General Meeting
The Annual General Meeting of the shareholders of Aroundtown SA (“AGM”) was held
on June 26, 2024 in Luxembourg. All items on the agenda were carried by a majority,
including the approval of the statutory annual accounts of the Company and the
consolidated financial statements of the Group for the year ended December 31, 2023.
The next Annual General Meeting of the shareholders is intended to take place on June
24, 2025 in Luxembourg.
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Members of the Board of Directors
The Annual General Meeting in 2023 approved the renewal of the mandates of all the
directors until the Annual General Meeting 2025.
Senior and Key Management
Advisory Board
The Board of Directors has established an Advisory Board to provide expert advice and
assistance. The Board of Directors decides on the composition, tasks and term of the
Advisory Board as well as the appointment and dismissal of its members. The Advisory
Board has no statutory powers under the Luxembourg Companies Act or the Articles
of Association, but applies rules adopted by the Board of Directors. The Advisory Board
and its members are an important source of guidance for the Company when making
strategic decisions.
Audit Committee
The Board of Directors has established an Audit Committee in order to maintain high
corporate governance and transparency standards as well as to provide guidance to
the Board in fulfilling the Board’s responsibilities to the Company and its shareholders
regarding the integrity of the accounting and financial process, internal control and
risk management. The responsibilities of the Audit Committee include monitoring the
integrity of the financial statements, including reporting to the Board of Directors on
its activities and the adequacy of internal systems controlling the financial reporting
processes andthe accounting processes, including reviewing accounting standards.
The Audit Committee recommends to the Board of Directors the appointment and
replacement of the approved independent auditor and provides guidance to the Board
of Directors on the approval of the annual financial statements of the Group and, in
particular, shall monitor the independence of the approved independent auditor, the
additional services rendered by such auditor, the issuing of the audit mandate to the
auditor, the determination of auditing focal points and the fee agreement with the
auditor. The Board of Directors decides on the composition, tasks and term of the
Audit Committee as well as the appointment and dismissal of its members. The Audit
Committee consists of the independent directors, Mr. Markus Kreuter (Chairperson), Mr.
Markus Leininger, Mr. Daniel Malkin and Ms. Simone Runge-Brandner.
Risk Committee and Risk Officer
The Board of Directors has established a Risk Committee to maintain high corporate
governance and transparency standards as well as to provide guidance to the Board in
fulfilling the Board’s responsibilities to the Company and its shareholders. The Committee
shall monitor the effectiveness and adequacy of the internal control system and risk
management system. The Committee is tasked with assisting and providing advice and
recommendations to the Board of Directors in fulfilling its oversight responsibilities
relating to identification of different types of risks, recommending a risk management
Name
Position
Mr. Frank Roseen
Executive Director
Ms. Jelena Afxentiou
Executive Director
Mr. Ran Laufer
Non-Executive Director
Mr. Markus Leininger
Independent Director
Ms. Simone Runge-Brandner
Independent Director
Mr. Markus Kreuter
Independent Director
Mr. Daniel Malkin
Independent Director
Name
Position
Mr. Barak Bar-Hen
Co-CEO and COO
Mr. Eyal Ben David
CFO
Mr. Oschrie Massatschi
CCMO (Chief Capital Markets Officer)
(until December 31, 2024)
Ms. Limor Bermann
CSO (Chief Sustainability Officer)
Name
Position
Dr. Gerhard Cromme
Chairperson of the Advisory Board
Mr. Yakir Gabay
Advisory Board Deputy Chairperson
Mr. Claudio Jarczyk
Advisory Board Member
Mr. David Maimon
Advisory Board Member
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structure including its organization and its process as well as assessing and monitoring
the effectiveness of existing risk management systems. The Risk Committee is supported
by the Risk Officer, who brings a systematic and disciplined approach to evaluating and
improving the culture, capabilities, and practices integrated with strategy-setting and
execution. The Risk Officer’s responsibilities are determined and monitored by the Risk
Committee, whose oversight is established pursuant to the Rules of Procedure of the
Risk Committee. The Risk Committee provides advice on compliance actions, in particular,
by reviewing the Group’s procedures to detect risk, assessing the effectiveness of the
Group’s risk management and internal control system, and by assessing the scope and
effectiveness of the systems established by the Company in order to identify, assess and
mitigate risks. The Board of Directors decides on the composition, tasks and term of the
Risk Committee and the appointment and dismissal of its members. The members of
the Risk Committee are Mr. Markus Kreuter (Chairperson), Ms. Simone Runge-Brandner,
Mr. Ran Laufer and Mr. Daniel Malkin.
Internal Controls and Risk Management Systems
The Group closely monitors and manages any potential risk and sets appropriate
measures in order to mitigate the occurrence of any possible failure to the extent
possible. The Board has allocated duties and responsibilities regarding internal control
and risk management systems to both the Audit Committee and the Risk Committee.
These committees work closely together to ensure the effectiveness of the risk
management system. The
Risk Committee constructs the risk management structure,
organization and processes. The Risk Committee also monitors the effectiveness of
risk management functions throughout the organization, ensures that the required
infrastructure, resources and systems are in place for risk management and are adequate
to maintain a satisfactory level of risk management discipline. The Group categorizes
the risk management systems into two main categories: internal risk mitigation and
external risk mitigation.
The internal controls and compliance of the Group are supervised by the Risk and Audit
Committees and is supported by Mr. Christian Hupfer, the Chief Compliance Officer.
Internal Risk Mitigation
Internal controls are constructed from five main elements:
» Risk assessment – set by the Risk Committee and guided by an ongoing analysis of
the Group’s organizational structure and existing risks in order to identify and minimize
potential weaknesses. Further, the Risk and Audit Committees assess control deficiencies
in the organization and execute on issues which have been identified that
may have an
impact on the risk management framework.
» Control discipline – based on the organizational structure and supported by employee
and management commitments. The discipline is established on the foundations of
integrity and ethical values.
» Control features – the Group sets physical controls and undertakes compliance
checks and verifications including cross departmental checks. The Group puts strong
emphasis on separation of duties as approval and payments are done by at least two
separate parties. Payment verifications are cross checked and confirmed with budget and
contracts. Any payment exceeding a certain set threshold amount requires additional
approval by the head of the department as a condition for payment.
» Monitoring procedures – the Group monitors and tests unusual entries, mainly through
a detailed monthly actual vs. budget analysis and checks. Strong and sustainable control
and organizational systems reduce the probability of errors and mistakes significantly.
The Company’s management sees a high degree of importance in constantly improving
all measures, adjusting to market changes and organizational dynamics.
» ESG-risk-related expenditures – the Group has included identification of potential
financial liabilities and future expenditures linked to ESG risks in the organizational
risk assessment. Potential future expenditures on ESG matters and opportunities are
included in the financial budget.
Compliance, Code of Conduct, Diversity Policy, Data Protection and
Information & Cyber Security
Safeguarding the Group from any reputational damage due to error or misconduct
is essential in maintaining the Group’s reputation. Therefore, enforcing responsible
behavior guided by integrity is a central tool for the management in terms of its dealings.
For this reason, the compliance and risk management teams are structured accordingly
and supplemented by
procedures which cover all steps of real estate investment and
the management chain to ensure compliance. In order to stipulate ethical behavior
throughout its operations, Aroundtown has implemented Codes of Conduct into both
employment contracts and business partners contracts which incorporate policies that
prevent compliance violations and misconducts. These policies include for example
the Anti-Corruption Policy, Diversity Policy and Anti-Discrimination Policy,
as well
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as measures to prevent human right violations and ensure data protection and the
Company’s Whistleblowing Policy.
The Group has agreed on binding standards to achieve an ethical business conduct
within its Group, its employees and other personnel in order to expressly distance
itself from corrupt behaviors and unethical business practices. Such principles shall
also be explicitly acknowledged by its business partners. The Code of Conduct for
Business Partners, which is mandatory for Aroundtown’s business partners, includes
elements such as respecting and recognizing employees’ rights pertaining to freedom
of association and the exercise of collective bargaining, providing fair remuneration in
wages, refraining from child, forced and compulsory labor, respecting the minimum age
requirements within given countries and providing a workplace free of harassment and
discrimination of any kind.
The Code of Conduct for Employees is supplemented by topical guidelines as well
as
the Diversity Policy and Anti-Discrimination Policy. The Group’s Diversity Policy
promotes a fair and inclusive workplace culture, advancing equal opportunities and
eliminating discrimination. The diversity of perspectives from differences in nationality,
ethnicity, race, culture, age, gender, religion, ideology, sexual identity, physical ability,
or other personal attributes are all respected. Discrimination on the basis of any of
these characteristics constitutes an infringement of basic human rights and is explicitly
prohibited throughout the Group. Additionally, Aroundtown is a signatory of the “Diversity
Charter
(Charta der Vielfalt)
, a corporate initiative to promote diversity in companies
and institutions. The implementation and integration of diversity initiatives across the
organization is overseen by the Diversity Committee. The Diversity Policy is accessible to
all employees via the Company's website and intranet. Regular assessments and reports
are conducted to ensure transparency and accountability. Employees are encouraged to
participate in diversity training programmes to foster a more inclusive environment.
Aroundtown is committed to the representation of women on the board of directors
and ensuring a diverse mix of professional backgrounds and expertise. Board members
are selected based on multiple years of experience in the real estate sector and other
relevant industries. In 2024, women held 33% of management positions across the
Group, compared to 35% in 2023. As of December 31, 2024, women held two of the
seven positions on the Board of Directors. Further details about the Group’s diversity
management and key figures can be found in its sustainability reporting materials.
In addition to these general requirements, the Group also promotes diversity in many
different areas, such as a professional and cultural background and talent pool. The
commitment to diversity is guided by the Diversity Committee, which is created and
operated by employees, has implemented a diversity training program during the
orientation period for new employees.
The Group
has instruments in-place to prevent and fight violations of laws, such as
human rights violations, corruption and bribery, and employees have reporting channels
available in case of a possible violation. Measures are dealt with in confidence to the
full extent permitted by statutory law. Reported issues are investigated by the Chief
Compliance Officer. In addition to the reporting channels, there is also a whistleblowing
channel operated by an external service provider which enables complete anonymity.
If any violation is determined, certain disciplinary measures are taken if preconditions
in that respect are met.
The Company´s Code of Conduct includes the prohibition of insider dealing. The
Company is subject to several obligations under Regulation (EU) No. 596/2014 (Market
Abuse Regulation, “MAR”). Pursuant to Article 19 para. 5 sub-para. 1 sentence 1 of
MAR, the Company notifies all persons discharging managerial responsibilities of their
obligations in the context of managers’ transactions. Memorandums, notifications and
information are distributed regularly.
The Group has established procedures to protect the confidentiality and integrity of
management information and data across all business process. Furthermore, with a
view to the implementation of the EU General Data Protection Regulation (GDPR),
the Group has implemented a wide variety of guidelines and procedures, including
enhanced mandatory awareness training on GDPR. The Group has implemented Standard
Operating Procedures (SOPs) to ensure that all personal data stored and processed in
the course of the Group’s operations are safe from manipulation and misuse. Additionally,
the Group has adopted an information security and privacy strategy in order to maintain
a high level of controls to help minimize the potential risks. The Codes of Conduct for
employees as well as business partners can be found on AT’s website.
External Risk Mitigation
In the ordinary course of business, the Group is exposed to various external risks. The
Risk Committee continuously determines whether the requisite infrastructure, resources
and systems are in place and adequate to maintain a satisfactory level of risk. The
potential risks and exposures are related, inter alia, to the volatility of interest rate risk,
inflation risk, liquidity risk, credit risk, regulatory and legal risks, rent collection and
tenant deficiencies, the need for unexpected capital investments, property damage risk
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and market downturn risk. The Group has direct and specific measures and boundaries
to address and mitigate each risk, hedging and reducing to a minimum the occurrence
of failure or potential default.
For information regarding Aroundtown’s risk management objectives and policies, see
Note 25.3
. (Risks management objectives and policies).
Nomination Committee
The Board of Directors has established a Nomination Committee in order to identify
suitable candidates for directorships and certain management positions and to assess
the skills and characteristics of proposed candidates. The Nomination Committee
consists of the Independent Directors, Mr. Markus Leininger, Mr. Markus Kreuter, Ms.
Simone Runge-Brandner and Mr. Daniel Malkin.
Remuneration Committee
The Board of Directors has established a Remuneration Committee in order to determine
and recommend to the Board the Remuneration Policy, which outlines remuneration metrics
for the Executive Directors and members of Senior Management, including evaluation of
short-term and long-term performance-related remuneration to senior executives. The
Remuneration Committee consists of the Independent Directors, Mr. Daniel Malkin, Mr.
Markus Leininger, Mr. Markus Kreuter (Chairperson) and Ms. Simone Runge-Brandner.
ESG Committee
The Board of Directors has established an ESG Committee to supervise the Company´s
ESG processes. In addition, the Committee reviews and assesses the Company’s
contribution to sustainable development. The ESG Committee consists of executive
director Mr. Frank Roseen and independent directors, Mr. Markus Leininger (Chairperson)
and Mr. Markus Kreuter, and is assisted by non-voting advisory members who hold key
positions in the Group as well as the Sustainability Department.
Shareholders’ Rights
The Group respects the rights of all shareholders and ensures that they receive equal
treatment. All shareholders have equal voting rights and all corporate publications are
transmitted through general publication channels as well as on a specific section on its
website. The shareholders of Aroundtown SA exercise their voting rights at the general
meeting of the shareholders, whereby each share is granted one vote. The voting rights
attached to shares held by TLG Immobilien AG in Aroundtown SA are suspended. The
suspension of the voting rights also applies to shares held and/or acquired by Aroundtown
SA, either directly or through subsidiaries, pursuant to its share buy-back programme
(currently inactive). The Annual General Meeting of the shareholders takes place at such
place and time as specified in the notice of the meeting. At the Annual General Meeting
of the shareholders, Board of Directors presents, among other items, the directors’ report
as well as the consolidated financial statements of the most recent financial year to
the shareholders. The Annual General Meeting resolves, among others, on the financial
statements of Aroundtown, the appointment of the approved independent auditor of the
Group and the discharge and appointment or re-election of the members of the Board of
Directors, in case their mandate is about the expire.
Compliance with the transparency law
The Company is committed to adhering to best practices in terms of corporate governance
by applying, among others, rules arising from the Luxembourg law of 11 January 2008 on
transparency requirements for issuers, as amended (the
“Transparency Law”
).
In particular, the Company continuously monitors compliance with the disclosure
requirements with respect to regulated information within the meaning of article 1 (10)
(the
“Regulated Information”
) of the Transparency Law and therefore publishes and stores
with the Luxembourg Stock Exchange as the officially appointed mechanism (OAM) and
files with the Commission de Surveillance du Secteur Financier (the
“CSSF”
) the Regulated
Information on an ongoing basis.
The quarterly, half-yearly and annual financial reports, investor presentations, press
releases and ad-hoc notifications are available in the English language on the Company’s
website. In addition, the Company provides on its website information about its
organization, its management and upcoming and past shareholder meetings, such as its
annual general meetings. The Company´s website further provides a financial calendar
announcing the financial reporting dates as well as other important events. The financial
calendar is published before the beginning of a calendar year and is regularly updated.
The individual Aroundtown SA financial statements are published annually on the same
day as the Aroundtown SA consolidated annual report.
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Information according to article 11 (2) of the Luxembourg Takeover Law
The following disclosure is provided pursuant to article 11 of the Luxembourg law of
19 May 2006 transposing Directive 2004/25/ EC of the European Parliament and of the
Council of 21 April 2004 on takeover bids, as amended (the “Takeover Law”):
a)
With regard to article 11 (1) (a) and (c) of the Takeover Law (capital structure), the
relevant information is available in Note
19
. (Total equity) of this consolidated annual
report. In addition, the Company’s shareholding structure showing each shareholder
owning 5% or more of the Company’s share capital is available in the below table
and on the Company’s website, where the shareholding structure is updated as per
shareholder notifications on a regular basis.
b)
With regard to article 11 (1) (b) of the Takeover Law, the ordinary shares issued by
the Company are admitted to trading on the regulated market of the Frankfurt Stock
Exchange (Prime Standard) and are freely transferable according to the Articles of
Association.
c)
In accordance with the requirements of Article 11 (1) c of the Takeover Law, the
following significant shareholdings were reported to the Company until December
31, 2024:
d)
With regard to article 11 (1) (d) of the Takeover Law, each ordinary share of the
Company gives right to one vote according to article 8.1 of the Articles of Association.
There are no special control rights attaching to the shares. The voting rights attached
to shares held by TLG Immobilien AG in the Company are suspended. The suspension of
the voting rights applies to any other shares acquired by the Company, either directly
or through subsidiaries, pursuant to its buy-back programme.
e)
With regard to article 11 (1) (e) of the Takeover Law, control rights related to the
issue of shares are directly exercised by the relevant employees. The key terms and
conditions in relation to the Company’s incentive share plan are described on page
in Note 20. (Share-based payment agreements) of this consolidated annual report.
f)
With regard to article 11 (1) (f) of the Takeover Law, the Articles of Association impose
no voting rights limitations. However, the sanction of suspension of voting rights
automatically applies, subject to the Transparency Law to any shareholder (or group
of shareholders) who has (or have) crossed the thresholds set out in the Transparency
Law but have not notified the Company accordingly. In this case, the exercise of voting
rights relating to the shares exceeding the fraction that should have been notified is
suspended. The suspension of the exercise of voting rights is lifted the moment the
shareholder makes the notification.
g)
With regard to article 11 (1) (g) of the Takeover Law, as of December 31, 2024, the
Company was not aware of any agreements between shareholders that would lead to
a restriction on the transfer of shares or voting rights.
h)
With regard to article 11 (1) (h) of the Takeover Law, according to article 15.1 of the
Articles of Association, the members of the board of directors of the Company (the
“Board”
) shall be elected by the shareholders at their annual general meeting by
a simple majority vote of the shares present or represented. The term of the office
of the members of the Board shall not exceed six years, but they are eligible for
re-election. Any member of the Board may be removed from office with or without
specifying a reason at any time. In the event of a vacancy in the office of a member
of the Board because of death, retirement or otherwise, this vacancy may be filled
out on a temporary basis until the next meeting of shareholders, by observing the
applicable legal prescriptions. Further details on the rules governing the appointment
and replacement of a member of the Board are set out in the Articles of Association
of the Company. According to article 14 of the Articles of Association, any amendment
to the Articles of Association made by the general meeting of shareholders shall be
adopted if (i) more than one half of the share capital is present or represented and
Shareholder name
Amount of Shares
1)
Percentage of voting rights
Aroundtown SA and its wholly
owned affiliates
259,495,926
16.88%
2)
Avisco Group PLC /Vergepoint
Limited
3)
230,660,516
15.01%
TLG Immobilien AG
183,936,137
11.97%
2)
Stumpf Capital GmbH
4)
154,351,365
10.04%
1) Total number of Aroundtown SA shares as of December 31, 2024: 1,537,025,609
2) Voting rights are suspended
3) Controlled by Yakir Gabay
4) Controlled by Georg Stumpf
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45
(ii) a majority of at least two-thirds of the votes validly cast are in favour of adopting
the resolution. In case the first condition is not reached, a second meeting may be
convened, which may deliberate regardless of the proportion of the share capital
represented and at which resolutions are taken at a majority of at least two-thirds of
votes validly cast.
i)
With regard to article 11 (1) (i) of the Takeover Law, the Board of Directors is endowed
with wide-ranging powers to exercise all administrative tasks in the interest of the
Company including the establishment of an Advisory Board, an Audit Committee, a
Risk Committee, a Remuneration Committee and a Nomination Committee. Further
details on the powers of the Board are described on pages 40-44 of this consolidated
annual report.
Pursuant to article 7.2 of the Articles of Association, the Board is authorized to issue
shares under the authorised share capital as detailed in Note 19.1.1. (Share capital)
and Note 20. (Share-based payment agreements) of this consolidated annual report.
According to article 8.7 of the Articles of Association, the Company may redeem its own
shares to the extent and under the terms permitted by law. The shareholders’ meeting
held on 26 June 2024 re-authorized the Company’s buy-back program to buy-back, either
directly or through a subsidiary of Aroundtown, shares of Aroundtown for a period of five
(5) years not exceeding 50% of the aggregate nominal amount of Aroundtown’s issued
share capital. The program is currently inactive.
j)
With regard to article 11 (1) (j) of the Takeover Law, the Company’s listed straight
bonds, perpetual notes and security issuances (listed in Note 19.1., Note 19.2. and Note
21.3.) under the EMTN programme contain change of control provisions that provide
noteholders with the right to require the Company to repurchase their notes upon a
change of control of the issuer. The Company’s ISDA master agreement securing derivate
transactions with regard to its listed debts contains a termination right if the Company
is financially weaker after a takeover.
k)
With regard to article 11 (1) (k) of the Takeover Law, there are no agreements between
the Company and members of the Board or employees according to which, in the event
of a take-over bid, the Company may be held liable for compensation arrangements if
the employment relationship is terminated without good reason or due to a takeover bid.
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Berlin
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47
Consolidated
Sustainability
Statement
Aroundtown S.A (“Aroundtown”, “AT” or“ the Group”) has assessed whether the relevant
sustainability topics are material. For any material topics identified, AT provides
information on the assessed matters, their integration into the business model
and strategy, related policies, actions taken, progress towards targets, and relevant
metrics. The Consolidated Sustainability Statement have been prepared in a context
of new sustainability reporting standards requiring entity-specific and temporary
interpretations and addressing inherent measurements of evaluation uncertainties.
AT has decided to apply the phase-in provisions in accordance with Appendix C of
ESRS 1. AT is committed to a full disclosure of these data points in the coming years,
as required. The sustainability information and related disclosures for the year ended
31 December 2023 have not been subject to assurance procedures.
BP-1 - Basis for Preparation of Consolidated Sustainability Statement
Aroundtown has prepared this Consolidated Sustainability Statement for the reporting
year 2024 in compliance with the European Sustainability Reporting Standards
(“ESRS”), as mandated by the Corporate Sustainability Reporting Directive (“CSRD”).
In alignment with these requirements, the Group adheres to key reporting principles,
ensuring that its disclosures are relevant, comparable, verifiable, and understandable,
while providing a faithful representation of its sustainability performance.
Integration of Data and Governance in Reporting
The preparation of this Consolidated Sustainability Statement integrates both
qualitative and quantitative data collected from across AT’s operations as well as
upstream and downstream value chain data. The reporting process is closely aligned
with financial reporting procedures and governance frameworks, ensuring consistency
and accuracy in disclosures. Input is gathered from internal stakeholders, including
the ESG Committee and the Sustainability Department, while indirect feedback from
external stakeholders, such as investors and business partners, is also considered. The
Sustainability Department is responsible for overseeing data collection and verification,
General Information
ESRS 2 General Disclosures
High-level overview of disclosure
Standard
Indicator
ESRS 2 General
Disclosures
BP-1 – General basis for preparation of the Consolidated
Sustainability Statement
BP-2 – Disclosures in relation to specific circumstances
GOV-1 – The role of the administrative, management and
supervisory bodies
GOV-2 – Information provided to and sustainability matters
addressed by the undertaking’s administrative, management and
supervisory bodies
GOV-3 – Integration of sustainability-related performance in
incentive schemes
GOV–4 - Statement on due diligence
GOV–5 - Risk management and internal controls over sustainability
reporting
SBM-1 – Strategy, business model and value chain
SBM-2 – Interests and views of stakeholders
SBM-3 - Material impacts, risks and opportunities and their
interaction with strategy and business model
IRO-1 - Description of the process to identify and assess material
impacts, risks and opportunities
IRO-2 – Disclosure Requirements in ESRS covered by the
undertaking’s Consolidated Sustainability Statement
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Consolidated Sustainability Statement
49
while the ESG and Audit committees conduct a high-level review for quality assurance
and best practices in ESG reporting. Additionally, they approve the final report,
reinforcing the governance structure that supports the sustainability reporting process.
Scope of Consolidation and Reporting Boundaries
The scope of consolidation for this Consolidated Sustainability Statement mirrors
that of AT’s consolidated financial statements, in accordance with International
Financial Reporting Standards (“IFRS”). However, disclosures under ESRS E1 (Climate
Change), specifically regarding Scope 1, 2, and 3 greenhouse gas (“GHG”) emissions
and energy consumption, follow an operational control approach, as defined by the
GHG Protocol and as opposed to the ESRS specific requirements for a company to
follow when determining its GHG organizational boundary [ESRS E1.46, AR40, ESRS
1.62], discussed in more detail in the second paragraph of subsection E1-6. This means
that only assets and operations under AT’s direct operational control are included in
these disclosures. For all other sustainability-related data, the scope aligns fully with
the financial consolidation framework, ensuring transparency and consistency across
reporting structures. For the reporting year 2024, no subsidiaries within AT’s financial
consolidation scope have been exempted from individual or sustainability reporting.
Additionally, the Consolidated Sustainability Statement extends beyond the Group’s
direct operations—except for GHG emissions and energy consumption data—to reflect
material sustainability impacts, risks, and opportunities across its upstream and
downstream value chain
y
Upstream
activities
encompass
deal
sourcing,
due
diligence,
financing
arrangements, procurement of materials and services, property management, asset
management, marketing and leasing, ESG compliance and risk management, as
well as refurbishment and development.
y
Downstream activities encompass consolidated reporting, investor relations, exit
strategies, asset sales, and interactions with real estate brokers.
The Group’s value chain also incorporates key suppliers, contractors, and service
providers, such as construction and maintenance personnel, who are required to
comply with AT’s Code of Conduct for Business Partners and undergo periodic risk
assessments. Due diligence processes and structured ESG questionnaires help monitor
adherence to sustainability standards across the supply chain. Additionally, the impact
of tenants is reflected in Scope 3 GHG emissions reporting, ensuring that the Group
captures indirect environmental influences.
Disclosure of Intellectual Property and Developments under Negotiation
Aroundtown has not exercised the option to omit specific information related to
intellectual property, know-how, or results of innovation. All relevant disclosures,
including those pertaining to technological innovations in energy efficiency and
tenant engagement platforms, have been fully incorporated into this statement to
maintain transparency.
Similarly, the Group has not made use of exemptions under articles 19a(3) and 29a(3)
of Directive 2013/34/EU, which allow for the omission of disclosures on impending
developments or matters under negotiation. All materially relevant developments,
including those associated with technological advancements and sustainability
initiatives, have been disclosed in this Consolidated Sustainability Statement, further
reinforcing AT’s commitment to transparency in its ESG reporting.
BP-2 – Disclosures in Relation to Specific Circumstances
Aroundtown applies the same short, medium, and long-term time horizons as those
defined under ESRS 1, article 6.4. This alignment ensures consistency in sustainability
reporting, facilitating comparability across disclosures while maintaining transparency
in how sustainability risks and opportunities are assessed over time.
In relation to metrics that incorporate value chain data, certain sustainability
performance indicators—particularly those related to energy consumption in tenant
operations and supplier compliance with ESG standards—are based on estimates
derived from indirect sources. These estimates are obtained through supplier
reports, industry averages, and benchmarking studies, ensuring a comprehensive
representation of sustainability impacts across AT’s upstream and downstream value
chain. The methodology used for these estimations is outlined in the relevant sections
of this Consolidated Sustainability Statement, ensuring clarity and transparency in
reporting.
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Consolidated Sustainability Statement
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Table 1
Metrics
Including Value
Chain Data
Estimations
Description
Description of Basis for Preparation of Metrics That Include Value Chain
Data Estimated Using Indirect Sources
Description of the Level of Accuracy of Estimations and Planned
Actions to Improve Accuracy in Future of Metrics That Include
Value Chain Data Estimated Using Indirect Sources
E 1-6_AR 46i
Scope 3 Category
13 GHG emissions
calculations
Measured landlord-obtained energy consumption data in buildings without smart
metering is allocated to tenants using an estimation approach, which is a source
of uncertainty. Additionally, variations in tenant behavior, time-of-use patterns, and
energy use in common areas are difficult to account for without accurate data. The
Group thus relies on estimation approaches to allocate consumption to tenant
areas outlined in the
Landlord and Tenant Boundaries
subsection of section E1-6.
There are instances where estimations are required in light of missing Energy
Performance Certificates (“EPCs”) as outlined in the
Estimation of Utility Consumption
subsection of the E1-6 section.
Regarding tenant-obtained electricity, legal data protection barriers prevent
landlords from accessing information falling under direct contracts between tenants
and utilities. As such, the Group once again must rely on generalized assumptions
used in estimations outlined in the Landlord and Tenant Boundaries subsection of
section E1-6.
Additionally, the slow smart meter installation by grid operators outlined in the
Landlord and Tenant Boundaries
subsection of section E1-6 is another source of
uncertainty.
In instances where available heating data is not representative for the full
reporting year, estimations were calculated as outlined in the
Estimation of Utility
Consumption Consumption
subsection of section E1-6.
The Group is simultaneously pursuing several actions to improve
data collection, with some being intermediary solutions while
others are longer-term actions. This involves semi-automated data
collection technologies for property managers, non-invasive digital
measurement instruments on main and submeters that work in real-
time and working to receive data digitally from larger-scale energy
suppliers.
The Group is also exploring data-scraping solutions to take data
directly from invoices, however the challenges from the billing
systems mentioned here have yielded limited success thus far.
E1-1 14
Disclosure of
Transition Plan
for Climate
Change
Mitigation
Climate factors
used to estimate
future heating
demand
The German National Meteorological Service (“DWD”) does not publish projected
climate factors for future years, since this is rather a dataset of historical data
for specific locations in Germany. To estimate climate factors for the future year
2030, the 2024 climate factor is multiplied by a factor of 1.02 in order to assume
a general 2% increase in temperature levels. Assumption on future conditions
reflected in the climate factors are based on internal analyses of trends observed
in historical data.
Due to the two-month lag on publication of climate factor data and accelerated
reporting timelines, the full reporting year cannot always be used in each report, as
explained in the
Estimation of Utility Consumption
subsection of section E1-6.
The Group considers its estimated future climate factors to be reasonably
accurate as historical data is the best basis for deriving assumptions given
the lack of future climate factors. The Group will continue to monitor
available data in case better data sources can be identified.
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Consolidated Sustainability Statement
51
Disclosure of Quantitative Metrics and Monetary Amounts Disclosed That Are Subject to High Level of Measurement Uncertainty
Metrics affected by high levels of measurement uncertainty are:
External Validation of Measurement Metrics
Aroundtown received validation by an external body of its Information Security
Management System with an ISO 27001 certification, and our Customer Service
Centre holds a TÜV certification for both Quality Management and Service Quality.
Adherence to Additional Sustainability Standards and Reporting
Frameworks
In addition to the ESRS, Aroundtown integrates information from other widely
recognized sustainability reporting frameworks and industry best practices. This
ensures that its Consolidated Sustainability Statement remains comprehensive and
aligned with stakeholder expectations. Specifically, AT’s reporting incorporates:
Table 2
Quantitative Metric and Monetary
Amount Subject to High-Level of
Measurement Uncertainty
Description
Source of Measurement Uncertainty
Assumptions, Approximations, and Judgements Made in
Measurement
E1-6 AR 43-45
Scope 1 and 2 GHG
Emissions calculations
AT primarily tracks floor area of its assets in the form of Net
Lettable Area (“NLA”) based on areas demarcated in lease
contracts, meaning that common areas in assets are not
precisely known.
In some cases, measured data for the full reporting year
were not fully available in time for publication for the same
reasons regarding the utility invoicing practices referenced in
the
Landlord and Tenant Boundaries
subsection of section E1-6.
For a small proportion of properties within the operational
control portfolio, EPCs are not available, as outlined in the
Estimation of Utility Consumption
subsection of section E1-6.
Assumptions relating to the asset-type-specific ratios used to
estimate Gross Floor Area (“GFA”) discussed in
Landlord and
Tenant Boundaries
subsection of section E1-6.
In instances where available heating data is not representative
for the full reporting year, estimations were calculated as
described in the
Estimation of Utility Consumption
subsection
of section E1-6.
In the case of missing EPCs, EPC-estimated calculations are
conducted as described in the
Estimation of Utility Consumption
subsection of section E1-6.
The proportions of estimated data are disclosed on Tables
17 and 18 found in the discussion in section E1-5, Energy
Consumption and Mix.
y
The Sustainability Best Practices Recommendations (“sBPR”) of the European
Public Real Estate Association (“EPRA”), which provide sector-specific sustainability
metrics relevant to real estate.
y
The Task Force on Climate-related Financial Disclosures (“TCFD”), ensuring that
climate-related risks and financial impacts are effectively communicated in line
with global best practices.
List of DRs and DPs Incorporated by Reference
Aroundtown’s Consolidated Sustainability Statement incorporates Disclosure
Requirements and Data Points from other sections in the Consolidated Annual
Report 2024 of Aroundtown:
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Consolidated Sustainability Statement
52
GOV-1 – The Role of the Administrative, Management and
Supervisory Bodies
Composition of the Board of Directors
Aroundtown is administered by a Board of Directors (“the Board”) vested with
the broadest powers to perform and manage in the Group’s interest. All powers
not expressly reserved by the Luxembourg Companies Act or by the articles of
association to the general meeting of the shareholders fall within the competence
of the Board of Directors. On a regular basis, the Board evaluates the effective
fulfilment of their remit and compliance with corporate governance procedures
implemented by the Group.
As of 2024, the Board of Aroundtown consists of two executive members, Mr. Frank
Roseen, and Ms. Jelena Afxentiou. In addition, the Board is composed of one non-
executive director and four independent directors:
Table 3
Disclosure
Requirement
Information
Reference
ESRS 2 GOV-3
Paragraph 29
The undertaking shall disclose
the following information about
the incentive schemes and
remuneration policies linked to
sustainability matters for members
of the undertaking's administrative,
management and supervisory bodies
The
Remuneration Policy
can be
found on the AT’s website under
the Corporate Governance section.
ESRS 2 SBM-1
Paragraph 40 a i
Significant groups of products
and/or services offered, including
changes in the reporting period
(new/removed products and/or
services)
Board of Directors’ Report
Section - Company Strategy and
Business model
Pages: 16-19.
ESRS 2 SBM-1
Paragraph 42
The undertaking shall disclose a
description of its business model
and value chain
Board of Directors’ Report
Section - Company Strategy and
Business model
Pages: 16-19.
y
Mr. Ran Laufer (Non-executive director)
y
Mr. Markus Leininger (Independent)
y
Ms. Simone Runge-Brandner (Independent)
y
Mr. Markus Kreuter (Independent)
y
Mr. Daniel Malkin (Independent)
Employee and Workforce Representation
While Aroundtown does not include direct employee representation within the
Board, structured mechanisms are in place to ensure employee engagement and
participation in governance processes. These consist of employee feedback channels,
compliance ambassadors, HR roundtables and annual Town Hall meetings. These
initiatives facilitate continuous dialogue with management, integrating workforce
perspectives into decision-making.
Board and Management Expertise
Aroundtown’s executive management (“Management Body”) consists of four members
who are responsible for the operational management of the Group. The Management
Body is entrusted with decisions and actions related to the day-to-day management
of the business, ensuring operational performance. This function is a complementary
role to the Board of Directors.
Aroundtown’s Management Body consists of:
y
Mr. Barak Bar-Hen – Co-Chief Executive Officer (“Co-CEO”) / Chief Operating Officer
(“COO”): Extensive experience in the real estate industry, having held leadership
positions in companies operating across Germany and Europe.
y
Mr. Eyal Ben David – Chief Financial Officer (“CFO”): Vast academic and professional
background in finance and banking, having held key leadership positions in Israel.
y
Ms. Limor Bermann – Chief Sustainability Officer (“CSO”): Extensive experience in
sustainability and corporate responsibility within the real estate sector in Germany,
as well as a strong background in leadership positions in Israel.
y
Mr. Oschrie Massatschi - Chief Capital Markets Officer (“CCMO”): Broad experience in
capital markets and real estate investment. Previously held leadership positions in
Germany, the UK and other international markets.
(*)
(*) Until 31 December 2024.
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Consolidated Sustainability Statement
53
The Board of Directors consists of seven members who collectively oversee the Group’s
strategic direction:
y
Mr. Frank Roseen (Director): Extensive experience in real estate, including real estate
investment and asset management, alongside finance, business management and
strategic planning having served in several executive positions and on the board of
many listed and multinational corporations in Europe and other continents.
y
Ms. Jelena Afxentiou (Director): Solid background in business management, public
relations and commerce with demonstrable expertise in real estate and finance
within the European market.
y
Mr. Ran Laufer (Non-Executive Director): Expert in business management and
strategic planning with significant experience in the real estate industry in Europe
and Israel.
y
Mr. Markus Leininger (Independent Director): Vast experience in finance, banking and
real estate, specializing in governance, risk management, and investment strategy,
with expertise in debt products, contributing to ESG strategy, corporate and financial
oversight. Led large-scale lending operations across Central and Eastern Europe.
y
Ms. Simone Runge-Brandner (Independent Director): Strong background in banking and
finance with expertise in real estate finance, business management and strategy in Europe.
y
Mr. Markus Kreuter (Independent Director): Real Estate Economist with experience in
commercial real estate lending, debt financing and advisory in Europe. His expertise
also spans business management and strategic planning, finance and banking, as
well as crisis and risk management. Additionally, he has gained significant experience
in IT, leading an ECSP-licensed digital real estate investment platform.
y
Mr. Daniel Malkin (Independent Director): Established background in investment
banking, in real estate investment, asset management, and finance in Europe and other
jurisdictions. In addition to business management, and strategic planning expertise.
As seen in the Board Competencies Matrix below, the outstanding areas of expertise
of our Board Members identified through a self-assessment questionnaire, includereal
estate, finance, banking or auditing, business management and strategic planning, and
international experience and cultural awareness. These competences are relevant for
their roles and responsibilities, supporting effective governance and strategic decision
making in the Group. Further details on Board members’ academic and professional
backgrounds are available in the Management section of the
AT website
.
In addition, the Board of Directors has established an Advisory Board to provide expert advice
and assistance. The Board of Directors decides on the composition, tasks and term of the
Advisory Board as well as the appointment and dismissal of its members. The Advisory Board
has no statutory powers under the Luxembourg Companies Act or the Articles of Association,
Competencies
Real Estate
Finance,
Banking or
Auditing
Business
Management
& Strategic
Planning
Crisis & Risk
Management
IT, Information&
Cyber Security
Environment &
Sustainability
International
Experience
& Cultural
Awareness
Merger &
Acquisition
Experience
Frank Roseen
Markus Kreuter
Markus Leininger
Ran Laufer
Jelena Afxentiou
Simone Runge-Brandner
Daniel Malkin
Basic
Proficient
Expert
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Consolidated Sustainability Statement
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y
Nomination Committee: Members: Mr. Markus Kreuter, Mr. Markus Leininger, Ms.
Simone Runge-Brandner and Mr. Daniel Malkin
Each Board committee’s responsibilities for sustainability oversight are defined in
their Rules of Procedure.
y
Audit Committee: Ensures financial integrity, risk management, and internal control
systems.
y
ESG Committee: Supervises ESG strategy, regulatory compliance, and sustainability
risk mitigation.
y
Risk Committee: Oversees the Group’s risk management framework, including
financial, operational, legal, and reputational risks.
y
Nomination Committee: Evaluates Board composition and succession planning.
y
Remuneration
Committee:
Aligns
executive
compensation
with
financial
performance and sustainability targets.
The Management Body is tasked with implementing Board-approved strategies and
ensuring compliance with sustainability objectives. Whereas the Co-CEO/COO oversees
the alignment of operations with sustainability goals, the CFO oversees impacts, risks
and opportunities from a financial perspective. The CSO ensures compliance with ESG
targets and integrates these into operational practices. The CCMO is responsible for
overseeing the Group’s capital market activities, financing strategies and maintaining
strong relationships with investors. In addition, senior management in operational
roles support the Management Body in the implementation of governance processes to
manage and oversee impacts, risks and opportunities.
The Board of Directors delegates responsibilities to its committees, which report back
to the Board on their activities. Each Committee meets as outlined in the relevant
rules of procedure, with meeting frequencies varying depending on committee. The
CSO reports to the Co-CEO/COO and the CFO, providing updates and informing the ESG
Committee. Additionally, the Co-CEO/COO and CFO report to the Board of Directors,
ensuring a clear flow of information and oversight within the management structure.
In addition, controls and procedures are integrated to the management of impacts,
risks and opportunities through firstly, compliance and legal monitoring (dedicated
controls and procedures): AT’s Compliance Department supports adherence to the
Group’s governance policies, mindful of applicable European regulations and national
laws. In the event of specific questions, these are addressed to the Legal Department.
Secondly, cross-functional collaboration (integration with other internal functions):
Aroundtown’s Sustainability, Energy, Operations, Construction, Compliance, Legal and
but applies rules adopted by the Board of Directors. The Advisory Board and its members are
an important source of guidance for the Group when making strategic decisions.
Board/Management Breakdown per Gender, Geographic Diversity
and Expertise
The following breakdown shows the percentage of members of the Board of
Directors and the Management Body with regards to:
y
Gender Diversity:
The composition of the Board and Management Body includes
73% male (8 members) and 27% female (3 members). The Board itself consists of
7 members, of whom five are male (71%) and two are female (29%). Geographic
Diversity: Members bring perspectives from, Germany, Luxembourg, the United
States, Italy and other international real estate markets.
y
Geographic Diversity:
Members bring perspectives from Germany, the Netherlands,
United Kingdom, Luxembourg, and other international real estate markets.
y
Expertise Diversity:
The Board and Management Body collectively have experience
in real estate operations, ESG governance, accounting, legal compliance, financial
risk management, finance, banking, auditing, trade, equity and capital markets,
mergers and acquisitions, and strategic planning
y
Percentage of Independent Members:
The percentage of independent members
on the Board is 57%, with four out of seven members classified as independent.
Oversight of Sustainability Risks, Impacts, and Opportunities
The Board, supported by its committees, is responsible for overseeing sustainability-
related risks, impacts, and opportunities. Following the most recent Annual General
Meeting prior to the publication of this report, the composition of the Board’s
committees was updated to include the following board members:
y
Audit Committee: Chair: Mr. Markus Kreuter | Members: Mr. Markus Leininger, Ms.
Simone Runge-Brandner and Mr. Daniel Malkin
y
ESG Committee: Chair: Mr. Markus Leininger | Members: Mr. Markus Kreuter, and Mr.
Frank Roseen
y
Risk Committee: Chair: Mr. Markus Kreuter | Members: Ms. Simone Runge-Brandner,
Mr. Ran Laufer and Mr. Daniel Malkin
y
Remuneration Committee: Chair: Mr. Markus Kreuter | Members: Mr. Markus
Leininger, Ms. Simone Runge-Brandner and Mr. Daniel Malkin
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Consolidated Sustainability Statement
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Risk Departments coordinate to address shared impacts and Energy, Operations and
Sustainability departments in particular collaborate closely regarding control of energy
and GHG emissions data, but also waste and water consumption from AT’s assets and
joint procedures regarding energy efficiency projects and retrofit planning.
Setting Sustainability Targets
The heads of departments are responsible for setting their own specific targets, as
well as monitoring the progress towards achieving them. The Management Body is
informed about these targets and their implementation regularly within a year during
management meetings. In addition, the ESG Committee oversees the sustainability
targets setting and the progress towards achieving them, ensuring alignment with
material impacts, risks and opportunities. The ESG Committee and the Board oversees
strategic guidance on ESG topics and is responsible for reviewing and assessing AT’s
responsible business strategy, policies and practices with respect to ESG topics. Progress
is monitored through reports which are presented to the Board at least twice a year.
Sustainability Expertise and Its Role in Governance
In general, Aroundtown places significant emphasis on ensuring that employees and
senior positions possess the relevant skills and expertise in sustainability matters,
taking into account the Group’s needs and existing knowledge in the departments. The
Nomination Committee assesses existing and required competencies for directorships,
as well as certain management positions and reviews whether the candidate possesses
the necessary skills, knowledge, and experience to fill the relevant role. It ensures
alignment with the Group’s interests and their recommendation vis-à-vis candidates
is then shared with the Board. If necessary, tailored training programs – whether
online or in-person formats – are implemented to further develop and maintain up-to-
date knowledge amongst Board Members, as well as senior management and senior
employees who deal with sustainability topics. In 2024, the Board received Group-
initiated training in the areas of Information Security and capital markets (in particular,
the EU Market Abuse Regulation).
The Board of Directors possesses expertise in risk management, ESG governance
in real estate and stakeholder engagement strategies, ensuring sustainability
considerations are embedded in the Group’s decision-making processes. In addition
to the Board, the ESG Committee is a key body that provides dedicated sustainability
expertise within AT’s governance structure. Next to the Board Members, the ESG
Committee also includes the CSO, Head of Energy, Chief Operations Officer of the
German operations, and the Group Head of Human Resources, all experienced leaders
and subject experts in their field. These leaders play an essential role in guiding
AT’s ESG strategy, compliance, and risk management. Their expertise ensures that
sustainability-related risks, impacts, and opportunities are identified, managed, and
integrated into corporate governance and operations.
The Board and ESG Committee leverage sustainability expertise across the organization
to enhance ethical risk management and drive AT’s long-term ESG objectives. Through
collaboration with department heads, the Board and ESG Committee are responsible for
identifying and addressing material impacts, risks, and opportunities, including:
y
Climate change mitigation strategies, such as GHG emissions reduction, renewable
energy adoption, and energy efficiency improvements across AT’s assets.
y
Corporate governance practices that uphold transparency, compliance, and ethical
conduct, thereby preventing risks related to mismanagement, bribery, corruption,
and ESG non-compliance.
y
Investor confidence and capital access, by ensuring that ESG performance aligns
with stakeholder expectations and regulatory frameworks.
y
Supplier relationship management, ensuring ESG due diligence is integrated into
procurement processes and partner engagements.
y
Workforce engagement and inclusion, promoting equal opportunities, ethical
business conduct, and safe working conditions.
By leveraging sustainability-related expertise, the Board and ESG Committee play a
critical role in ensuring that AT’s governance framework supports both financial and ESG
performance, fostering long-term operational resilience and stakeholder trust. For more
details on Board members’ skills and expertise, refer to GOV-1.
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ESG Governance Structure
Frank Roseen
Executive Director
Jelena Afxentiou
Executive Director
Ran Laufer
Non-Executive Director
Markus Leininger
Independent Director
Simone
Runge-Brandner
Independent Director
Markus Kreuter
Independent Director
Daniel Malkin
Independent Director
•
The ESG strategy is
managed by the Board of
Directors, which holds the
responsibility for overall
ESG performance
Board of Directors
•
Cross-departmental interface
•
Reviews and communicates sustainability programs
•
Responsibility for sustainability reporting
Sustainability Department
•
Responsible for
strict adherence to
compliance standards
•
Maintains level
of fair business
relationships with
suppliers
Compliance
Department
•
Responsible for energy
efficiency improvements
•
Implements climate
adaptation solutions
•
Ensures health and
safety standards follow
national laws
Operations &
Construction
Department
•
Develops energy
and carbon reduction
strategy
•
Implements
and tracks energy
projects and progress
Energy
Department
•
Responsible for
employee journey,
incl. well-being,
growth and
professional
development.
•
Implements diversity
and inclusion
initiatives
HR Department
•
Meets at least once a year on
ESG topics
•
Supervises the implementation
of sustainability programs
Management Body
Board Members:
Markus Leininger (Chairman), Markus Kreuter, Frank Roseen
Advisory Members:
Chief Sustainability Officer, Head of Energy,
Chief Operations Officer of the German operations, Group Head of HR
•
Meets at least twice a year
•
Strategic guidance on ESG
•
Responsible for reviewing ESG strategy
ESG Committee
Responsible for defining, implementing and tracking departments’ ESG targets
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GOV 2 – Information Provided to and Sustainability Matters Addressed by
the Undertakings Administrative, Management and Supervisory Bodies
The Board of Directors receives regular and structured updates on operational and
management matters, including sustainability-related impacts, risks, and opportunities.
These updates are provided by the Co-CEO/COO, who communicates the status and
progress of key initiatives. Additionally, the Board is kept informed about the activities
of its committees, including the content and frequency of their meetings.
The reporting frequency of Board committees varies depending on their specific duties and
Rules of Procedure. Some committees convene as needed, while others meet annually or
multiple times per year. The topics covered in these meetings include emerging risks, such
as climate transition risks, sustainability-driven investment opportunities and review and
approval of policies, actions, metrics, and targets, including compliance and sustainability-
related initiatives.
At the operational level, Management Body receives quarterly updates from department
heads, including the Chief of Sustainability, Head of Human Resources, Head of Energy
and Head of Compliance. In addition to scheduled updates, the Management Body
is also informed on an ad-hoc basis regarding pressing issues, ensuring real-time
responsiveness to sustainability-related challenges.
Integration of Sustainability Considerations in Decision-Making
Impacts, risks and opportunities are taken into consideration during in-depth analysis
of sustainability-linked topics, stakeholders engagement processes and subsequent
discussions by the Management Body and Board of Directors, based on reports from
Board Committees and senior management. Where necessary, strategy, operations and risk
management processes are adapted to address identified impacts, risk and opportunities.
The Group adopts a similar approach to ESG-related impacts, risks and opportunities
related, such as analysis of employee satisfaction and needs, and tenant satisfaction.
Furthermore, technical due diligences, with an increasing focus on sustainability-linked
topics, are carefully evaluated by senior management prior to major asset transactions.
No trade-offs associated with those impacts, risks and opportunities were considered.
Key Material Impacts, Risks, and Opportunities Addressed in 2024
In 2024, the Board of Directors and its committees addressed several material topics,
starting with a review of the Double Materiality Assessment (“DMA”) results and in-
depth discussions on impacts, risks and opportunities:
Material Impacts:
y
Climate Mitigation and Energy Efficiency: the Board of Directors and its committees
reviewed internal processes for managing the Energy Performance Certificate
Database. The aim was to optimize the process of identifying and prioritizing
energy-inefficient assets for improvement programs.
y
Climate Mitigation and Energy Efficiency and Air Pollution: the Board of Directors
and its committees reviewed the status of Green Building Certifications across
the portfolio. The purpose was to identify gaps and to identify assets that require
improvements in these areas.
y
Value chain impacts: amongst other activities, the Board of Directors and its
committees reviewed the approval of an updated Human Rights Policy to ensure
compliance with labor standards in the Code of Conduct for Business Partners.
Material Risks:
y
Regulatory risk: Updates on the EU Energy Performance of Buildings Directive and
its potential impact on high-priority assets (EPC F, G, H-rated properties).
y
Transition risk: Strategies for energy improvement across high-priority assets, including
progress on ongoing energy audits and their alignment with AT’s Transition Plan.
y
Climate risk: Ongoing physical and transition climate risk assessments affecting
property portfolios in Germany, the Netherlands and the UK.
Material Opportunities:
y
Employee engagement initiatives: Launch of the “Activate the Base” program, which
enables employees to develop and implement their own ESG projects.
y
Innovation and technology investment: Aroundtown, has launched the ATechX Accelerator
Program. Developed alongside venture capitals, ATechX recognizes, deploys and invests
in cutting-edge early-stage technologies that are shaping products and business models
within the real estate sector. Currently ATechX has onboarded six start-ups focusing on
different areas of the real estate business, including monitoring, controls, and AI-driven
building management systems. AT is currently piloting projects with these startups to
optimize energy consumption and identify savings potential.
y
Employer branding and talent attraction: AT aims to strengthen its position as
a top employer in the commercial real estate sector and has made significant
progress toward this goal in 2024.
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y
Tenant management improvements: Updates on tenant engagement strategies
and actions taken to enhance resident satisfaction.
GOV 3 – Integration of Sustainability-Related Performance in
Incentive Schemes
AT integrates sustainability-related performance metrics into its
Remuneration Policy
.
For details on AT’s Remuneration Policy, please refer to the Remuneration Policy
section on our
Corporate Governance page
. The incentive schemes at Aroundtown are
designed with the following characteristics:
y
Performance-Based Metrics: The variable components of remuneration are directly
linked to the achievement of sustainability-related targets. Further details of these
targets are provided below.
y
Scope of Inclusion: The remuneration policy applies to directors and Management
Body as defined in the below.
The Remuneration Policy includes four specific sustainability-related performance
targets as part of the incentive structure:
y
Variable Remuneration: Long-Term Incentive Program (LTIP):
1.
Sustainability Metrics: The Group aims to maintain or improve its score in at
least scoring criteria areas among its prioritized ESG ratings
(*)
in comparison to
the previous financial year.
2.
Gender Equality: The Group seeks to maintain or improve gender equality
metrics in comparison to the last year.
y
Variable Remuneration: Short-Term Incentive Program (STIP):
3.
Emission Reduction: Progress towards Scope 1 + 2 of the emission reductions, aligned
with the Group’s emission reduction pathway plan during the relevant financial year.
4.
Green Building Certification: shall be achieved though increasing the portion
(%) of buildings with green certification during the relevant financial year.
Sustainability-related performance metrics are incorporated as performance benchmarks in
Aroundtown’s Remuneration Policy through formalized policy integration. The Remuneration
Policy outlines specific ESG performance criteria and is approved by the Board of Directors.
For 2024, 30% of the variable short-term and 30% of the long-term remuneration for
members of Aroundtown’s Management Body and Executive Directors of the Board
individuals is directly tied to achieving sustainability-related targets. This proportion
reflects the strategic importance of ESG outcomes within Aroundtown’s overall
performance evaluation framework.
LTIP
y
Target 4, Corporate ESG Rating: 20% of LTIP Remuneration
y
Target 5, Gender Equality: 10% of LTIP Remuneration
STIP
y
Target 3, Emission Reduction: 15% of STIP remuneration
y
Target 4, Increasing portion of buildings with green certification: 15% of STIP
Remuneration
Following the conclusion of each fiscal year, the Group prepares a detailed Remuneration
Report as part of the materials distributed before the next Annual General Meeting. These
materials are prepared in accordance with Article 7 of the Luxembourg law of 24 May
2011, implementing the Shareholder Rights Directive II (EU) 2017/828. These reports
designate the specific percentages of variable remuneration based on either financial or
sustainability performance targets. The materials are published annually on the General
Meeting pages found under the Investor Relations web page in the Group’s website.
The terms of AT’s incentive schemes are approved and updated at the Board of Directors’
level, based on recommendations from the Remuneration Committee. This process ensures
alignment with Aroundtown’s strategic goals and adherence to governance best practices.
GOV 4 – Statement on Due Diligence
In the below table, we map core elements of our due diligence processes across
multiple sections of our Consolidated Sustainability Statement.
Table 4
Core elements of due diligence
Paragraphs in the Consolidated
Sustainability Statement
a.
Embedding due diligence in governance,
strategy and business model
ESRS 2 GOV-5, ESRS 2 SBM-1, ESRS 2 SBM-2
b. Engaging with affected stakeholders in all key
steps of the due diligence
ESRS 2 SBM-1, ESRS 2 SBM-2, S2.SBM-3, S2-4,
G1-2
c.
Identifying and assessing adverse impacts
S2.SBM-3, S2-1, S2-4, G1-2
d. Taking actions to address those adverse impacts
S2.SBM-3, S2-1, S2-4, G1-2
e.
Tracking the effectiveness of these efforts and
communicating
S2-4, S2-5, G1-2
(*) ESG ratings are third-party, independent assessments of a Company’s ESG performance and Aroundtown participates in
several such ratings..
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GOV 5 – Risk Management and Internal Controls over Sustainability
Reporting
Risk Management and Internal Controls Over Sustainability Reporting
Effective risk management and internal controls are integral to ensuring the
accuracy, transparency, and compliance of AT sustainability reporting. The Group has
established a structured framework that integrates sustainability-related risks within
its broader enterprise risk management system. This approach ensures that material
sustainability impacts, risks, and opportunities are identified, assessed, and effectively
mitigated, reinforcing the credibility and reliability of AT’s disclosures.
Framework for Risk Management and Internal Controls
Aroundtown has implemented a comprehensive internal control process to prevent risks
associated with sustainability reporting. This includes a multi-step review and approval
process to ensure data accuracy, proper oversight, and compliance with reporting
standards. Any information related to sustainability is first reviewed by the head of
the relevant department, followed by verification by the Sustainability Department,
which ensures that the content accurately reflects actual circumstances and prevents
misleading information. The Management Body conducts an additional review before
being presented to the ESG and Audit committees for final approval prior to publishing.
Beyond these procedural safeguards, AT’s risk management and internal control
framework encompasses:
y
Integration with Enterprise Risk Management: Sustainability risks are embedded in the
Group’s broader risk management framework, ensuring that sustainability considerations
are treated with the same level of oversight as financial and operational risks.
y
Governance Structure: Each department has designated individuals responsible for
their specific area, such as HR, Energy, and Compliance, ensuring clear accountability
in sustainability reporting.
y
Regulatory Monitoring and Compliance: The Sustainability Department and
Compliance Department continuously monitor regulatory updates through industry
groups, webinars, and external legal assessments to ensure that sustainability
reporting remains compliant with evolving standards.
y
Digital Tools and Technology: AT is currently reviewing software solutions to
enhance the tracking, documentation, and reporting of both qualitative and
quantitative sustainability data.
By embedding sustainability risks within its enterprise-wide governance and internal
control systems, AT enhances the reliability of its sustainability disclosures and
ensures alignment with CSRD and ESRS requirements.
Risk Assessment Approach
To effectively manage sustainability risks, Aroundtown employs a structured risk assessment
process that includes both qualitative and quantitative methodologies. The Group-wide risk
assessment classifies risks into strategic, operational, compliance, and reporting categories,
with prioritization based on likelihood of occurrence and potential impact. This approach
allows AT to determine which risks require immediate action, ensuring that sustainability
concerns are addressed in a timely and structured manner. In addition, AT conducts a DMA
in accordance with ESRS requirements. This ensures that sustainability risks are assessed
not only in terms of their financial impact on the Group but also in terms of their broader
societal and environmental implications. The DMA is updated when material changes occur
in the business context, and it incorporates stakeholder input and industry benchmarking to
maintain relevance.To complement these assessments, scenario analysis and data modelling
are used to evaluate potential financial and operational implications of sustainability risks.
By applying these tools, AT strengthens its ability to anticipate and mitigate risks related to
climate change, regulatory compliance, and corporate reputation.
Key Risks and Mitigation Strategies
Through its 2024 risk assessment, AT identified several key sustainability reporting
risks, each addressed with targeted mitigation strategies:
1.
Data Accuracy and Completeness: Risk of inaccurate and incomplete sustainability
data collection and reporting.
y
Mitigation: Internal controls are implemented by the Group’s Sustainability Department.
Any information published on specific topics is first reviewed by the head of the
relevant department and then approved. Following this, the Sustainability Department
conducts its own checks and controls to verify that the content accurately reflects actual
circumstances and ensures no misleading information is included. Following this, the
sustainability report is submitted for review by the Management Body and approval by
the ESG and Audit committees.
Quantitative data collection is monitored throughout the year with internal controls,
including reviews by data owners, department heads, and the Sustainability department
to ensure accuracy and identify errors early.
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2.
Regulatory and Compliance: Risk of non-compliance with evolving sustainability regulations.
y
Mitigation: Continuous monitoring of sustainability regulations across several
departments. Regular updates to internal policies, engagement with legal experts,
and proactive monitoring of regulatory changes through Aroundtown’s legal,
compliance and sustainability departments as part of the departments’ ongoing
responsibilities. The Group also works with external advisors to ensure alignment
with increasing reporting requirements and sustainability regulations.
3.
Stakeholder Trust: Risk of diminished trust due to incomplete or unclear reporting.
y
Mitigation: Enhanced stakeholder communication channels are reinforced through
targeted publications, such as sustainability reports and press releases, ensuring
accessible and consistent information flow. Additionally, independent third-party
limited assurance is implemented to verify the accuracy and reliability of reports,
enhancing credibility and compliance with reporting standards.
4.
Value Chain Intransparency: Limited visibility over ESG performance of suppliers and
contractors.
y
Mitigation: Business partner due diligence is conducted to determine negative or
risk-related information about suppliers and assess their mandatory adherence
to the Code of Conduct for Business Partners. This includes regular assessments,
controls, and reviews to ensure compliance with the law.
These mitigation strategies ensure that AT’s sustainability reporting remains accurate,
transparent, and aligned with stakeholders’ expectations.
Integration of Risk Findings into Business Operations
The findings from risk assessments and internal controls are systematically integrated
into AT’s internal processes, ensuring continuous improvement in sustainability
reporting and risk management.
y
Policy Adjustments: Risk findings inform updates to sustainability policies, including
those related to human rights and supply chain governance.
y
Operational Enhancements: Cross-functional collaboration between Energy,
Operations, and Compliance departments ensures the implementation of targeted
mitigation strategies.
y
Training Programs: Employee training curricula are regularly updated to address
identified knowledge gaps related to sustainability compliance.
y
Strategic Alignment: Sustainability risk assessments directly influence AT’s ESG
strategy and annual sustainability objectives, reinforcing a proactive approach to
risk management.
y
Periodic Reporting and Board Oversight
To maintain accountability, AT ensures that sustainability risk management findings
are regularly reported to its governing bodies. The Chief Risk Officer presents
sustainability risk assessment findings to the Risk Committee at least once per year,
or as needed. Furthermore, any risks identified by individual departments (e.g., Energy,
Operations, Compliance) are escalated to the relevant Board Committees, ensuring
targeted oversight. The frequency of risk reporting aligns with each committee’s Rules
of Procedure, ensuring a structured review process. The Chief Risk Officer also informs
the Management Body in regular but ad-hoc management meetings.
SBM-1 - Strategy, Business Model and Value Chain
Business Model and Strategy in Relation to Sustainability
Aroundtown is a real estate company specializing in income-generating properties
with value-add potential, operating across both the commercial and residential real
estate sectors. The Group’s commercial real estate portfolio includes office spaces in
prime locations across major European cities, hotels leased to third-party operators
under globally recognized brands, retail spaces with a focus on grocery-anchored
and essential goods properties, and logistics and industrial assets. On the residential
side, Aroundtown’s portfolio is managed through Grand City Properties (“GCP”), in
which the Group holds a 62% stake. GCP focuses on affordable housing in Germany
and the United Kingdom (London), specializing in properties in densely populated
urban areas with strong and sustainable economic conditions and sustainable
demographic growth.
Overview of Products and Services
The core of Aroundtown’s business lies in property transactions, asset management,
and value-enhancing upgrades. This includes property management, construction,
refurbishment, and facility maintenance, as well as tenant-oriented services that
enhance the leasing experience. The Group operates a Customer Services Center and
the GCP Tenant App, which provide residential tenants with seamless communication
and service request management. These offerings improve tenant satisfaction while
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embedding sustainable management practices across the Aroudtown’s portfolio. In
2024, no new products or services were introduced, nor were any removed.
Sustainability is a key pillar of Aroundtown’s operations. Environmentally, the
Group has made significant investments in energy-efficient solutions and building
upgrades to support its commitment to sustainability. Socially, the Group promotes
affordable housing initiatives through GCP, as well as contributes to community
development through its foundations, which donate numerous social projects every
year. Finally, AT’s focus on governance & compliance ensures the Group’s inclusion
in ESG Indices - Dow Jones Sustainability Index, Bloomberg Gender Equality Index,
and MDAX ESG. It also provides the basis for transparent reporting as has been
acknowledged by EPRA’s Gold Awards for sustainability reporting.
Aroundtown’s geographic footprint is concentrated in Germany, the Netherlands,
and London, with additional holdings in Paris, Rome, Brussels, and Athens. The Group
serves a diverse tenant base, including governments, multinational corporations,
and domestic enterprises for office spaces, major hospitality brands for hotels,
supermarkets and essential goods retailers for retail properties, and private
individuals for residential housing. In 2024, no significant changes were made to its
market focus or customer segments.
Workforce Overview
The Management Body and AT’s workforce is primarily based in Germany, the
Netherlands and London, with an additional management team in Luxembourg.
As of 31 December 2024, AT employed 1668 employees across its operational
locations. This figure includes:
y
Permanent Employees: 1331 (80% of the total workforce).
y
Temporary Employees: 337 (20% of the total workforce).
y
Full-Time Employees: 1487 (89% of the total workforce).
y
Part-Time Employees: 162 (10% of the total workforce).
y
Non-Guaranteed Hours Employees: 19 (1% of the total workforce)
This headcount excludes external contractors and temporary workers engaged
through third-party agreements. Further details on employee demographics can be
found in section S1-6.
Sustainability-Related Goals and Performance Assessment
Aroundtown has embedded sustainability into its core strategic vision by focusing on
improving energy efficiency, reducing its carbon footprint, and fostering sustainable
urban communities while maintaining financial resilience. A key pillar of Aroundtown’s
sustainability approach is its commitment to energy-efficient real estate. More
concretely this refers to switching to green energy supply as well as the targeted
upgrading of AT’s assets to higher energy efficiency to reduce GHG emissions, as well
as other environmental goals such as the reduction of waste and water consumption
linked to our buildings.
In addition, AT’s residential portfolio is also committed to providing affordable,
appropriate-quality housing in metropolitan areas, addressing critical social needs while
maintaining strong tenant satisfaction. AT prioritizes strengthening tenants’ engagement
and retention through digital tools, such as the GCP App, and community initiatives.
Whereas AT generally sets targets on a group-level, there may be some geographical
differences regarding energy efficiency goals for example due to national laws in the
Netherlands and the UK setting higher standards for energy performance certificates
than Germany.
Regarding the assessment of its significant products, services, and markets in relation
to sustainability goals, AT focuses on upgrading older buildings with energy-efficient
renovations, such as improved insulation, energy-efficient windows, and modernized,
low-carbon heating systems. These efforts align with AT’s key sustainability objective:
achieving a 40% reduction in CO₂ emissions by 2030 (compared to 2019 levels).
Furthermore, the Group has started to invest in renewable energy solutions, such as
solar panel installations, combined heat and power systems, heat pumps, and electric
vehicle charging stations, further supporting its long-term decarbonization strategy.
AT also actively prioritizes green-certified properties, with 47% of its commercial
portfolio, including 65% of the office and 30% of the hotel portfolio already meeting
green certification standards, and ongoing plans to expand this share.
However, this transition to a low-carbon and energy efficient portfolio also presents
notable challenges. High initial investment costs remain a significant barrier, particularly
when implementing large-scale efficiency upgrades. Additionally, stricter EU regulations,
such as the EU Taxonomy for sustainable activities, require ongoing compliance efforts
and enhanced reporting. Another major challenge is the decarbonization of an aging
real estate portfolio, especially in historic city centers where modern energy solutions
are more difficult to implement.
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To address these challenges, Aroundtown is actively expanding its portfolio of green-
certified buildings, aligning with industry best practices and EU sustainability goals. The
Group is also increasing its reliance on electrification and renewable energy sources,
gradually reducing dependence on fossil fuels through investments in solar energy,
and heat pumps. Circular economy principles are becoming more integrated into asset
management, with a growing focus on reducing construction waste and promoting
material reuse in property renovations.
Business Model and Value Chain
Aroundtown’s business model involves acquiring, modernizing and managing commercial
properties to enhance tenant experiences while meeting sustainability targets. Its value
chain includes partnerships with construction firms, energy suppliers, and IT providers to
enhance property standards and operational efficiency.
For details on the business model,
please refer to section “The Strategy and Business Model” in the Board of Director’s report.
Key inputs include capital investment in property acquisition and renovation, energy-
efficient materials sourced through supplier due diligence and tenant feedback. These
inputs are sourced through rigorous due diligence process, such as supplier alignment
with its Code of Conduct for Business Partners, and thorough legal and KYC processes
for sourcing of capital and acquisition opportunities. Outputs include availability of
commercial units, including upgraded and energy-efficient assets, enhanced tenant
services through digital platforms, and improved stakeholder trust through transparent
ESG reporting. These outcomes benefit tenants by providing improved living conditions,
investors with stable returns, and contribute to sustainable urban development.
AT’s value chain encompasses the wide range of activities that are integral to the Group’s
business model. It considers the Group’s strategy, the external environment in which it
operates, and all corresponding stakeholders. At a glance, Aroundtown’s value chain is made
up of the following:
Upstream
1.
Asset Acquisition
y
Deal Sourcing:
Evaluating and selecting assets based on criteria such as location,
market trends, condition, and value-add, yield potential and alignment with
investment strategy.
y
Due Diligence:
Conducting legal, financial, operational and ESG assessments of
assets to ensure they meet investment goals and align with overall strategy, ESG
strategy and risk management.
y
Financing Arrangements:
Securing appropriate financing to purchase or manage assets.
2.
Procurement of materials and services
y
1st tier:
Procurement of services, including but not limited to architectural planning,
engineering, energy auditing and general contracting.
y
2nd - 3rd tier:
Mainly material sourcing and construction material production.
Own operations
3.
Property Management
y
Operational Management:
Day-to-day management of assets, including overseeing
building systems, repairs, and tenant services.
y
Tenant Relations:
Managing lease agreements, handling tenant inquiries, and ensuring
occupancy rates remain high.
y
Facility Management:
Ensuring that facilities are well-maintained, energy-efficient, and
compliant with regulations.
y
Service Contracts:
Outsourcing specific maintenance tasks (e.g., cleaning, landscaping) to
third-party service providers.
4.
Asset Management
y
Performance Monitoring:
Tracking the financial performance of properties, including
rent collections, operating costs, and profitability.
y
Value Enhancement:
Identifying opportunities to enhance property values, such as
upgrading amenities, retrofit projects, and improve energy efficiency.
y
Cost Optimisation:
Reducing operational expenses while upholding property
standards, using strategic measures such as energy audits and purchasing agreements.
5.
Marketing and Leasing
y
Asset Marketing:
Developing marketing strategies to attract and retain tenants.
y
Tenant Retention Programs:
Implementing programs to enhance tenant satisfaction,
such as community-engagement initiatives.
6.
ESG, Compliance and Risk Management
y
Legal Compliance:
Ensuring adherence to safety regulations, residential tenancy law,
property taxes, and other legal obligations.
y
Health & Safety Management:
Implementing safety standards for tenants and
visitors, including fire safety, emergency planning, and regular inspections.
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y
ESG Initiatives:
Increasing focus on initiatives such as energy efficiency and green
building certifications, as well as other measures that improve the sustainability
performance of the assets.
7.
Refurbishment and Development
y
Refurbishment and asset improvements:
Upgrading, renovating, or modernizing
existing properties to enhance their operational, financial and/or sustainability
performance. This includes refurbishments and other maintenance measures aimed
at maintaining asset quality and enhancing energy efficiency.
y
Development:
Identifying and extracting building and conversion rights from
underutilized land and buildings (both new and existing). This involves planning,
engaging with authorities, selling the rights, or, in select cases, partnering with
external parties for development and overseeing the project.
Downstream
8.
Consolidated Reporting and Investor Relations
y
Financial and ESG Reporting:
Regularly providing financial and non-financial
statement to relevant stakeholders and the public, as well as analyzing key
performance indicators (KPI)s that are relevant to operational, financial and
sustainability performance of the Group.
y
Investor Relations:
Managing relationships with investors, conveying the Group’s
strategy and performance, maintaining an open channel for communications.
9.
Exit Strategies
y
Selling assets:
Capital recycling through the sales of assets.
y
Real estate brokers:
Maintaining relationship with local and nationwide brokers that
facilitate property sales.
SBM-2- Interests and view of Stakeholders
Stakeholder Engagement and Integration into Business Strategy
Aroundtown recognizes that stakeholder engagement is fundamental to achieving
its sustainability and business objectives. By fostering transparency, inclusivity, and
responsiveness, the Group ensures that stakeholder insights inform its strategic
direction, sustainability initiatives, and operational improvements.
Stakeholder Engagement Approach
AT’s stakeholder engagement process involves diverse mechanisms: surveys,
roundtables, direct consultations, a customer service center and digital platforms,
including the GCP Tenant App to facilitate continuous interaction with stakeholders.
Overall, stakeholder engagement is integrated into operational processes and
decision-making to align with AT’s sustainability objectives.
Key Stakeholders and Their Roles
Aroundtown identifies its key stakeholder groups, reflecting their varying interests
and interactions with the Group. The listed below represent those groups identified
in the DMA process:
y
Tenants: Residents who lease and engage with AT properties.
y
Employees: The workforce responsible for property management, operations, and
corporate functions.
y
Investors: Institutional investors, including pension funds, asset managers,
sovereign funds, lending institutions (e.g., banks), and private retail shareholders.
y
Local Communities: Neighborhoods of Aroundtown’s residential assets owned by its
subsidiary GCP.
y
Suppliers and Contractors: Business partners providing materials, construction, and
maintenance services
AT categorizes key stakeholders based on their roles within its value chain as internal
stakeholders: employees, and external stakeholders: tenants, workers in the value
chain, local communities, suppliers, investors, and financial institutions.
Organisation of Stakeholder Engagement
Stakeholder engagement is coordinated and overseen by the Sustainability Department,
with direct involvement from various AT departments such as Operations, Customer
Service, and Communications. Engagement initiatives:
y
Tenant engagement: Continuous feedback collection through AT’s Customer Service
Center and interactions between service agents and tenants.
y
Community events: Organized throughout the year at residential properties owned
by AT’s subsidiary GCP and in surrounding neighborhoods.
y
Employee engagement: Conducted through annual satisfaction surveys and HR
roundtables.
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y
Investor relations: Managed via quarterly investor meetings, investor conferences,
roadshows, and annual general meetings.
y
Supplier assessments: Business Partner & Know-Your-Customer teams evaluate
supplier compliance with the Code of Conduct for Business Partners.
This structured approach ensures that stakeholder concerns are systematically
gathered and addressed and aligned to the DMA process.
Purpose and Impact of Stakeholder Engagement
The purpose of stakeholder engagement at Aroundtown is to identify and address
material sustainability impacts, risks, and opportunities. Engagement efforts aim to
foster trust and collaboration with tenants, employees, and external partners while
ensuring business practices align with stakeholder expectations and regulatory
requirements. By incorporating stakeholder insights, the Group enhances its
sustainability goals through informed and effective strategies.
Stakeholder engagement outcomes are continuously analyzed and integrated into
AT’s operations and strategic planning:
y
Tenant feedback informs property upgrades and service improvements.
y
Investor feedback shapes (ESG) disclosures and reporting.
y
Supplier evaluations lead to enhanced due diligence and stricter contract
requirements.
While stakeholder feedback plays a crucial role in refining AT’s practices, it has not led
to major amendments to the Group’s overall strategy or business model in recent years.
Stakeholder Views in Strategy and Business Model
Aroundtown considers the interests and views of its key stakeholders in shaping its
strategy and business model. Tenants prioritize reliable services, and energy-efficient
properties and the Group’s residential tenants seek affordable housing, while
employees seek career development, fair treatment, and workplace safety. Investors
focus on transparent ESG reporting, compliance, appropriate risk management, and
stable returns. Local communities, especially residential neighborhoods, emphasize
social responsibility, environmental stewardship, and local development. Suppliers
emphasize working conditions and reliable payments as their main interest. This
stakeholder understanding is integrated into AT’s materiality assessments, guiding
strategic decision-making and sustainability initiatives.
Governance and Stakeholder Insights in Sustainability Decision-Making
The Board of Directors and the Management Body are informed about the views and
interests of affected stakeholders with regard to the Group’s sustainability-related impacts
by the ESG Committee and the department heads. Such information is included in meeting
presentations to the Board and the Management Body. For example, the Sustainability
Department presents the outcome of the DMA, which is the assessment of the Group’s
affected stakeholders’ views, and the Human Resources Department presents results from
employee satisfaction surveys. The Board evaluates the information and findings presented
to them during quarterly governance meetings to refine sustainability strategies.
SBM-3 - Material impacts risks and opportunities and their interaction
with strategy and business model
As part of our structured methodology to identify impacts, risks, and opportunities
(“IRO”) and to integrate these ESG considerations into our risk management framework,
Aroundtown utilizes the DMA in alignment with the ESRS 1 section 3.
In 2024, Aroundtown conducted its most recent comprehensive DMA which identified
the following material positive and negative impacts on people and the environment,
risks and opportunities, the business operations and/or value chain that they relate to
as well as the relevant time horizons of material impacts, categorized as:
y
Short-term time horizon (12 months)
y
Medium-term time horizon (1–5 years)
y
Long-term (>5 years)
Of the 40 topics assessed, five of them were found to be of either environmental,
social or governance impact, nine were found to be double material to the business,
framed under the following ESRS topics.
Note that although local communities have been identified as a key stakeholder of
the Group, the DMA for Aroundtown did not uncover any material IROs in relation to
affected communities. However, in the DMA of AT’s subsidiary, residential property
owner GCP, material impacts were determined for affected communities (ESRS S3),
in particular regarding the topic of adequate housing. As this topic is specifically
pertinent to GCP’s operations and its direct impact on local communities, yet, is not
relevant for Aroundtown as a commercial real estate company and not material on
a Group level, the disclosures related to adequate housing under ESRS S3 are not
included in this report.
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E1 Climate Change
Real estate is a major contributor to climate change, accounting for nearly 40% of global carbon emissions through construction, energy use, and building materials
(*)
This area was also identified for
Aroundtown’s building portfolio with the most material impact on the environment and people and the greatest potential for positive impact through strategic investment in energy efficient building
operations and renewable energy generation. Both energy efficiency and low carbon energy supply are also identified as posing material risks to the business model as well as providing opportunities.
The following material impacts, risks and opportunities related to climate change were identified for AT:
Table 5
ESRS Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Climate Change
Mitigation
Greenhouse gas
(GHG) emissions
Negative impact
GHG emissions from building construction and operations (direct landlord-GHG-emissions and indirect tenant GHG emissions)
Own operations
and Value chain
(downstream)
Long-term
Renewable energy
Positive impact
Decreased GHG emissions from increasing renewable energy production and/or procurement
Own operations
Long-term
Risk
Staying behind in transition towards green economy (e.g., lower EU Taxonomy-alignment, less interest from sustainability-
oriented investors)
Medium-term
Opportunity
Decentral production of renewable energy; more dynamic integration into energy network and demand response
technologies requirements; renewable energy procurement
Financing green
investment
Positive impact
Increase of capital available for green investments
Own operations
Medium-term
Energy efficiency
Positive impact
Improvements of energy efficiency in building operations and introduction of energy-efficient building technologies
Own operationsand
Value chain
(downstream)
Long-term
Low carbon transport
Positive impact
Availability of EV charging stations
Own operations
Short-term /
Long-term
Transition legislation
Risk
Introduction of new taxes and laws; particularly material for potentially locked-in GHG emissions
Own operations
Medium-term
Transition to low-
carbon economy (incl.
Net Zero Carbon)
Risk
Investment requirements and technical challenges associated with decarbonization and transition legislation
Own operations
Medium-term
Opportunity
Financing opportunities (e.g., subsidies) for transition plans
Opportunity
Better alignment with increased sustainability-related market expectations, attracting sustainability-oriented tenants
Energy
Energy consumption
and intensity
Positive or
Negative impact
Impact on energy consumption of building operations from decisions on implemented building technology
Own operations
and Value chain
(downstream)
Long-term
Risk
Increased pressure to lower energy consumption and intensity resulting in costs of improvements and technological challenges
Opportunity
Decreased energy costs from energy efficiency upgrades
E2 Pollution
Linked to the before-mentioned significant energy consumption of Aroundtown’s building portfolio and the fact that a large proportion of it is generated from fossil fuels, air pollution was also
identified as having a potential material negative impact on AT’s business operations and the environment:
(*) for further details, see:
United Nations Environment Programme Finance Initiative (UNEP FI)
, 40% of Emissions Come from Real Estate – Here’s How the Sector Can Decarbonize, 2022
Table 6
ESRS Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Air pollution
Negative impac
t
Emissions from fossil fuel-based heating and energy consumption
Own operations and Value chain (downstream)
Long-term
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Table 7
ESRS
Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Working
conditions
Working time
Positive impact
Compliance with at least relevant legislation
Own operations
Short-term / Long-term
Risk
Availability and cost of adequate workforce
Medium-term
Opportunity
Employer attractiveness to adequate workforce in relation to provision of adequate
working time
Medium-term
Adequate wages
(*)
Positive impact
Policies on adequate wages and compliance with at least relevant legislation
Own operations
Short-term / Long-term
Risk
Availability and cost of adequate workforce
Medium-term
Opportunity
Employer attractiveness to adequate workforce in relation to provision of adequate wages
Medium-term
Work-life balance
Positive impact
Existence of flexible working (or similar) policies and procedures
Own operations
Short-term / Long-term
Risk
Availability and cost of adequate workforce
Opportunity
Employer attractiveness to adequate workforce in relation to provision of work-life balance
Health and safety
Positive impact
Policies and procedures regarding safeguarding of health and safety of own workforce and
compliance with at least relevant legislation
Own operations
Short-term / Long-term
Risk
Availability and cost of adequate workforce
Opportunity
Employer attractiveness to adequate workforce in relation to provision of health and safety
Secure employment
Positive impact
Policies regarding secure employment
Own operations
Short-term / Long-term
Risk
Availability and cost of adequate workforce
Short-term / Long-term
Opportunity
Employer attractiveness to adequate workforce in relation to provision of secure
employment
Medium-term
Social dialogue
Positive impact
Policies and procedures regarding social dialogue between employers and own workforce
Own operations
Short-term / Long-term
Freedom of association, the existence of works councils
and the information, consultation and participation rights
of workers
Positive impact
Policies and procedures regarding freedom of association
Own operations
Short-term / Long-term
Equal treat-
ment and
opportunities
for all
Gender equality and equal pay for work of equal value
Positive impact
Policies and procedures regarding gender equality and equal pay for work of equal value
Own operations
Short-term / Long-term
Training and skills development
Positive impact
Provision of training and skills development
Own operations
Short-term / Long-term
Employment and inclusion of persons with disabilities
Positive impact
Policies and practices regarding employment of persons with disabilities
Own operations
Short-term / Long-term
Measures against violence and harassment in the workplace
Positive impact
Existence of measures against violence and harassment in the workplace
Own operations
Short-term / Long-term
Diversity
Positive impact
Policies and procedures to promote diversity and inclusion in the workplace
Own operations
Short-term / Long-term
Other work-
related rights
Privacy
Positive impact
Policies and procedures regarding privacy of workers and employees
Own operations
Short-term / Long-term
S1 Own Workforce
The DMA identified that Aroundtown, as a large employer, is able to create significant positive impact on staff social and financial wellbeing through its various employment policies.
At the same time, risks and opportunities linked to attracting and nurturing talent in a competitive labor market were identified as material to AT’s business success. Material impacts,
risks and opportunities related to AT’s own workforce were identified as:
(*)
adequate wages is defined by ESRS as following minimum wage requirements in the national member states
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S2 Workers in the Value Chain
Workers in AT’s value chain includes contracting companies, suppliers and business partners and their staff, which are impacted in similar ways to AT’s own workforce. Those workers
identified to have a higher negative impact were external construction workers.
Material AT impacts to workers in AT’s value chain were identified as:
S4 Consumers & End Users
In the current reporting year transparent and secure information flow was identified as material to AT’s tenants and thus also to AT’s business operations. Impacts, risks and
opportunities linked to our consumers and end users, that is our tenants, were identified as:
Table 8
ESRS Sub-
topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Working
conditions
Secure
employment
Positive
impact
Employment contracts meet at least the minimum local standards, other than
for contractors. E.g. pension and health insurance contributions, guaranteed
hours, at or above minimum wage
Value chain (upstream)
Short-term / Long-
term
Working time
Policies regarding working time and compliance with at least relevant
legislation
Adequate
wages
Policies on adequate wages and compliance with at least relevant legislation
Health and
safety
Existence of Health and safety policies
Table 9
ESRS Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Information-related
impacts for consumers/
or end-user
Access to
(quality)
information
Positive
Impact
Transparent communication on building-related questions
Own
operations
and Value
chain
(downstream)
Short-term / Long-term
Risk
Reputational or legal risk from not giving sufficient access to quality information to
consumers and end-users
Long-term
Privacy
Positive
Impact
Policies regarding privacy, e.g. with regards to grievances, personal data, consumption data
Short-term / Long-term
Risk
Reputational or legal risk from not respecting privacy of consumers and end-users
Long-term
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G1 Business Conduct
Material impacts, risks and opportunities linked to Aroundtown’s business conduct, both upstream and downstream, were identified for this reporting year. They are:
Table 10
ESRS Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Corporate culture
Positive impact
Definition of corporate and company culture including mission and vision
Own
operations
Short-term /
Long-term
Risk
Reputational risk from not adhering to best business practice standards in relation to corporate culture
Opportunity
Employer attractiveness to adequate workforce by adhering to best business practice standards in
relation to corporate culture
Protection of
Whistleblowers
Positive impact
Existence of protection of whistle-blowers
Own operations
Short-term /
Long-term
Management of
relationships with
suppliers including
payment practices
Positive impact
Policies, procedures and practices regarding management of relationships with suppliers
Value chain
(upstream)
Short-term /
Long-term
Risk
Reputational and legal risk from not adhering to best business practices regarding management
relationships with suppliers
Corruption and bribery
Incidents
Positive impact
Existence of incidents log
Own operations
Short-term /
Long-term
Risk
Reputational and legal risk from not adhering to best business practices, anticorruption and anti-bribery
rules and practices
Prevention
and detection
including
training
Positive impact
Existence of prevention and detection mechanisms, including training for exposed staff members
Own operations
Short-term /
Long-term
Risk
Reputational and legal risk from not adhering to best business practices, anticorruption and anti-bribery
rules and practices
Investor relations
(*)
Access to
capital
Positive and
negative impact
Investors sustainability awareness
Own operations
and Value chain
(upstream)
Short-term /
Long-term
Risk
ESG and climate risk requirements impact access to capital from lenders and institutional investors (e.g.,
increasing ESG-related expectations
Opportunity
ESG performance could attract new investors and enable access to capital
Reputation
Positive and
negative impact
Increasingly investors prefer to deploy capital with firms which have a positive reputation for management
of ESG issues
Own operations
and Value chain
(upstream)
Short-term /
Long-term
Detailed information regarding specific material impacts, risks, and opportunities is provided in the sections addressing each relevant topical ESRS.
For each of the material IROs, detailed information is provided in the sections below referring to each appropriate topical ESRS, including how material negative and positive impacts
affect (or are likely to affect) people or the environment, and how they connect to strategy and business model of the relevant undertaking.
(*)
entity-specific sub-topic
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Impact material
Materiality matrix at Sub-topic level
Double material
Financially material
Not material
4
21
22
23
35
Environmental
Governance
Social
1
8
11
13
15
17
18
19
24
25
27
30
31
32
33
37
2
3
20
26
29
34
38
39
40
Environmental
E1 Climate Change
1.
Climate Change
Adaptation
2.
Climate Change
Mitigation
3.
Energy
E2 Pollution
4.
Pollution of air
5.
Substances of concern
E3 Water &
Marine Resources
11.
Water
E4 Biodiversity &
Ecosystems
13.
Direct impact drivers of
biodiversity loss
14.
Impacts on the extent and
condition of ecosystems
E5 Resource Use and Circular
Economy
17.
Resources inflows,
including resource use
18.
Resource outflows related
to products and services
19.
Waste
Social
S1 Own Workforce
20.
Working conditions
21.
Equal treatment and
opportunities for all
22.
Other work-related rights
S2 Workers in the Value
Chain
23.
Working conditions
24.
Equal treatment and
opportunities for all
25.
Other work-related rights
S3 Affected communities
26.
Communities’ economic,
social and cultural rights
27.
Communities’ civil and
political rights
S4 Consumers and
End-users
29.
Information-related
impacts for consumers
and/or end-users
30.
Personal safety of
consumers and/or end-
users
31.
Social inclusion of
consumers and/or end-
users
32.
Tenant engagement
33.
Health and wellbeing of
tenants/occupants
Governance
G1 Business Conduct
34.
Corporate culture
35.
Protection of whistle-
blowers
37.
Political engagement and
lobbying activities
38.
Management of
relationships with
suppliers including
payment practices
39.
Corruption and bribery
40.
Investor relations**
**Sub-topic added as sector/entity specific
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Financial Effects of the Material Risks and Opportunities
Aroundtown assesses the financial implications of material risks and opportunities by
analyzing their impacts on the Group’s financial position, performance, and cash flows.
Climate-related risks directly influence the Group’s financial position, particularly in
property valuations and insurance premiums, reflecting market and regulatory shifts
in response to evolving environmental considerations. From a financial performance
perspective, investments in energy retrofitting projects, while requiring significant
upfront costs, offer long-term cost savings by reducing utility expenses and enhancing
energy efficiency. These initiatives align with AT’s sustainability objectives and
improve the operational efficiency across the portfolio. In terms of access to capital,
sustainable property upgrades serve as a significant driver in attracting ESG-focused
investors. This focus ensures consistent access to capital, strengthens financial
stability, and supports the Group’s ongoing efforts to align with sustainability goals.
Resilience of the Business Model and Strategy
Aroundtown’s strategy demonstrates resilience by embedding sustainability
considerations into its governance framework and operations. Risk assessments and
adaptive policies ensure preparedness to address emerging ESG challenges. For each
of the material IROs, detailed information is provided in the sections below referring
to each appropriate topical ESRS.
Further Disclosures
Besides the topics defined by the ESRS, Aroundtown identified the following entity-
specific topics, which were also determined to be material as part of the DMA process:
G1 Business conduct: Investor relations – access to capital and investor relations –
reputation.
IRO- 1 – Description of the Processes to Identify and Assess Material
Impacts, Risks and Opportunities
AT employs a structured and data-driven approach to identifying, assessing, and
managing sustainability-related IROs. This methodology integrates ESG considerations
into the Group’s risk management framework, ensuring a comprehensive and proactive
response to evolving sustainability challenges and opportunities.
Methodology for Identifying Impacts, Risks, and Opportunities
Aroundtown conducts a DMA that evaluates sustainability risks, opportunities, and
impacts across all business activities and the value chain. This methodology is aligned
with ESRS 1, section 3, ensuring compliance with European sustainability reporting
requirements. AT will review the DMA annually and update it if material changes in
the business context are identified.
The methodology begins with documenting the business model and mapping the
value chain, followed by a relevance workshop to refine a list of IROs. These are scored
on dimensions such as likelihood, scale, scope, and irremediability. Surveys targeting
both internal and external stakeholders assess the impact and financial materiality of
each IRO, with weighted inputs based on stakeholder priority. Any complex topics or
gaps identified are resolved through stakeholder interviews and leadership decisions.
This systematic approach integrates qualitative and quantitative analyses to ensure
comprehensive and CSRD-compliant reporting.
Given the complexity of the DMA, several assumptions were made to streamline the
process. The likelihood, scale, scope, and irremediability of each IRO were assessed
using a standardized 1–5 scale. This implies that subjective judgments across
different stakeholder groups will align sufficiently to ensure consistent results. A
threshold of
≥
2.5 was set for materiality, despite varying sensitivities across different
industries or stakeholder groups. Furthermore, due to lack of accessibility of some
stakeholders, internal employees with relevant expertise and regular exposure to
these groups represented these external stakeholders. This applies particularly to
less accessible groups like communities. Lastly, when stakeholders responded “I
don’t know” to survey questions, with a threshold of >30% “I don’t know” indicated
the need for expert intervention and leadership decision-making, to adequately
address knowledge gaps.
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Assessment, Prioritisation, and Monitoring of Impacts
Aroundtown’s process for identifying, assessing, prioritizing, and monitoring potential
and actual impacts on people and the environment is divided into three key stages:
understanding the business and its context, identifying and evaluating IROs through
surveys and interviews with stakeholders, and determining material sustainability
matters. The process begins with a thorough understanding of the Group’s business
model and value chain, where AT maps its upstream and downstream activities,
identifying areas where IROs may occur.
Next, stakeholders are carefully identified and prioritized, including tenants, employees,
suppliers, investors and local communities. Each stakeholder group is evaluated based
on their influence, immediacy, and impact, ensuring their perspectives are reflected
appropriately. A comprehensive list of potential IROs is compiled, informed by sector-
specific ESRS topics and internal considerations. This list is further reviewed and
refined through collaboration with key departments, such as ESG and Risk.
Once the IROs are identified, they are assessed using a defined scoring framework.
Impact materiality is evaluated based on factors like likelihood, scale, scope, and
irreversibility, while financial materiality is assessed using monetary thresholds
and time horizons. Surveys are distributed to gather stakeholder input on these
dimensions, with additional input from the Sustainability Department for more
complex evaluations.
The results of these assessments are used to prioritize impacts based on their
significance. Topics deemed material are subjected to further analysis and validation
through workshops and interviews with senior management, ensuring alignment with
stakeholder feedback.
The entire process is underpinned by Aroundtown’s set of corporate policies, including
its Human Rights Policy, Codes of Conduct for Employees and Code of Conduct for
Business Partners, as well as adherence to international standards, including the
guidance on the Double Materiality Assessment provided by EFRAG IG 1: Materiality
Assessment Implementation Guidance. This guarantees that the assessment is both
ethical and comprehensive, addressing the Group’s commitment to people and the
environment. AT ensures that the outcomes of this process are accessible and capable
of driving continuous improvement in sustainability practices
AT’s process is designed to address areas with heightened risk of adverse impacts,
focusing on specific activities, business relationships, and geographies. In the supply
chain, particular attention is paid to construction and maintenance contractors
operating in regions where labor laws are less stringent, ensuring they comply with
ethical and sustainability standards.
Within operations, tenant data management processes are monitored for potential
GDPR non-compliance, while tenant energy consumption and related GHG emissions
are identified as key adverse impacts. Additionally, risks associated with non-
compliance with minimum energy standards for rental spaces are carefully managed.
Geographically, the process prioritizes properties located in regions vulnerable to
physical climate risks, such as flooding. Business relationships are evaluated through
supplier questionnaires and periodic audits, with an emphasis on ensuring adherence
to human rights and safety standards.
Managing Direct and Indirect Impacts
Aroundtown distinguishes between direct impacts (own operations) and indirect
impacts (business relationships):
y
Direct impacts: Arising from tenant interactions, such as housing adequacy and data
privacy risks. Managed through tenant service protocols and privacy compliance
measures.
y
Indirect impacts: Linked to supply chain labor conditions and contractor
environmental performance. Addressed through contractual obligations and supplier
training programs to improve ESG compliance.
AT ensures stakeholder perspectives inform its IRO analysis through:
y
Tenant surveys on service quality and asset conditions.
y
Supplier assessments to ensure alignment with AT’s ESG principles.
y
Expert collaboration with sustainability consultants for independent validation of
the DMA methodology.
Prioritisation of Impacts, Risks, and Opportunities
The DMA follows a structured approach, starting with business model and value
chain mapping and a relevance workshop to identify and categorize potential IROs as
not relevant, moderately relevant, or highly relevant. Highly relevant topics proceed
automatically, while others are further assessed or excluded. Actual negative impacts
are assessed based on their severity, while potential negative impacts are evaluated
considering both severity and likelihood. The analysis focuses on short-, medium- or
long-term. In the case of a potential negative human rights impact, severity takes
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precedence over likelihood. Stakeholder engagement through surveys, interviews,
and workshops ensures a well-rounded validation, with priority given to high-impact
stakeholders.
Finally, the results are consolidated and validated through further discussions with key
decision-makers. Any topics close to the materiality threshold or flagged as uncertain
by stakeholders are reviewed in detail by senior management and the Sustainability
Department. Topics with financial materiality undergo an additional review by senior
leadership to ensure they accurately reflect Group risks and opportunities. As a
conclusion of these discussions, including also the advice from external consultants,
the material information was determined, based on the ESRS structure, in relation to
the material impacts, risks and opportunities.
Aroundtown is currently reviewing its process for identifying, assessing, prioritizing,
and monitoring risks and opportunities with potential financial effects. While still in
development, this process involves regular climate risk assessments, the use of Energy
Performance Certificates to help identify vulnerabilities, and a structured approach
to prioritizing risks based on urgency and potential financial impact. Monitoring is
conducted through KPIs. A more detailed update on the process will be provided in
next year’s reporting.
The Group considers impacts and dependencies across its value chain and integrates
these considerations into its risk and opportunity assessments. Impacts on people,
such as tenant satisfaction or health and safety, are closely linked to AT’s reputational
and financial performance. Satisfied tenants foster long-term occupancy and trust,
reducing turnover costs and enhancing overall portfolio stability.
Environmental dependencies, including energy use and associated GHG emissions,
directly influence regulatory compliance and operational costs. Efficient energy
management not only mitigates regulatory risks but also reduces expenses, creating
opportunities for cost savings and improved sustainability outcomes. By understanding
these connections, Aroundtown ensures its strategies are responsive to risks and
aligned with long-term value creation.
Decision-Making and Integration with Risk Management
Each risk and opportunity is evaluated based on:
y
Likelihood (historical data and future projections).
y
Magnitude (financial, reputational, and operational impact).
y
Nature (short-term vs. long-term, direct vs. indirect).
Sustainability-related risks are integrated into AT’s enterprise risk management
system, ranking them alongside regulatory and operational risks.
y
Oversight by the Risk Committee, Sustainability Department, and Chief Risk Officer.
y
Combination of qualitative and quantitative risk assessments, with targeted financial
analysis for high-priority IROs.
y
Sustainability risks are incorporated into enterprise risk assessments.
y
Opportunities (e.g., renewable energy projects) are integrated into strategic planning.
y
Stakeholder feedback, market research, and industry tools.
Since last year, we have made two improvements to the way we conduct engagement.
These improvements are:
y
New digital tools for tenant feedback tracking.
y
Expanded stakeholder consultations and climate risk evaluations.
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IRO-2 – Disclosure Requirements in ESRS Covered by the
Undertaking’s Consolidated Sustainability Statement
ESRS Disclosure Requirements Complied with in Preparing Consolidated
Sustainability Statement following Outcome of Materiality Assessment
ESRS 2 General
Reference
Title
Page
Number
BP-1
General basis for preparation of the sustainability statement
49-50
BP-2
Disclosures in relation to specific circumstances
50-53
GOV-1
The role of the administrative, management and supervisory
bodies
53-57
GOV-2
Information provided to and sustainability matters addressed by
the undertaking’s administrative, management and supervisory
bodies
58-59
GOV-3
Integration of sustainability-related performance in incentive
schemes
59
GOV-4
Statement on due diligence
59
GOV-5
Risk management and internal controls over sustainability
reporting
60-61
SBM-1
Strategy, business model and value chain
61-64
SBM-2
Interests and views of stakeholders
64-65
SBM-3
Material impacts, risks and opportunities and their interaction
with strategy and business model
65-71
IRO-1
Description of the process to identify and assess material
impacts, risks and opportunities
71-73
IRO-2
Disclosure Requirements in ESRS covered by the undertaking’s
sustainability statement
74-76
List of data points that derive from other EU legislation and
information on their location in sustainability statement
153-155
E1 Climate Change
Reference
Title
Page
Number
E1. GOV-3
Integration of sustainability-related performance in incentive
schemes
78
E1-1
Transition plan for climate change mitigation
78-81
EU
Taxonomy
Disclosures
EU Taxonomy Disclosures
82-87
E1. SBM-3
Material impacts, risks and opportunities and their interaction
with strategy and business model
87-92
E1. IRO-1
Description of the processes to identify and assess material
climate-related impacts, risks and opportunities
87-92
E1-2
Policies related to climate change mitigation and adaptation
93
E1-3
Actions and resources in relation to climate change policies
93-94
E1-4
Targets related to climate change mitigation and adaptation
94-97
E1-5
Energy consumption and mix
97-102
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
102-109
E1-7
GHG removals and GHG mitigation projects financed through
carbon credits
109
E1-8
Internal carbon pricing
109
E2 Pollution
Reference
Title
Page
Number
E2. IRO-1
Description of the processes to identify and assess material
pollution-related impacts, risks and opportunities
111
E2-1
Policies related to pollution
111-112
E2-2
Actions and resources related to pollution
112
E2-3
Targets related to pollution
112
E2-4
Pollution of air, water and soil
112
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S1 Own Workforce
Reference
Title
Page
Number
S1. SBM-2
Interests and views of stakeholders
115
S1. SBM-3
Material impacts, risks and opportunities and their interaction
with strategy and business model
115-116
S1-1
Policies related to own workforce
116-118
S1-2
Processes for engaging with own workforce and workers’
representatives about impacts
118
S1-3
Processes to remediate negative impacts and channels for own
workforce to raise concerns
118-119
S1-4
Taking action on material impacts on own workforce, and
approaches to managing material risks and pursuing material
opportunities related to own workforce, and effectiveness of
those actions
119-121
S1-5
Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks and
opportunities
121-122
S1-6
Characteristics of the undertaking’s employees
122-123
S1-9
Diversity metrics
124
S1-10
Adequate wages
124
S1-11
Social protection
124
S1-12
Persons with disabilities
124
S1-13
Training and skills development metrics
124-125
S1-14
Health and safety metrics
125-126
S1-15
Work-life balance metrics
126
S1-16
Remuneration metrics (pay gap and total remuneration)
126
S1-17
Incidents, complaints and severe human rights impacts
127
S2 Workers in the Value Chain
Reference
Title
Page
Number
S2. SBM-2
Interests and views of stakeholders
129
S2. SBM-3
Material impacts, risks and opportunities and their interaction
with strategy and business model
129-130
S2-1
Policies related to value chain workers
130-132
S2-4
Taking action on material impacts on value chain workers, and
approaches to managing material risks and pursuing material
opportunities related to value chain workers, and effectiveness
of those action
133
S2-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
134
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G1 Business Conduct
Reference
Title
Page
Number
G1. GOV-1
The role of the administrative, management and supervisory bodies
146-147
G1-1
Business conduct policies and corporate culture
147-149
G1-2
Management of relationships with suppliers
149-150
G1-3
Prevention and detection of corruption and bribery
150-152
G1-4
Incidents of corruption or bribery
152
G1-6
Payment practices
152
S4 Consumers and End-Users
Reference
Title
Page
Number
S4. SBM-2
Interests and views of stakeholders
136
S4. SBM-3
Material impacts, risks and opportunities and their interaction
with strategy and business model
136-137
S4-1
Policies related to consumers and end-users
137-138
S4-2
Processes for engaging with consumers and end-users about
impacts
138
S4-3
Processes to remediate negative impacts and channels for
consumers and end-users to raise concerns
139
S4-4
Taking action on material impacts on consumers and end-
users, and approaches to managing material risks and pursuing
material opportunities related to consumers and end-users, and
effectiveness of those actions
139-142
S4-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
143-144
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Environmental Information
ESRS E1 – Climate Change
Introduction
Over recent years, the global community, consisting of scientific researchers,
governments, multilateral organizations, and the private sector, has increasingly
recognized the crucial responsibility to mitigate the negative effects of climate
change. The Intergovernmental Panel on Climate Change (“IPCC”) has made it clear
that the international community must limit global warming to +1.5°C in comparison
to pre-industrial times, requiring significant reductions in greenhouse gas (“GHG”)
emissions worldwide. Through the Double Materiality Assessment (“DMA”), key areas
have been identified where GCP’s business has a significant impact or faces risks and/
or opportunities. With buildings and construction accounting for for around 40% of
global annual emissions(*), climate change mitigation remains a key material topic for
the Group and, in our view, the real estate sector as a whole.
As part of our assessment, we have identified various climate change mitigation
topics, as well as energy consumption, as material sustainability matters. While
climate change adaptation and related physical climate risks are relevant, they have
not been classified as material sustainability matters in this year’s DMA based on our
assessment of their impact on our assets. However, recognizing the importance of that
topic, Aroundtown will continue to closely monitor future developments and take
necessary actions as appropriate.
IROs or datapoints that were identified as immaterial to Aroundtown are not covered
in this report. In some cases, AT decided to use the phase-in provisions (in accordance
with Appendix C of ESRS 1) and is committed to disclosing these datapoints in the
coming years.
High-level overview of disclosure
Standard
Indicator
ESRS E1
Climate Change
E1. GOV-3 – Integration of sustainability-related performance in
incentive schemes
E1-1 – Transition plan for climate change mitigation
E1. SBM-3– Material impacts, risks and opportunities and their
interaction with strategy and business model
E1. IRO-1 – Description of the processes to identify and assess
material climate-related impacts, risks and opportunities
E1-2 – Policies related to climate change mitigation and adaptation
E1-3 – Actions and resources in relation to climate change policies
E1-4 – Targets related to climate change mitigation and adaptation
E1-5 – Energy consumption and mix
E1-6 – Gross Scopes 1, 2, 3 and Total GHG emissions
E1-7 - GHG removals and GHG mitigation projects financed through
carbon credits
E1-8 - Internal carbon pricing
(*) For further details, see:
United Nations Environment Programme Finance Initiative (UNEP FI)
ץ
40% of Emissions Come from
Real Estate – Here’s How the Sector Can Decarbonize, 2022.
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Table 11
Material sustainability matters covered in ESRS E1
Sub-topic
Sub-sub-topic
Material
Impact
Categorization
of IRO
Localization of
IRO
Time
horizon
of IRO
Climate
change
mitigation
Greenhouse gas
(GHG) emissions
Impact
Negative
Impact
Own operations
and Value chain
(downstream)
Long-term
Transition to
low-carbon
economy
(incl. Net Zero
Carbon)
Financial
Risk/
Opportunity
Own operations
Medium-
term
Transition
legislation
Financial
Risk
Own operations
Medium-
term
Renewable
energy
Double
Positive
Impact
Risk /
Opportunity
Own operations
Medium-
term /
Long-
term
Financing green
investment
Impact
Positive
Impact
Own operations
Medium-
term
Energy
efficiency
Impact
Positive
Impact
Own operations
and Value chain
(downstream)
Long-term
Low carbon
transport
Impact
Positive
Impact
Own operations
Short-
term /
Long-term
Energy
Energy
consumption
and intensity
Double
Positive Impact
or Negative
impact
Risk/
Opportunity
Own operations
and Value chain
(downstream)
Long term
E1.GOV 3 - Integration of Climate-Related Performance in Incentive
Schemes
The Group integrates climate-related considerations into its remuneration practices
by incorporating a climate-related target into the Remuneration Policy for executive
individuals as described here. This is outlined in the section related to disclosure
requirement Gov-3 Integration of Sustainability-Related Performance in Incentive
Schemes, found in the ESRS 2 disclosures. The primary climate-related target is
Target 3 of STIP Remuneration concerning the Group GHG emissions reduction target,
which accounts for 15% of STIP remuneration. Additionally, according to LTIP Target 4
executive individuals are remunerated based on the Group’s performance against ESG
rating schemes. This policy does not apply to supervisory bodies, as Aroundtown does
not have a supervisory body, but an advisory body.
After the conclusion of each fiscal year, the Group prepares a detailed Remuneration
Report as part of the materials distributed before the next Annual General Meeting,
published on the Aroundtown website in May or June. These materials are prepared in
accordance with Article 7 of the Luxembourg law of 24 May 2011 implementing the
Shareholder Rights Directive II (EU) 2017/828. These materials are published to the
General Meeting pages found under the Investor Relations web page of the Aroundtown
website.
The Remuneration Report will highlight which targets applied to the remuneration
for the reporting year and its relation to the Remuneration Policy targets.
E1-1 Climate Transition Plan for Climate Change Mitigation
Development of the Climate Transition Plan
Over the course of 2024, Aroundtown has significantly revised its Climate Transition
Plan (previously referred to as the CO
2
Reduction Pathway), which outlines the strategy
for achieving our published target of 40% reduction in CO
2
emissions intensity by
2030 compared against the 2019 baseline.
The Climate Transition Plan prioritizes the Group’s least energy-efficient assets for initiatives
aimed at improving energy performance. The assets are identified according to their
exposure to emerging regulation focused on building energy efficiency, emissions reduction
and decarbonization, namely the EU Energy Performance of Buildings Directive (EPBD),
which sets efficiency requirements that buildings must meet over the next 10 years. The
need for intervention is determined by the building’s energy rating, which indicates the
asset’s current energy performance and whether it complies with regulatory requirements.
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In the updated approach of the Climate Transition Plan, property-level data is collected
through energy audits to better understand the current situation and consider key
decarbonization levers that can be implemented for each property. Specifically, energy
savings and cost data are gathered through these energy audits to assess the impact
of distinct investment packages against their economic feasibility, considering the
unique local market dynamics for each property. The sample of data collected from
energy audits is used to calculate energy savings and cost parameters for the relevant
asset types, which are then extrapolated across the portfolio. Energy audits are still
being conducted on an ongoing basis, and as the sample size increases, the Group’s
plan is continuously updated to improve its accuracy. Additionally, the Group plans
to use implementation data from current pilot projects to validate cost assumptions
embedded in the plan.
The targets for which the Climate Transition Plan is designed to address are currently
not compatible with the limiting of global warming to 1.5°C in line with the Paris
Agreement. Please refer to section E1.SBM-3 and E1.IRO-1 on the identification and
analysis of material climate-related impacts, risks, and opportunities for details on how
CRREM’s target pathways were used to develop the scenario informing consideration of
whether the Group’s target’s compatibility with the limiting of global warming to 1.5°C
in line with the Paris Agreement, which the Group applied in its assessment.
Decarbonization Levers
The energy audits discussed above provide valuable insights into the energy impact and
cost implications of key decarbonization levers. This information is collected into key
investment packages that combine energy efficiency measures and renewable energy
systems. These packages prioritize addressing exposure to emerging energy efficiency
regulations as a primary focus. Decarbonization levers identified in the Group’s own
operations and downstream in the value chain (i.e. in tenant spaces) identified, with the
only upstream measures being energy procurement, include the following:
y
Installing Solar PV systems
y
Pipe insulation, hydraulic balancing, and heating automation measures
y
Digitalization and optimization of heating systems
y
Installation of air-source heat pumps and hybrid heat pump systems.
y
Renewable energy procurement and grid decarbonization.
y
Connect to district heating and the planned decarbonization of heating grids.
y
Building envelope improvements (insulation, windows)
Key actions planned at this stage involve investments in PV systems and renewable
energy procurement, while pilots have been initiated to begin digitalization,
optimization of heating systems, and heating automation measures as well as
installation of air-source heat pumps and hybrid systems in order to understand their
feasibility on a larger scale. When these measures relating to the heating system
are implemented, the possibility for hydraulic balancing to further improve energy
efficiency is also considered. Pipe insulation, transition to district heating, and
building envelope improvements are only considered when building-specific energy
audits have suggested their feasibility since these measures are highly sensitive to
the situation at each property, with the decision on whether to invest depending on
financial feasibility.
Locked in GHG Emissions and Exposure to Fossil Fuel Activity
The heating systems in our properties typically have an operational lifespan of up
to 30 years. Hence, the investment decisions taken today have an impact on locked-
in GHG emissions during this time period. We are aware of this risk and take this
into consideration when planning renovation measures and replacement of heating
systems. We strive to deploy low-carbon (e.g., hybrid-heating) or fully electric heating
systems (e.g., heat pumps) wherever economically and operationally possible, however
barriers to their implementation, primarily local grid capacity and technical feasibility
of specific properties, persist. It is also important to note that our business has not
invested CapEx related to coal, oil, and gas-related economic activities as defined
under ESRS E1 paragraph 16f. We don’t consider our business excluded from EU
Paris-aligned benchmarks, as outlined in ESRS E1 paragraph 16g, as Aroundtown is
a real estate management company and does not materially engage in fossil fuel or
energy sector activities.
(*)
CapEx Planning and Integration into the Business Strategy
We are currently developing detailed CapEx plans that will be integrated into
our overall business planning. These plans are in their early stages following the
reformulation of the Climate Transition Plan’s methodology and energy audit process.
Based on the current findings of the Climate Transition Plan, the Group has estimates
of the CapEx required to meet the target but has not yet formally allocated the CapEx
over the medium-term.
The primary reason for this is to allow for real project data
(*)
for specific list of exclusion criteria, please refer to Articles 12.1 (d) to (g) and 12.2 of the Climate Benchmark Standards Regulation
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to be collected from pilots currently under implementation to ensure accuracy of the
data before formal CapEx allocation. Further details on these plans will be provided in
future reports. The Climate Transition Plan solely focuses on CapEx measures as these
are the primary measures through which building energy consumption and emissions
can be reduced, thus OpEx plans are not involved in the strategy at this time.
The EU Taxonomy offers several options for aligning OpEx, CapEx and asset alignment
with its criteria. Over the past few years, we have undergone extensive EU Taxonomy
alignment exercises and provided a detailed description of our applied methodology
for calculations, which can be found in the EU Taxonomy Disclosures section along
with applicable definitions and key terms relevant to the EU Taxonomy Framework
mentioned here. The Climate Transition Plan outlined in this chapter, in particular its
decarbonization levers, key actions, and CapEx plans, will increase taxonomy-aligned
CapEx share regarding individual measures (Activities 7.3 through 7.6) as these are
eligible activities likely to meet the technical screening criteria. However, aligned
CapEx is also subject to Do No Significant Harm (DNSH) checks where data limitations
may cause eligible CapEx to not be designated as Taxonomy-aligned. Regarding
activity 7.2, the extent to which these measures will lead to a 30% reduction in
primary energy demand is still under assessment, as are whether the measures will
increase shares of taxonomy-aligned OpEx and Revenue. A more precise mapping
between decarbonization levers and applicable EU Taxonomy activities can be found
in Table 14 in the E1-3 Actions section.
As part of the redevelopment of the Climate Transition Plan, properties facing
significant exposure to current and emerging regulations were identified and the
investment packages outlined in the energy audit process were presented to the
operational teams. In order to ensure the Climate Transition Plan is integrated in the
business strategy, operations provided key feedback on the business plans for these
assets as well as the local market dynamics that influence return on investment. The
process was also designed for embedding in the Group financial planning through
holistic consideration of costs and returns, exploring the possibility of passing portions
of the CapEx costs on to the tenants who enjoy reduced operational costs from energy
savings. Available public funding programs for energy-efficiency saving measures
were also considered. Such factors were considered holistically in order to determine
the economic feasibility of proposed interventions in order to develop a plan that
can be integrated into the business strategy and financial planning of the Group.
The outline provided by the Climate Transition Plan and outputs of property-specific
energy audits are to be handed over to the operational and construction departments
for development of asset-level plans and execution.
After working with operations to better understand the economic feasibility of the
current Climate Transition Plan, which primarily focuses on mitigating exposure to
current and emerging regulation while achieving the current emission reduction target,
the Climate Climate Transition Plan was presented to the Management Body. As a
result of this process, the CapEx amount stated above and the underlying plan were
approved while specific budgets were allocated to pilot projects for the considered
decarbonization technologies, which are currently under implementation.
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IMPROVED ENERGY EFFICIENCY OF THE PORTFOLIO THROUGH:
Aroundtown Group Transition Plan Implementation
Refurbishments of building evelopes
Energy-improvement investments
Window
replacements
Roof, façade,
& basement
insulation
Digitization (monitoring/controlling)
of consumption data
Smart
meters
Smart
heating
Smart
Thermostats
Solar PV
Air
conditioning
& ventilation
EV charging
Air source
heat pumps
Combined
heat & power
generation
LED systems
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EU Taxonomy Disclosures
During the past three years, Aroundtown has made significant progress in implementing
and adapting processes to gather critical data for EU Taxonomy reporting in line with
the environmental objective, Climate Change Mitigation. The below section provides
an overview of AT’s Taxonomy disclosures, its data gathering processes as well as
alignment checks conducted to determine and calculate EU-Taxonomy aligned
turnover, CapEx and OpEx.
Since 2023, a mid-year EU Taxonomy alignment exercise is performed, covering
eligible CapEx under the environmental objective Climate Change Mitigation. This
allows an earlier assessment of the status quo and provides an opportunity to enhance
process optimization for the final EU Taxonomy alignment assessment. This exercise
is performed by the Sustainability Department together with the Construction and
Operation Departments, as well as the Business and Group Controlling teams.
Furthermore, one of our objectives for aligning activities with the EU Taxonomy is to
ensure all relevant departments, including Construction, Operations, and International
Offices have a thorough understanding of the reporting requirements. To achieve this,
we conducted several ad-hoc training sessions in 2024, to address knowledge gaps
and provide refreshers for previous trainings. Furthermore, to ensure the accessibility
of information necessary for aligning with EU Taxonomy criteria, a construction
contract template was created this year, with provisions obliging contractors to provide
data relevant to EU Taxonomy reporting. The updated construction contract template
now includes a pollution prevention questionnaire (to be signed by contractors),
addressing the Do No Significant Harm (“DNSH”) criteria on Pollution Prevention
and Control. Additionally, the revised contract integrates explicit provisions on waste
disposal and recycling data, which supports alignment with the Circular Economy
requirements under the DNSH criteria for Climate Change Mitigation, with provisions
obliging contractors to provide data relevant to EU Taxonomy reporting.
With the view to long-term alignment, Aroundtown is working towards optimizing
its Enterprise Resource Planning (“ERP”) system for the comprehensive collection of
EU Taxonomy data. Following strategies are in place to continuously improve the
alignment with the EU Taxonomy:
y
Considering the substantial contribution to, and compliance with the DNSH criteria of
the EU Taxonomy when making decisions about renovations and new development
projects.
y
Focusing on achieving EU Taxonomy alignment for larger CapEx related to
construction of new buildings’ (Activity 7.1 under the EU Taxonomy Regulation) and
renovation of existing buildings (Activity 7.2), as these projects hold greater material
significance in terms of their environmental impact compared to smaller ones.
y
Data collection improvements through better utilization of our ERP System and
closer collaboration with our suppliers
.
Assessment of Aligned Activities
For an economic activity to be aligned with the EU Taxonomy, three requirements
need to be fulfilled:
1.
It must make a substantial contribution to the achievement of one or more
EU environmental objectives (“substantial contribution”)
2.
It does not significantly harm any other EU environmental objective (DNSH)
3.
It complies with minimum social standards on topics such as Human Rights,
Labor Standards and Anti-Corruption (“minimum social safeguards”)
Based on these requirements, checks for EU Taxonomy alignment relate to different
business levels at Aroundtown. Whereas substantial contribution to Climate Change
Mitigation is assessed at the individual asset or project level, the DNSH criteria
apply rather to the economic activity itself. The DNSH criteria for Climate Change
Adaptation and Circular Economy are assessed for AT as a whole. Compliance with
minimum social safeguards was also evaluated for Aroundtown at a Group level.
Substantial Contribution Assessments
Aroundtown assesses its substantial contribution to Climate Change Mitigation by
evaluating its acquisition, ownership, renovation, and new construction activities
against EU Taxonomy criteria. For acquisition and ownership of buildings (7.7),
turnover and OpEx are aligned only if properties meet strict energy efficiency
standards—either class A or top 15% of the market for primary energy demand. AT
applies a 15% benchmark approach for Germany, endorsed by the German Sustainable
Building Council (DGNB), while in the Netherlands, the United Kingdom and other
locations, EPC ratings (A and above) are used. New constructions (7.1) must have at
least 10% lower primary energy demand than national nearly zero-energy building
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standards, and larger buildings require airtightness, thermal integrity, and lifecycle
Global Warming Potential tests—though AT’s development activity remains limited.
Renovations (7.2) must achieve at least a 30% energy reduction within three years
or qualify as major renovations (touching 25% of the building envelope and meeting
national building energy efficiency laws). If projects fall short, they are assessed under
7.3 (energy-efficient equipment installation). In 2024, Aroundtown invested CapEx
also in EV charging stations (7.4), energy performance systems (7.5) and renewable
energy installations (7.6). These investments ensure the Group’s activities align with
climate mitigation goals, reinforcing sustainable property investments under EU
Taxonomy Guidelines.
Do No Significant Harm Assessments
Aroundtown’s DNSH assessments ensure that its activities contribute to Climate Change
Mitigation without negatively affecting other environmental objectives under the EU
Taxonomy. DNSH checks were conducted only for activities that met the substantial
contribution criteria, excluding new construction (7.1) due to a lack of available data. For
renovations (7.2), compliance was evaluated against four DNSH criteria: Climate Change
Adaptation, requiring a climate risk and vulnerability assessment; Protection of Water
& Marine Resources, which applies only to AT’s renovations of commercial assets, not
to residential buildings; Transition to a Circular Economy, ensuring that at least 70%
of construction and demolition waste is reused or recycled in line with Germany’s
Circular Economy Act (“KrWG”); and Pollution Prevention & Control, which mandates
that restricted toxic chemicals listed in the EU Taxonomy are not used in materials, with
compliance confirmed through supplier questionnaires. Whereas 7.3 was also subject to
the Pollution Prevention & Control assessment, the remaining activities (7.4, 7.5, 7.6, and
7.7) were reviewed primarily for fulfillment of DNSH Climate Change Adaptation. These
assessments help AT ensure that its real estate activities are aligned with EU sustainability
requirements, reinforcing environmental responsibility and regulatory compliance.
Social Minimum Safeguards
The processes of the social minimum safeguards are outlined through descriptions
of the Group’s Human Rights Due Diligence process in section S2-1 and as well as
disclosures on the applicable policy framework in section G1-2.
Climate Risk and Vulnerability Assessment
Whereas in previous years, Aroundtown referred to a city-level physical risk
assessment conducted through S&P Global Sustainable 1 for each of our strategic
locations, in 2024, this analysis was extended to an asset-level analysis. As a first step
of this updated climate risk and vulnerability assessment, a physical risk exposure
screening was conducted through a physical risk assessment tool, which is designed
to assess and quantify location-based physical risks.
The physical risk assessment tool is based on the CMIP6 generation of climate
models by the Intergovernmental Panel on Climate Change (“IPCC”) and it enables
organizations to evaluate potential hazards that could impact physical assets or
operations in specific locations. The screening of the AT portfolio involved checking
the asset’s exposure to River Flood, Storm Surge, Heat Stress, Precipitation, Fire
Weather, Drought, Cold Stress and Tropical Cyclone.
The assessment focuses on two climate scenarios for the years 2030 and 2050:
SSP2-4.5 and SSP5-8.5. Each scenario is based on the Shared Socioeconomic
Pathways (“SSPs”), each assuming varying forms of climate policy and socioeconomic
development, for which expected greenhouse gas levels in the Earth’s atmosphere
are used to model Representative Concentration Pathways producing quantitative
outputs including temperature and precipitation levels, as well as the likelihood of
physical climate-related risk events.
As a second step and ongoing analysis, those assets flagged at moderate to high-
risk within the physical risk assessment tool will be assessed further in early 2025
regarding their specific sensitivity and adaptive capacity. Only then a conclusive
decision on the necessity of adaptation solution implementation at an asset level can
be taken. Due to the size of the AT portfolio, this process is ongoing and may only be
completed in the following year.
Presentation of the Performance Indicators Relating to EU Taxonomy-
Aligned and EU Taxonomy-Eligible Economic Activities
In line with the regulatory requirements for EU Taxonomy reporting in 2024,
Aroundtown is disclosing the performance indicators in the table template provided
by the European Commission.
y
Proportion of turnover from products or services associated with EU Taxonomy-
aligned economic activities - disclosure covering year 2024
y
Proportion of OpEx from products or services associated with EU Taxonomy aligned
economic activities - disclosure covering year 2024
y
Proportion of CapEx from products or services associated with EU Taxonomy aligned
economic activities - disclosure covering year 2024
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Proportion of
Turnover
from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024
Financial year 2024
2024
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code(s)
Absolute turnover
Proportion of turnover
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Climate change migration
Climate change adaption
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Minimum safeguards
Proportion of
Taxonomy-
aligned (A.1)
or -eligible
(A.2) turnover,
2023
Category
enabling
activity
Category
transi-
tional
activity
€
millions
%
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Acquisition and ownership of buildings
CCM 7.7
448.2
29.1%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
24.5%
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
448.2
29.1%
29.1%
0.0%
0.0%
0.0%
0.0%
0.0%
24.5%
Of which enabling
-
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
N
N
N
N
N
N
N
0.0%
E
Of which transitional
-
0.0%
0.0%
N
N
N
N
N
N
N
0.0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Acquisition and ownership of buildings
CCM 7.7
1,094.1
70.9%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
72.68%
Turnover of Taxonomy- eligible but not environmentally
sustainable activities
(not Taxonomy-aligned activities) (A.2)
1,094.1
70.9%
70.9%
0.0%
0.0%
0.0%
0.0%
0.0%
72.68%
A. Turnover of Taxonomy-eligible activities (A.1 + A.2)
1,542.3
100.0%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
97.17%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy- non-eligible activities
-
0,0%
TOTAL (A + B)
1,542.3
100,0%
Metrics: EU Taxonomy
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Financial year 2024
2024
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code(s)
Absolute OpEx
Proportion of OpEx
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Climate change migration
Climate change adaption
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Minimum safeguards
Proportion
of
Taxonomy-
aligned
(A.1) or
-eligible
(A.2) OpEx,
2023
Category
enabling
activity
Category
transi-
tional
activity
€
millions
%
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Acquisition and ownership of buildings
CCM 7.7
164.5
34.7%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
28.1%
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
164.5
34.7%
34.7%
0.0%
0.0%
0.0%
0.0%
0.0%
28.1%
Of which enabling
-
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
N
N
N
N
N
N
N
0.0%
E
Of which transitional
-
0.0%
0.0%
N
N
N
N
N
N
N
0.0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Acquisition and ownership of buildings
CCM 7.7
309.6
65.3%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
71.94%
OpEx of Taxonomy- eligible but not environmentally sustainable
activities (not Taxonomy-aligned activities) (A.2)
309.6
65.3%
65.3%
0.0%
0.0%
0.0%
0.0%
0.0%
71.94%
A.
OpEx of Taxonomy-eligible activities (A.1+A.2)
474.1
100.0%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy- non-eligible activities
-
0,0%
TOTAL(A + B)
474.1
100,0%
Proportion of
OpEx
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
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Proportion of
CapEx
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
Financial year 2024
2024
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code(s)
Absolute CapEx
Proportion of CapEx
Climate change mitigation
Climate change adaptation
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Climate change migration
Climate change adaption
Water and marine resources
Circular economy
Pollution
Biodiversity and ecosystems
Minimum safeguards
Proportion
of
Taxonomy-
aligned
(A.1)
or eligible
(A.2) CapEx,
2023
Category
enabling
activity
Category
transi-
tional
activity
€
millions
%
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N; N/
EL
Y; N;
N/EL
Y; N;
N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Renovation of existing buildings
CCM 7.2
9.6
1.17%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
Y
Y
Y
N/EL
Y
0.48%
T
Installation, maintenance and repair of energy efficiency equipment
CCM 7.3
5.9
0.72%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
Y
N/EL
Y
0.52%
E
Installation, maintenance and repair of charging stations for electric
vehicles in buildings (and parking spaces attached to buildings)
CCM 7.4
0.4
0.00%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.07%
E
Installation, maintenance and repair of instruments and devices for
measuring, regulation and controlling energy performance of buildings
CCM 7.5
1.9
0.23%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.24%
E
Installation, maintenance and repair of renewable energy technologies
CCM 7.6
1.4
0.17%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.23%
E
Acquisition and ownership of buildings
CCM 7.7
-
0.00%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
8.38%
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
18.8
2.29%
2.29%
0.0%
0.0%
0.0%
0.0%
0.0%
9.92%
Of which enabling
9.2
1.12%
1.12%
0.0%
0.0%
0.0%
0.0%
0.0%
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.99%
E
Of which transitional
9.6
1.17%
1.17%
N/EL
Y
Y
Y
Y
N/EL
Y
0.48%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
EL; N/EL
Construction of new buildings
CCM 7.1
14.6
1.78%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
2.06%
Renovation of existing buildings
CCM 7.2
12.8
1.57%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
2.16%
Installation, maintenance and repair of energy efficiency equipment
CCM 7.3
12.4
1.51%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
1.63%
Installation, maintenance and repair of instruments and devices for
measuring, regulation and controlling energy performance of buildings
CCM 7.5
0.8
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Installation, maintenance and repair of renewable energy technologies
CCM 7.6
-
0.00%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.00%
Acquisition and ownership of buildings
CCM 7.7
715.0
87.32%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
79.35%
CapEx of Taxonomy- eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
754.8
92.18%
92.18%
0
0
0
0
0
85.21%
A.
CapEx of Taxonomy-eligible activities (A.1+A.2)
773.6
94.48%
94.48%
0.0%
0.0%
0.0%
0.0%
0.0%
95.12%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy- non-eligible activities
45.2
5.52%
TOTAL(A + B)
818.8
100.0%
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E1.SBM-3 and E1.IRO-1 Identification and Analysis of Material Climate-
Related Impacts, Risks, and Opportunities and their Interaction with the
Strategy and Business Model
Material Climate Related Risks
Aroundtown employs a structured methodology to identify impacts, risks, and
opportunities (“IRO”) by integrating ESG considerations into its risk management
framework. Please refer to sections IRO-1 and SBM-3 of this report for more details.
As a result of our DMA, the following transitional climate-related risks were identified:
y
Transition to low carbon economy (incl. Net Zero Carbon):
Potential financial and
operational risks arising from stricter GHG emissions regulations and increasing
carbon reduction requirements.
y
Transition legislation:
Evolving climate-related regulations may impose additional
costs or operational adjustments.
y
Renewable energy deployment:
Risks associated with the availability, cost, and
integration of renewable energy sources into existing operations.
If not effectively managed, these risks have the potential to pose a financial risk for
the Group. These risks are heavily influenced by political and regulatory developments
anticipated during the transformation process in the coming decades. We closely monitor
these developments to adapt our operations and strategic decisions, safeguarding the
business from financial risks while maintaining the necessary pace of transformation.
Climate-Related Risk Assessment
The Sustainability Department, in close collaboration with the Chief Risk Officer,
conducts an annual resilience analysis of identified climate-related transitional risk
factors. The findings are presented to the Risk Committee for review and adjustments,
which are ultimately used to inform the Risk Committee and the Board of Directors
on whether adjustments in the business strategy are warranted. In alignment with the
recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”)
(1)
,
Aroundtown also describes the potential opportunities which the Group has identified in
each of these factors. During the climate-related risk assessment the Group qualitatively
considered the scenarios laid out by the IPCC’s shared Socioeconomic Pathways
(2)
as well
as the International Energy Agency (“IEA”) transition scenarios, specifically the Stated
Policies Scenario (“STEPS”) which was also rooted in current policy observations as well
as the Net Zero GHG Emissions by 2050 scenario
(3)
. The time horizons defined short-,
medium- and long-term in the assessment are aligned with ESRS 1 6.4. The short- and
medium-term time horizons are linked to the capital allocation planning and the strategic
planning cycles of the Group, depending on the nature of the plans in place, while the
long-term time horizon is primarily used to consider the expected lifetime of assets.
The qualitative resilience analysis is conducted annually, with the most recent exercise
being in 2024, using the previous years analysis as a baseline and then incorporating
observed developments in risk factors in AT’s countries of operation over the elapsed
year, as well as any material changes in the scenarios used. No changes to scenarios
were identified in 2024. The analysis was conducted at the corporate level, i.e. aligned
with the financial consolidation scope, considering the long-term outlook provided by the
scenarios stated above, while also factoring current observations in the Group’s countries
of operation and the context of its business model and activities.
Table 12 below summarizes the identified risks and impacts while outlining the mitigation
strategies employed to manage these risks within our organization.
(1)
Recommendations of the Task-Force on Climate-related Financial Disclosures
(2) the SSPs used in the
IPCC AR6 report
were published in the journal
Global Environmental Change under the title The Shared
Socio-economic Pahtways: Trajectories for human development and global environmental change
(3) Current formulations of the scenarios are outlined in the
IEA World Energy Outlook 2024 report
29.1%
100%
100
%
Taxonomy-aligned, eligible and non-eligible percentages of Aroundtown’s KPIs
Eligible
Aligned
Non-eligible
94.5%
5.5%
2.3%
34.7%
Turnover
OpEx
CapEx
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Table 12 -
Climate-related risk, impact, and opportunity assessment aligned with the TCFD Framework
Risk Category
Description
Impacts and Timeframe
(S = short-term, M = medium-term, L = long-term)
Mitigation Strategy
Opportunity
Policy
Climate-related regulations and laws are changing
rapidly, placing stricter requirements on energy and
GHG emissions performance while raising ques
-
tions on whether assets may become “stranded”
by regulation. Carbon pricing schemes have taken
a relatively clear shape in Germany, the Group’s
primary country of operation. The EU recast its En
-
ergy Performance of Buildings Directive (“EPBD”)
in 2024, introducing clear Minimum Energy Per
-
formance Standards (“MEPS”) for non-residential
buildings through 2033, and then leaving it to
member states to implement pathways to a ze
-
ro-emission building stock by 2050. Member states
now must implement the EPBD into national law
by Spring 2026, although this implementation has
become highly uncertain due to the rightward shift
in the EU Parliament which is looking to roll back
elements of EU Green Deal combined with political
upheavals in key states which are the Netherlands
and Germany. The gap between the medium-term
MEPS outlined in the 2024 EPBD and its final goal
of a net-zero building stock by 2050 are significant,
raising many important questions on the specific
pathways that EU member states must clarify.
Carbon pricing and enhanced GHG emissions-re
-
porting obligations are poised to cause higher
operating and compliance costs. MEPS and other
energy-related requirements are poised to requi
-
re significant CapEx in order to maintain building
compliance, although the precise levels cannot yet
be determined due to political uncertainty surroun
-
ding national implementation of the EPBD.
In Germany, the suspension of grant and subsidy
programs for energy-related renovation of exis
-
ting assets since several years has removed a key
incentive that would improve the financial impact
mitigating actions have on the Group.
(S, M, L)
In 2024, the Group launched an extensive review
of its Climate Transition Plan underlying its climate
ambitions, integrating data from its updated energy
audit process to consider efficiency-improving mea
-
sures while also leveraging Carbon Risk Real Estate
Monitor (“CRREM”) pathways to consider the level of
action needed to achieve reductions consistent with a
1.5-degree scenario. Potential updates to the Group’s
stated target are still under review, awaiting comple-
tion of further energy audits to increase the sample
size while awaiting implementation data from pilot
projects to validate key assumptions. Nonetheless, the
Climate Transition Plan targets the most inefficient
assets for intervention to ensure the current carbon
reduction target will be met while also mitigating
exposure to the medium-term MEPS specifically out
-
lined by the EU in the EPBD recast in an economical
manner. The Group anticipates that increased climate
ambition will be needed, but is also confident that
the Climate Transition Plan now effectively considers
emerging policies against potentially more aggres
-
sive policy scenarios to effectively plan its business
activities in a way that manages transitional risks in
the face of current political uncertainty in the EU. The
Group is also actively monitoring public support for
energy-related renovation of commercial assets to
ensure these are factored into any renovation plan
-
ning, although these programs in Germany remain
suspended.
The Group expects opportunities
in the policy-driven transition to
more efficient buildings in the form
of lower operating costs, reduced
stranding risks and decreased ex-
posure to variations in the cost and
availability of natural resources. It
is widely viewed that more efficient
buildings may also attract higher
valuations through improved ener-
gy performance and become more
attractive to investors, tenants and
financial institutions. The Group also
sees a general opportunity to ensure
long-term value from its operations
through active monitoring of poli
-
cy developments as they occur and
planning interventions in a pragma-
tic and economical manner.
Legal
Emerging climate-related policies and regulations
increasingly contain specific legal requirements
placed on economic actors. Companies may become
subject to lawsuits alleging failure to take sufficient
actions to reduce greenhouse gas emissions or
to account for or disclose known climate-related
risks. Climate-related litigation may also arise from
inaccurate non-financial reporting or misleading
sustainability claims such as “greenwashing”. In the
EU, such misleading or false environmental claims
could face fines, as the European Parliament and EU
Council adopted their positions on the Green Claims
Directive in 2024, with negotiations ongoing.
With stricter EU regulation, including the EU Taxo
-
nomy, CSRD, and SFDR, the real estate sector has
already felt the pressure of environmental legisla
-
tion. The significant gaps between current regula
-
tions and the carbon budgets of the Paris Agree
-
ment make further regulatory tightening over the
mid- to long-term likely. It is also possible that the
scope of these regulations expands to take in more
segments of the Group‘s value chain, increasing
potential exposure and compliance costs. While
climate-related litigation has primarily targeted
governments and fossil fuel companies to date, it is
possible that other sectors such as real estate may
be targeted over the long term.
(L)
Our dedicated Sustainability Department works to
ensure accurate and high-quality non-financial re
-
porting, while constantly monitoring changes in re
-
gulations to identify gaps and facilitate compliance.
This involves not only monitoring current legislati
-
ve initiatives but also assessing the gaps between
current policy and science-based climate targets to
anticipate future changes.
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Table 12 -
Climate-related risk, impact, and opportunity assessment aligned with the TCFD Framework
Risk Category
Description
Impacts and Timeframe
(S = short-term, M = medium-term, L = long-term)
Mitigation Strategy
Opportunity
Market
Tenant preferences for low or zero-carbon prop
-
erties are likely to reduce demand for inefficient
properties. Likewise, evolving investor preferenc
-
es for sustainable and resilient assets could drive
higher valuations for green buildings.
Financial institutions in the EU are increasingly in
-
corporating climate-related criteria in their financ
-
ing and investing practices.
Market conditions may shift from „green premiums“
for low- or zero-carbon assets to „brown discounts“
in rent or valuation for assets with high energy or
carbon intensities.
The age of German building stock, where the Group
primarily operates, combined with our business
model of acquiring and managing existing build
-
ings, poses significant challenges in offering low
or zero-carbon properties through the level of in
-
vestment that is required. Inability to meet tenant
preferences may increase vacancies and reduce rev
-
enues while inability to meet market expectations
may reduce access to capital.
The current focus among the majority of financiers
lies on ensuring regulatory compliance over a typ
-
ical loan term (up to 10 years), which is unlikely to
change despite the rightward shift in EU politics.
A niche subset call for Paris-alignment, although
they are not yet large enough in number to shift
market conditions, although this may change over
the long term.
Shifting market demand may put downward pres
-
sure on the value of “brown” assets which are not
in line with market expectations, thereby reducing
the availability of capital and increasing the cost
of debt. Increasing sustainable finance regulation
is forcing tenants and investors to report on their
sustainable actions, which in turn increases these
demands on the Group. The existing market struc-
ture leaves landlords responsible for capital expen
-
ditures needed to improve energy efficiency of ex
-
isting assets with limited ability to recover reduced
utility expenses enjoyed by the tenant.
(L)
The Group is working with tenants to reduce energy
and utility consumption as part of specific green lease
agreements and tenant awareness campaigns, as well
as increasing engagement with our tenants on their
green building expectations and needs.
The Group is working on collaboration and cost-sha
-
ring arrangements with tenants in energy-efficiency-
improving renovations to mitigate risks posed by the
current market structure.
The Climate Transition Plan prioritizes the most
inefficient assets in the portfolio for assessment of
possible interventions to determine economic feasi
-
bility of investments that will protect or improve their
value. This Climate Transition Plan will be subject to
ongoing development to ensure alignment to market
standards.
Developments made to the Climate Transition
Plan over 2024 have focused on ensuring current
and emerging regulatory requirements will be met
(primarily those of the EU EPBD), leaving the Group
in a strong position to meet the expectations of
investors and financiers over the short-to-medium
term. The Climate Transition Plan also considers a
Paris-aligned scenario through use of the CRREM
pathways, leaving the Group prepared to handle
shifts toward more aggressive climate-related re
-
quirements should they materialize.
Aroundtown’s scale provides eco-
nomic benefits which result in com
-
petitive advantages in repositioning
assets with development potential
in terms of energy efficiency or
climate resilience. This could cre-
ate growth opportunities through
the acquisition of such assets from
owners without capability to make
the required upgrades.
Low
and zero-carbon
buildings
will be better positioned to reflect
shifting tenant preferences, as well
as investor demands, positively
impacting rents and access to cap-
ital. Green assets may strengthen
business resilience by increasing
revenue through new products and
services that meet market demands
and may improve access to capi
-
tal and debt. Green bond issuance,
sustainability-linked loans or ener
-
gy efficiency-related subsidies for
buildings can be used to improve
the financial feasibility of making
the needed investments, although
not all green financiers offer in
-
centives adequately adjusted to the
expected level of CapEx placed on
the Group.
Energy
Energy markets are more prone to price fluctuations
driven by supply crunches or swings in energy
demand. This leads to risks associated with high
energy and utility consumption and over-reliance
on fossil-fuel derived energy supplies.
Energy-market risks associated with reliance on
fossil fuels, have become a pressing issue following
the Russian war in Ukraine and the sharp rise in
energy prices. This has led many sectors, including
the real estate sector, to call for accelerating the
transition to a low-carbon economy. Nonetheless,
the current energy mix of most grids remain pri
-
marily reliant on fossil fuels, as renewable energy
generation and energy storage capacities are still
insufficient to meet decarbonization goals required
for a decarbonized energy system.
(S, M, L)
The Group aims to reduce reliance on fossil fuels
through its target to procure 100% of landlord-ob
-
tained electricity through power purchase agree
-
ments (PPAs), as well as through installation of
onsite renewable energy systems. Investments in
energy efficiency will also reduce energy costs, mit
-
igating exposure to variations in price.
Increasing procurement of ener
-
gy from renewable sources and a
shift to decentralized energy gen
-
eration can reduce operational and
compliance costs, as well as expo-
sure to volatile fossil fuel markets.
Green bond issuance or sustain
-
ability-linked loans can be used to
improve the financial feasibility of
making the needed investments if
meaningful incentives are offered
by financiers.
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Table 12 -
Climate-related risk, impact, and opportunity assessment aligned with the TCFD Framework
Risk Category
Description
Impacts and Timeframe
(S = short-term, M = medium-term, L = long-term)
Mitigation Strategy
Opportunity
Technology
Aroundtown recognizes that current technologies
are insufficient to achieve the grid decarboniza
-
tion needed to address climate change, and this is
expected to increase the pace of technological de
-
velopment. Additionally, policies have emerged in
the EU and UK requiring a phase-out of fossil fuel
boilers, with some technical exceptions.
Insufficient monitoring of technological develop
-
ments or regulatory requirements may lead to in
-
vestment in technologies that become obsolete be
-
fore the end of their operational lifespan. Buildings
with obsolete technology systems may experience
reduced demand and require higher maintenance
costs/CapEx requirements to meet minimum ef
-
ficiency standards and modern work, leisure and
residential trends. Exposure is ultimately low since
all phase-out regulations allow heating systems to
reach the end of their use life.
(M, L)
The Energy and Operation Departments monitor reg
-
ulatory developments and emerging technologies on
the market and evaluating their costs and potential
to enhance energy efficiency and carbon profiles of
buildings. The energy-related procedures outlined in
the new Environmental Policy emphasize prioritiza
-
tion of investment towards proven and cost-effective
technologies.
The Group sees significant oppor
-
tunity to engage with and invest
in prop-tech companies to ensure
modern, forward-thinking and ap
-
propriate technological outfits of
the Group‘s properties. In order to
realize this opportunity, the Group
has launched its ATechX accelerator
program to identify and scale rele
-
vant technological solutions.
Reputation
Companies seen as taking insufficient climate
action or delaying climate action face increasing
scrutiny and criticism from tenants, investors, the
media, and society at large. Additionally, current
and future generations of employees hold greater
expectations for companies to act to address
climate change.
Any deficiencies in the climate strategy of the
Group could expose it to criticism from societal
actors, diminishing the Group’s reputation. Errors in
non-financial reporting may be seen as fraudulent
or “greenwashing”. Reputational damage from inac
-
tion on climate change may also reduce the ability
to recruit and retain talent in the medium- to long-
term.
(S, M, L)
The Sustainability Department monitors best prac
-
tices and societal trends to identify and act on gaps
in the Group‘s climate strategy and brings them
to the attention of relevant internal stakeholders
while working to ensure high-quality sustainability
disclosures. Clear communication on the Group’s
sustainability, climate risk actions and carbon re
-
duction targets will reassure employees, potential
candidates and investors of the Group‘s continued
efforts with regard to climate change mitigation
and adaptation.
Through meeting or exceeding
requirements,
expectations,
or
best practices, the Group may be
able to positively improve its rep
-
utation. This can also improve the
Group‘s ability to attract and retain
critical talent.
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Quantitative scenario analysis of climate-related risks faces challenges due to missing
data, as climate scenarios often extend far beyond time horizons conventionally
applied in strategic business planning. Despite this, the Group was also able to
conduct a targeted, quantitative scenario analysis on the impact of emerging energy
efficiency regulation, namely the EU EPBD, using available data of its direct operations
in Germany. This analysis was used to inform the redevelopment of the Climate
Transition Plan, described in further detail below. During the redevelopment of the
Climate Transition Plan in 2024, discussed in section E1-1, the explicit requirements
of the current regulatory outlook over the next 10 years were considered as a “current
policy” scenario, while the 1.5-degree pathways provided by CRREM, which follows
the Sector Decarbonization Approach to translate science-based pathways to asset-
type-specific pathways
(*)
. The projected CRREM pathways over the next 10 years
were used to assess the requirements of a possible Paris-Aligned transition scenario,
compared against the current policy scenario stated above. Distinct investment
packages considered during development of the Climate Transition Plan represent a
modular approach tailored to the policy requirements of the scenarios.
The costs and impacts of measures related to heating, renewable energy, and
technical systems form one set of investment packages, while measures relating to
thermal efficiency and the building shell constitute another set of packages. While the
Climate Transition Plan currently prioritizes measures needed to meet explicit policy
requirements and the Group’s GHG emission reduction target, the scenario analysis
conducted lays the groundwork for adapting to a potential increase in policy ambitions.
This analysis involved a more targeted scope, specifically the operational control
portfolio used in the Group’s annual GHG emission reporting outlined in the Coverage
subsection under methodological notes of section E1-6 limited to assets in Germany,
with plans to expand this scope over time. This scope was also applied in the Climate
Transition Plan discussed in section E1-1. As with our annual energy consumption and
GHG emissions reporting in sections E1-5 and E1-6, this includes the downstream
value chain segment of tenant-controlled spaces, representing GHG emissions falling
under Scope 3 Category 13.
Implications for the Business Strategy
Based on the results of the qualitative and quantitative elements of our resilience
analysis outlined above, our business model of providing commercial real estate in
core locations and our subsidiary Grand City Properties’ provision affordable residential
spaces in urban areas will remain relevant throughout every possible transformation
scenario. However, we expect to respond dynamically to political developments,
and capital market trends, ensuring the economic resilience of our business in any
transformation scenario. While the degree of severity of transition events can vary
significantly due to the gap between current policies and the Paris-Aligned scenario
noted several times in the discussion above, the most recent resilience analysis
leaves the Group confident in its ability to adjust its strategy and business model to
climate change should an increase in applicable policy ambitions occur.
Integration into Enterprise Risk Management Framework
Climate-related topics are treated as a corporate governance topic, with Aroundtown’s
Board of Directors and the Management Body sharing overall responsibility for
identifying, assessing and managing climate-related risks, impacts and opportunities.
Aroundtown’s Management Body and the Building Resilience Taskforce are co-
responsible for identifying, assessing and managing climate-related risks, impacts
and opportunities. A distinction is made between climate risks affecting the Group
at the corporate level, for which the Board of Directors and the Risk Committee are
the risk owner, and climate risks which impact our properties, which are owned by
AT’s Operations Department. In addition, the Taskforce on Building Resilience works
across departments to address climate risks, incorporating the perspectives of various
internal stakeholders. This collaborative effort focuses on developing action plans
and implementing adaptation solutions as needed.
To effectively manage climate-related risks, we first conduct risk assessments to
understand their potential financial, operational, and environmental impacts. The Risk
Committee oversees the Group’s risk management process, which includes assessing
the potential impacts of climate change. The Chief Risk Officer and the Sustainability
Department collaborate closely in conducting assessments of physical and
transitional climate risks. These assessments are presented to the Risk Committee at
least annually and on an ad hoc basis as needed throughout the year. Based on these
assessments, we identify relevant and practicable measures to mitigate risks, manage
impacts and maximize potential opportunities. Please see below AT’s Governance
Structure on Climate Risks:
(*) See CRREM’s report
From Global Emission Budgets to Decarbonization Pathways at Property Level
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The Management Body of Aroundtown is co-responsible for assessing and
managing climate-related risks. A distinction is made between climate risks
affecting the Group at the corporate level, for which the Management Body is the
risk owner, and climate risks which impact our properties, which are owned by the
Operations Department. In addition, our Taskforce on Building Resilience works
cross-departmentally to address climate risks across relevant business units,
developing action plans and adaptation solutions as necessary.
Governance Structure
on Climate Risks
Risk Committee
Oversees risk management, incl.
climate risks.
Management Body
Assessment and management of
climate-related risks at corporate level.
Sustainability Department
and Chief Risk Officer
Assessment of physical and transitional
climate risks.
Operations Department
Assessment and management of
climate-related risks on a property level.
Building Resilience Taskforce
Inter-departmental platform for the discussion
and collaboration on climate risks
Development of KPIs for climate risk and
action plans as well as adaptation solutions.
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E1-2 – Policies Related to Climate Change Mitigation and Adaptation
At Aroundtown we have defined a concise yet comprehensive policy outlining our
activities to mitigate and adapt to climate change. Our Environmental and Energy
Policy addresses the need to reduce our operational GHG emissions and includes
within our scope the reduction of energy and water consumption, as well as generation
of waste and air pollution. The respective targets on these topics set in this policy are
quoted in the corresponding sections of this report.
The Management Body are also responsible for reviewing and updating our Environmental
and Energy Policy, which was most recently updated in 2024. The policy aims to manage the
material impacts, risks and opportunities related to climate change mitigation and adaptation,
as well as other environmental topics, including air pollution and water management. The
policy does not involve third-party standards or initiatives in its implementation, as it primarily
focuses on improving environmental impacts through implementing decarbonization levers
mentioned in section E1-1. For this, the policy delineates responsibilities at the asset and
company-level between operations and Management Body.
The policy responds to all material impacts, risks, and opportunities outlined in our
DMA, as presented in section SBM-3 and IRO-1, specifically climate change mitigation,
and energy efficiency, as well as air pollution as discussed in section E2, while also
covering the non-material topics of water, pollution, and waste. The scope of the
policy applies globally to Aroundtown, specifically to its direct operations. The most
senior level of the Group responsible for its implementation is the Management
Body. The policy is publicly available to all stakeholders through the Sustainability
Governance web page on the Group website.
E1-3 – Actions and Resources in Relation to Climate Change Policies
In our business model, the primary decarbonization levers are to enable our tenants to
consume less energy (e.g. by improving the energy efficiency of our buildings) and by
transitioning the heating systems from fossil fuel-based systems to electric or carbon
neutral ones. Many of those investments are highly capital-intensive and require careful
coordination to minimize negative impacts on our tenants. Decarbonization levers are
discussed in more detail in section E1-1.
In the year 2024, the Group achieved an GHG emission reduction of 34% compared to its
2019 baseline, while the Group expects further GHG emission reductions in the amount
of 6% to achieve its 2030 target, in other words covering the short- and medium-term
horizons discussed in section E1-1. For more information on how the Group evaluates
progress against its GHG emission reduction target, refer to section E1-4.
Table 13 below presents the proportion each value chain stage and the associated
decarbonization measures driving GHG emission reductions needed to achieve the 40%
reduction target as outlined in the Climate Transition Plan discussed in section E1-1.
Out of the 6% remaining GHG emission reductions, the percentages in the table below
indicate the expected proportion among each scope.
Table 13-Total GHG emission reduction of the 40% target in context of the Climate Transition Plan
Value Chain Stage(s)
Decarbonization Lever
Proportion of
GHG Emission
Reductions
Upstream
Renewable energy procurement and grid
decarbonization
27.63%
Connect to district heating the planned
decarbonization of heating grids
Own Operations
(Landlord-controlled
spaces)
Installing Solar PV Systems
4.64%
Own Operations
(Landlord-controlled
spaces) &
Downstream (Tenant-
controlled spaces)
Pipe insulation, hydraulic balancing, and heating
automation measures
7.73%
Digitalization and optimization of heating systems
Installation of air-source heat pumps and hybrid heat
pump systems.
Building envelope improvements (insulation, windows)
As outlined in section E1-1, achieved and expected GHG emission reductions in the Group’s
pathway towards the 40% GHG emission reduction target, are based on the Group’s Climate
Transition Plan, with the applicable scope of the target and Climate Transition Plan being
the same. While investment in on-site PV has been ongoing for several years, the Group has
only just begun implementation of key actions in the framework of the Climate Transition
Plan such as heat pump and digitalization measures which are currently in pilot phases.
The Group has invested in several decarbonization levers discussed above in past years,
as shown in its current and past EU Taxonomy Disclosures, however these actions were
implemented without the required reporting lines in place to collect data at the granularity
required to accurately attribute the proportions of achieved GHG emission reductions to
each individual decarbonization lever. Thus, this disaggregation cannot be provided at this
time, with communication on achieved GHG emission reductions remaining at the portfolio
level. For more information on the current and future financial resources allocated to the
Climate Transition Plan, refer to sections E1-1 and the EU Taxonomy Disclosures, although
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Please refer to the EU Taxonomy Disclosures and Table 14 above and the surrounding
discussion to understand the relationship between the decarbonization levers and
the reported figures aligned to the EU Taxonomy. The Climate Transition Plan regards
the measures needed to achieve the Group’s GHG emission reduction target for the
year 2030, and thus the applicable time horizons are the short- and medium term as
defined by ESRS 1 6.4.
As identified through the redevelopment of the Climate Transition Plan discussed in
section E1-1 and the scenario analyses our entire asset base will require substantial
investments over the course of the coming decades. Access to capital from various
sources (e.g. green bonds, bank loans, public funding) will be critical to manage
this transition in the most cost-effective way. We will closely monitor and manage
developments to ensure we always have access to the capital required to drive
forward the transformation.
E1-4 – Targets Related to Climate Change Mitigation and Adaptation
Our fundamental commitment to climate change mitigation is evidenced by our
target of a 40% reduction in CO
2
emissions intensity by 2030, against our 2019
baseline. Please note that the sustainability information and related disclosures
for the year ended 31 December 2019 and included in this section have not been
subject to assurance procedures. To achieve this goal, we developed our Group-wide
Environmental and Energy Policy, which outlines how efficiency and renewable
energy projects will be targeted, identified, implemented and monitored.
Our efforts towards this target are guided by Aroundtown’s Climate Transition Plan,
which monitors our progress and forecasts the necessary rate of CO
2
emissions
reductions to achieve the 40% reduction target. We combine data on current energy
performance and EPC ratings with metrics on potential improvement measures to
develop a model of the entire portfolio. The suite of measures is derived from onsite
audits, desk-based energy simulations and EPC recommendations. We then evaluate
various combinations of energy efficiency measures and renewable energy systems to
assess - we can mitigate transition risks at each property. These insights are considered
alongside broader market and regulatory factors, to develop an investment action
plan aligned with the required carbon reduction targets.
In the context of the results of our DMA, as presented in sections SBM-3 and IRO-
1 under the ESRS 2 Disclosures, the following targets below address the material
impacts, risks, and opportunities relating to Climate Change Mitigation and Energy:
Table 14 –
Mapping Decarbonization levers to applicable EU Taxonomy Activities or
other relevant disclosures
Decarbonization lever
Applicable EU Taxonomy Activities or other relevant disclosures
Installing Solar PV systems
Installation, maintenance, and repair of renewable energy
technologies (7.6), and on-site renewable energy generation
disclosures can be found in Tables 17 and 18 in section E1-5.
Pipe insulation, hydraulic
balancing, and heating
automation measures
Installation, maintenance, and repair of energy efficient equipment (7.3)
Installation, maintenance and repair of instruments and devices
for measuring, regulation and controlling energy performance of
buildings (7.5)
Digitalization, optimization,
and replacement of heating
systems
Installation, maintenance, and repair of energy efficient equipment
(7.3)
Installation of air-source
heat pumps and hybrid heat
pump systems
Installation, maintenance, and repair of renewable energy
technologies (7.6)
Renewable energy
procurement and grid
decarbonization
N/A, although disclosures on renewable energy procurement can be
found in Tables 17 and 18 in section E1-5.
Connect to district heating and
the planned decarbonization
of heating grids
Installation, maintenance, and repair of energy efficient equipment
(7.3), and the reported consumption of assets connected to district
heating can be found in Tables 17 and 18 in section E1-5.
Building envelope
improvements (insulation,
windows)
Renovation of existing buildings (7.2), pending that projects reach
the scale needed to meet the technical screening criteria related to
the building shell.
I
f the above-stated requirements are not met this falls under Installation,
maintenance, and repair of energy efficient equipment (7.3)
as discussed in the former the Group is awaiting a larger sample size of energy audits and
actual data from pilot project implementation before providing more granular disclosures
on the time horizons applicable for future financial commitments.
Actions undertaken in the reporting year regarding the decarbonization levers are mostly
covered by the EU Taxonomy Disclosures, with some found in other relevant disclosures.
The table below maps decarbonization levers to relevant EU Taxonomy activities or
other disclosures, provided to support readers in understanding how disclosures in other
segments of this report relate to the decarbonization levers of the Climate Transition Plan.
It is important to note that the EU Taxonomy disclosure exercise has been an extremely
complex project improved gradually over several of the past reporting years although
significant data limitations remain that limit the ability to report all taxonomy-eligible
activities as aligned. These same data limitations prevent precise disaggregation and
remapping of reported EU Taxonomy figures across the decarbonization levers at this time.
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y
Achieve a 40% reduction in CO
2
intensity by 2030 against the 2019 baseline,
measured in CO
2
-equivalent emissions intensity (kgCO
2
e/m
2
)
y
Achieve a 20% reduction in energy intensity by 2030 against the 2019 baseline,
measured in kWh/m
2
y
Switch electricity to Power Purchasing Agreements (“PPAs”) certified renewable
electricity from wind, hydro-electric and solar PV sources by 2027
GHG Emissions Reduction Target
Table 15 below outlines the key details of the baseline, current, and target values for the
GHG emission reduction target. For an understanding of the identified decarbonization
levers and their quantitative contribution to achieve the GHG reduction target, refer to
the Decarbonization levers portion of section E1-1 and section E1-3.
Table 15 - Summary of the GHG Emissions Baseline, Current, and Target Values
Category Type
2019
2023
2024
2030
% Reduction
2030 v 2019
Scope 1 [kgCO
2
e/
sqm*year]
2.19
1.79
1.74
1.77
-1%
Scope 2 [kgCO
2
e/
sqm*year]
6.95
6.06
5.70
5.02
-4%
Scope 3 Category 13
GHG Emissions from
Fossil Fuels [kgCO
2
e/
sqm*year]
6.86
6.73
6.52
6.89
0%
Scope 3 Category 13
GHG Emissions from
Grid Energy [kgCO
2
e/
sqm*year]
35.47
21.06
19.81
17.20
-35%
Total carbon intensity
[kgCO
2
e/sqm*year]
51.47
35.64
33.77
30.88
-40%
GFA (sqm)
5,148,877
(*)
6,979,164
6,979,164
6,979,164
N/A
(*) Since 2019, Aroundtown has seen significant disposals and structural changes to its portfolio. When redeveloping the Climate
Transition Plan, only assets in the 2024 data set were included in the baseline figures presented here.
40% CO
2
e Reduction 2030 v 2019
Scope 1+2+3
Scope 1+2
Energy Consumption Reduction Target
Table 16 below provides key details on the Group’s energy reduction target of 20%
against the 2019 baseline, which has already been achieved.
Table 16 - Summary of the Baseline, Current, and Target Values of the Energy
Reduction Target
Category Type
2019
2023
2024
2030
% Reduction
2030 v 2019
Total energy intensity
[kWh/sqm*year]
173.61
123.21
120.44
138.89
-20%
GFA (sqm)
5,148,877
6,979,164
6,979,164
6,979,164
N/A
30,88
6,79
2030
2024
2023
2019
7.85
9,14
35,64
51,47
Figures in kgCO
2
e/sqm*year
33,77
7,44
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Methodological Notes on the Development and Monitoring of Energy
Consumption and GHG Emission Reduction Targets
The GHG emission and energy consumption reduction targets, as well as the renewable
energy target, are integral to the GHG emission- and energy-related aspects of the
Environmental and Energy Policy. It should be noted that these targets are directly
linked to one another due to the relationship between energy consumption and GHG
emission levels.
Development of the energy consumption and GHG emission reduction targets, and
development of the underlying Climate Transition Plan, required a methodology
allowing for measurement current performance in a way that is consistent with their
baselines while also allowing for projection into the future. This, combined with the
need to consider asset-specific characteristics regarding their thermal efficiency and
installed energy systems to plan specific CapEx measures, led to the decision to base
the baseline-to-target pathways on the energy rating (or EPC). This also involves
application of the DWD climate factor, as well as multiplying by the asset floor area
for conversion to absolute values, as explained in section BP-2, section E1-1, and the
methodological notes subsection in section E1-6.
Absolute GHG emissions and energy consumption target disclosures are not presented
in this report, as normalization by floor area is considered best practice in the real estate
sector to account for changes in portfolio size. Intensity values per square meter are not
only the key summary metric applied in EU EPCs but are also in-line with the Sector
Decarbonization Approach (“SDA”) adopted by sector-specific guidance by standard-
setting agencies such as CRREM and the Science-Based Targets Initiative (“SBTi”)
(*)
.
Approximate absolute values can be obtained by readers through multiplying intensity
values by the Gross Floor Area (“GFA”) provided in the relevant tables, while reduction
values can be obtained through determining the difference of the 2030 and 2019 GHG
emission values. Current and past progress towards these targets is calculated through
the percentage change against the baseline of the 2024 and 2023 column values,
respectively. These targets could only be formulated using the location-based approach,
as market-based target setting requires an understanding of future GHG emission
factors of grid energy which are not made available by utility service providers. The
methodological approach and boundaries applied in the baseline, target-setting, and
annual GHG emissions reports for the energy consumption and GHG emission reduction
targets are those described in the Coverage subsection in section E1-6, although the
Climate Transition Plan outlined in section E1-1 differs slightly in that it only focuses
on the direct operational control portfolio in Germany. For the years 2023 and 2024, this
involves the like-for-like portfolio, which consists of the same set of assets for both years,
for the applied scope, assuming a constant portfolio in the year 2030.
For an understanding of whether the energy and GHG emission reduction targets
are science-based and compatible with 1.5 degrees of global warming as well as
the climate scenarios considered in the development of the Climate Transition Plan’s
and the identified decarbonization levers, please refer to the discussion in section
E1.SBM-3 and E1.IRO-1.
The targets were originally set by Management Body, although during the
redevelopment of the underlying Climate Transition Plan the energy audits and
planned measures were presented to operations in order to gain a better understanding
of their operational and financial feasibility, as outlined in section E1-1. This approach
is relevant to the Group given that its business model focuses on the acquisition
and management of existing properties, with relatively limited construction and
renovation activity conducted in a targeted manner. The energy consumption and
GHG emission reduction targets do not have milestones or interim targets, although
the Group evaluates its progress against each target each year.
Renewable Electricity Procurement Target
The renewable electricity procurement is measurable, although its formulation does
not require a baseline value, as the objective is to achieve 100% of landlord-obtained
electricity from renewable sources covered by PPAs by 2027. Since the announcement
of this target, the Group has been progressively transitioning its electricity utility
contracts to a largescale supplier, in order to achieve a scale needed to begin for PPA
investments. Progress during this enabling stage has been slower than anticipated due
the terms of preexisting contracts and in some cases tenant preferences towards other
utility providers. In 2024, the Group signed a PPA contract to take effect in 2025, with
a volume expected to make up for the lack of progress in previous years to remain on
course to meet the target. It should be noted that the Group still procured a significant
share in 2024 of renewable electricity through Guarantee of Origin Contracts as shown
in the proportion of landlord-obtained electricity generated offsite from renewable
sources figures from
Table 17 and 18
in section E1-5. This target’s primary intention
is for the Group to fully take advantage of low hanging fruits in its operational energy
procurement, and in the Group’s view did not require science-based consideration and
scenario analysis in its target-setting as it was seen as a common-sense decision.
(*)
From Global Emission Budgets to Decarbonization Pathways, CRREM
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The scope encompasses the operational control in the German portfolio, as outlined
in the methodological notes on the energy consumption and GHG emission reduction
above. The methodology involves comparing the total contractual MWh values of PPA
contracts in place for the reporting year against the total landlord-obtained electricity
consumption outlined in Tables 17 and 18 in section E1-5, specifically considering the
German portfolio, following the associated methodological notes in section E1-6. This
target does not include interim milestones, however, progress is evaluated annually.
The target was originally set by Management Body, supported and overseen by the
dedicated Energy Department responsible for energy procurement.
E1-5 – Energy Consumption and Mix
In order to assess and monitor our progress towards our climate change-related
goals and commitments, we regularly collect data on utility consumption from our
assets, as shown in Tables 17 and 18. However, due to tenant data sharing restrictions,
we cannot monitor tenant-obtained energy consumption related to fuels or district
heating. Aroundtown understands the term “energy generation from non-renewable
sources” as electricity generated from combined heat and power (“CHP”) systems, for
which no data was available for assets under our operational control. The Group does
not directly consume coal or fossil sources other than those presented in Tables 17 and
18 below in its portfolio operations. Proportions can be calculated through dividing
the applicable metric over the total energy consumption. For an understanding of the
underlying methodology of data collection and calculation of figures in this table,
please refer to the methodological notes subsections of section E1-6.
The absolute energy intensity in Table 17 below increased in 2024 compared to 2023,
although it should be noted that data coverage increased significantly, with more
energy intensive assets added to the reported share of buildings. Observing the like-
for-like energy intensities in Table 18 below, which includes the same set of buildings
reported in both years, a slight decrease in energy intensity was observed.
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Table 17 - Absolute energy for managed assets
Energy reported in MWh
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
Elec-Abs
Elec-LfL
Electricity consumed for landlord shared services
51,973 MWh
61,248 MWh
30,731 MWh
35,076 MWh
1,652 MWh
515 MWh
2,987 MWh
3,036 MWh
16,603 MWh
22,621 MWh
Total landlord-obtained electricity consumed
51,973 MWh
61,248 MWh
30,731 MWh
35,076 MWh
1,652 MWh
515 MWh
2,987 MWh
3,036 MWh
16,603 MWh
22,621 MWh
Proportion of landlord-obtained electricity generated
offsite from renewable sources
63%
75%
52%
71%
62%
92%
73%
92%
87%
89%
Total landlord-obtained electricity generated and consu
-
med onsite from renewable sources
(*)
463 MWh
803 MWh
463 MWh
559 MWh
0 MWh
244 MWh
0 MWh
0 MWh
0 MWh
0 MWh
Total landlord-obtained electricity generated onsite from
renewable sources and exported
369 MWh
322 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
369 MWh
322 MWh
Total tenant-obtained electricity consumed
182,152 MWh
219,259 MWh
92,959 MWh
116,739 MWh
4,352 MWh
6,948 MWh
9,611 MWh
15,546 MWh
75,230 MWh
80,026 MWh
Total electricity consumed
234,125 MWh
280,507 MWh
123,691 MWh
151,816 MWh
6,004 MWh
7,463 MWh
12,598 MWh
18,581 MWh
91,833 MWh
102,647 MWh
Total electricity consumption data coverage, by area (sqm)
6,571,288 m
2
7,605,292 m
2
2,450,564 m
2
3,019,836 m
2
160,074 m
2
240,474 m
2
281,130 m
2
449,210 m
2
3,679,520 m
2
3,895,773 m
2
Proportion of landlord-obtained electricity consumption
and associated GHG emissions that is estimated
21%
47%
16%
51%
19%
22%
61%
28%
24%
43%
Proportion of tenant-obtained electricity consumption and
associated GHG emissions that is estimated
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion of total electricity consumption and associated
GHG emissions that is estimated
83%
88%
79%
89%
78%
95%
91%
88%
94%
94%
Fuels-Abs
Fuels LfL
Fuels (natural gas) consumed for landlord shared services
60,052 MWh
64,029 MWh
18,455 MWh
20,877 MWh
284 MWh
319 MWh
2,044 MWh
2,667 MWh
39,269 MWh
40,166 MWh
Fuels (oil) consumed for landlord shared services
3,639 MWh
5,038 MWh
1,232 MWh
1,165 MWh
0 MWh
74 MWh
0 MWh
0 MWh
2,407 MWh
3,799 MWh
Fuels (natural gas) allocated for tenant consumption
215,203 MWh
234,486 MWh
55,365 MWh
62,631 MWh
9,190 MWh
10,313 MWh
19,621 MWh
23,857 MWh
131,027 MWh
137,685 MWh
Fuels (oil) allocated for tenant consumption
11,730 MWh
19,582 MWh
3,696 MWh
3,494 MWh
0 MWh
2,408 MWh
0 MWh
0 MWh
8,034 MWh
13,680 MWh
Total landlord shared services fuels consumed
63,690 MWh
69,067 MWh
19,687 MWh
22,042 MWh
284 MWh
393 MWh
2,044 MWh
2,667 MWh
41,675 MWh
43,965 MWh
Total (landlord-obtained) fuels allocated for tenant
consumption
226,933 MWh
254,069 MWh
59,061 MWh
66,125 MWh
9,190 MWh
12,722 MWh
19,621 MWh
23,857 MWh
139,060 MWh
151,366 MWh
Total (landlord-obtained) fuels consumed
290,623 MWh
323,136 MWh
78,748 MWh
88,166 MWh
9,475 MWh
13,115 MWh
21,665 MWh
26,523 MWh
180,736 MWh
195,331 MWh
Proportion of total (landlord-obtained) fuels from renew
-
able sources
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total (landlord-obtained) fuels consumption data coverage,
by area (sqm)
3,148,004 m
2
3,455,738 m
2
1,116,396 m
2
1,297,276 m
2
112,884 m
2
183,585 m
2
252,437 m
2
246,343 m
2
1,666,287 m
2
1,728,533 m
2
Proportion of total (landlord-obtained) fuel consumption
and associated GHG emissions that is estimated
6%
11%
0%
0%
0%
4%
0%
0%
10%
17%
(*)
Over the course of 2024, the Group together with its partner organisation switched several installed on-site PV system contracts to allow for on-site consumption. As this was an ongoing process, insufficient data was available to calculate the precise net amounts consumed on site,
and values were assumed to be fully consumed on site based on the type of contract.
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Table 17 - Absolute energy for managed assets
Energy reported in MWh
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
DH&C-
Abs
Total district heating/cooling consumed for landlord-shared services
66,556 MWh
68,827 MWh
22,111 MWh
25,104 MWh
178 MWh
129 MWh
552 MWh
1,753 MWh
43,715 MWh
41,842 MWh
Total (landlord-obtained) district heating/cooling allocated
for tenant consumption
230,237
MWh
236,867 MWh
66,333 MWh
75,311 MWh
5,745 MWh
4,172 MWh
15,283 MWh
15,619 MWh
142,875 MWh
141,765 MWh
Total (landlord-obtained) district heating/cooling consumed
296,793
MWh
305,694 MWh
88,445 MWh
100,415 MWh
5,923 MWh
4,301 MWh
15,835 MWh
17,372 MWh
186,590 MWh
183,607 MWh
Proportion of total (landlord-obtained) district heating and
cooling from renewable sources
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total (landlord-obtained) district heating/cooling con
-
sumption data coverage, by area (sqm)
3,668,974 m
2
3,897,191 m
2
1,499,317 m
2
1,603,361 m
2
54,442 m
2
56,889 m
2
77,708 m
2
171,319 m
2
2,037,507 m
2
2,065,623 m
2
Proportion of total (landlord-obtained) district heating/cooling
consumption and associated GHG emissions that is estimated
8%
8%
5%
0%
0%
28%
0%
0%
11%
13%
Absolute
Energy
Total landlord shared services energy consumed
182,220 MWh
199,142 MWh
72,530 MWh
82,221 MWh
2,114 MWh
1,038 MWh
5,583 MWh
7,455 MWh
101,993 MWh
108,428 MWh
Total tenant-obtained/tenant-allocated energy consumed
643,194 MWh
718,822 MWh
218,353 MWh
258,175 MWh
19,288 MWh
23,842 MWh
44,515 MWh
55,021 MWh
361,038 MWh
381,784 MWh
Total landlord-obtained energy consumed
639,389 MWh
690,078 MWh
197,924 MWh
223,657 MWh
17,050 MWh
17,931 MWh
40,487 MWh
46,931 MWh
383,929 MWh
401,559 MWh
Total energy consumption
821,541 MWh
909,337 MWh
290,883 MWh
340,397 MWh
21,402 MWh
24,879 MWh
50,098 MWh
62,476 MWh
459,159 MWh
481,585 MWh
Total energy consumption data coverage, by area (sqm)
7,226,889 m
2
7,605,292 m
2
2,894,864 m
2
3,019,836 m
2
167,326 m
2
240,474 m
2
365,190 m
2
449,210 m
2
3,799,509 m
2
3,895,773 m
2
Proportion of landlord-obtained energy consumption and
associated GHG emissions that is estimated
8%
13%
5%
8%
2%
10%
5%
2%
11%
17%
Proportion of tenant-obtained energy consumption and
associated GHG emissions that is estimated
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion of total energy consumption and associated
GHG emissions that is estimated
29%
34%
35%
40%
22%
35%
23%
26%
26%
31%
Proportion of total energy generated offsite from renew
-
able sources
5%
6%
8%
11%
6%
3%
5%
6%
3%
3%
Proportion of total energy generated onsite from renewa
-
ble sources (consumed onsite or exported)
0.10%
0.12%
0.16%
0.16%
0.00%
0.98%
0.00%
0.00%
0.08%
0.07%
Total renewable energy consumption and generation
29,834 MWh
42,031 MWh
16,538 MWh
25,419 MWh
1,027 MWh
718 MWh
2,180 MWh
2,779 MWh
10,089 MWh
13,115 MWh
Total energy consumption from fossil sources
791,708 MWh
867,306 MWh
274,345 MWh
314,977 MWh
20,375 MWh
24,161 MWh
47,918 MWh
59,698 MWh
449,070 MWh
468,470 MWh
Total building energy intensity (kWh/sqm*year)
Energy-Int
Landlord-obtained building energy intensity for land
-
lord-obtained energy consumed
88.47 kWh/m
2
90.74 kWh/m
2
68.37 kWh/m
2
74.06 kWh/m
2
101.90 kWh/
m
2
74.57 kWh/m
2
110.87 kWh/
m
2
104.47 kWh/
m
2
101.05 kWh/
m
2
103.08 kWh/
m
2
Total building energy intensity for energy consumed
113.68 kWh/
m
2
119.57 kWh/
m
2
100.48 kWh/
m
2
112.72 kWh/
m
2
127.91 kWh/m
2
103.46 kWh/
m
2
137.18 kWh/m
2
139.08 kWh/
m
2
120.85 kWh/
m
2
123.62 kWh/
m
2
Mandatory Certificates (Energy Performance Certificates)
Cert-Tot
% of portfolio certified by floor area
84%
97%
81%
98%
70%
100%
71%
93%
89%
97%
AROUNDTOWN
SA
|
Consolidated Sustainability Statement
99
Table 18 - Like-for-like energy for managed assets
Energy reported in MWh
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
Elec-LfL
Electricity consumed for landlord shared services
51,638 MWh
50,707 MWh
30,731 MWh
28,225 MWh
1,652 MWh
327 MWh
2,987 MWh
2,421 MWh
16,268 MWh
19,734 MWh
Total landlord-obtained electricity consumed
51,638 MWh
50,707 MWh
30,731 MWh
28,225 MWh
1,652 MWh
327 MWh
2,987 MWh
2,421 MWh
16,268 MWh
19,734 MWh
Proportion of landlord-obtained electricity generated
offsite from renewable sources
63%
78%
52%
78%
62%
96%
73%
93%
88%
85%
Total landlord-obtained electricity generated and consu
-
med onsite from renewable sources
463 MWh
456 MWh
463 MWh
456 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
Total landlord-obtained electricity generated onsite from
renewable sources and exported
369 MWh
322 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
0 MWh
369 MWh
322 MWh
Total tenant-obtained electricity consumed
182,152 MWh
182,152 MWh
92,959 MWh
92,959 MWh
4,352 MWh
4,352 MWh
9,611 MWh
9,611 MWh
75,230 MWh
75,230 MWh
Total electricity consumed
233,791 MWh
232,859 MWh
123,691 MWh
121,184 MWh
6,004 MWh
4,679 MWh
12,598 MWh
12,032 MWh
91,498 MWh
94,964 MWh
Total electricity consumption data coverage, by area (sqm)
6,571,288 m
2
6,571,288 m
2
2,450,564 m
2
2,450,564 m
2
160,074 m
2
160,074 m
2
281,130 m
2
281,130 m
2
3,679,520 m
2
3,679,520 m
2
Proportion of landlord-obtained electricity consumption
and associated GHG emissions that is estimated
21%
44%
16%
47%
19%
13%
61%
12%
25%
46%
Proportion of tenant-obtained electricity consumption and
associated GHG emissions that is estimated
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion of total electricity consumption and associated
GHG emissions that is estimated
83%
88%
79%
88%
78%
94%
91%
82%
95%
95%
Fuels LfL
Fuels (natural gas) consumed for landlord shared services
55,314 MWh
54,795 MWh
18,358 MWh
17,464 MWh
200 MWh
177 MWh
1,749 MWh
1,549 MWh
35,008 MWh
35,606 MWh
Fuels (oil) consumed for landlord shared services
2,832 MWh
2,638 MWh
1,183 MWh
1,090 MWh
0 MWh
0 MWh
0 MWh
0 MWh
1,649 MWh
1,548 MWh
Fuels (natural gas) allocated for tenant consumption
194,724 MWh
197,135 MWh
55,073 MWh
52,392 MWh
6,462 MWh
5,710 MWh
17,381 MWh
19,771 MWh
115,807 MWh
119,260 MWh
Fuels (oil) allocated for tenant consumption
9,216 MWh
8,559 MWh
3,549 MWh
3,271 MWh
0 MWh
0 MWh
0 MWh
0 MWh
5,667 MWh
5,288 MWh
Total landlord shared services fuels consumed
58,146 MWh
57,433 MWh
19,541 MWh
18,555 MWh
200 MWh
177 MWh
1,749 MWh
1,549 MWh
36,657 MWh
37,153 MWh
Total (landlord-obtained) fuels allocated for tenant
consumption
203,940 MWh
205,694 MWh
58,622 MWh
55,664 MWh
6,462 MWh
5,710 MWh
17,381 MWh
19,771 MWh
121,474 MWh
124,549 MWh
Total (landlord-obtained) fuels consumed
262,086 MWh
263,127 MWh
78,163 MWh
74,218 MWh
6,662 MWh
5,887 MWh
19,130 MWh
21,320 MWh
158,131 MWh
161,702 MWh
Proportion of total (landlord-obtained) fuels from renew
-
able sources
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total (landlord-obtained) fuels consumption data coverage,
by area (sqm
2,860,327 m
2
2,860,327 m
2
1,107,070 m
2
1,107,070 m
2
88,141 m
2
88,141 m
2
222,389 m
2
222,389 m
2
1,442,727 m
2
1,442,727 m
2
Proportion of total (landlord-obtained) fuel consumption
and associated GHG emissions that is estimated
5%
10%
0%
0%
0%
9%
0%
0%
8%
15%
(*) Over the course of 2024, the Company together with its partner organisation switched several installed on-site PV system contracts to allow for on-site consumption. As this was an ongoing process, insufficient data was available to calculate the precise net amounts consumed on site, and
values were assumed to be fully consumed on site based on the type of contract.
AROUNDTOWN
SA
|
Consolidated Sustainability Statement
100
Table 18 - Like-for-like energy for managed assets
Energy reported in MWh
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
DH&C-LfL
Total district heating/cooling consumed for landlord
shared services
62,331 MWh
61,368 MWh
21,722 MWh
23,190 MWh
178 MWh
127 MWh
552 MWh
333 MWh
39,880 MWh
37,718 MWh
Total (landlord-obtained) district heating/cooling allocated
for tenant consumption
215,810 MWh
204,415 MWh
65,166 MWh
69,570 MWh
5,745 MWh
4,101 MWh
15,283 MWh
8,220 MWh
129,617 MWh
122,525 MWh
Total (landlord-obtained) district heating/cooling consumed
278,142 MWh
265,784 MWh
86,887 MWh
92,760 MWh
5,923 MWh
4,228 MWh
15,835 MWh
8,553 MWh
169,496 MWh
160,244 MWh
Proportion of total (landlord-obtained) district heating and
cooling from renewable sources
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Total (landlord-obtained) district heating/cooling con
-
sumption data coverage, by area (sqm)
3,460,239 m
2
3,460,239 m
2
1,463,964 m
2
1,463,964 m
2
54,442 m
2
54,442 m
2
77,708 m
2
77,708 m
2
1,864,125 m
2
1,864,125 m
2
Proportion of total (landlord-obtained) district heating/
cooling consumption and associated GHG emissions that is
estimated
7%
9%
6%
0%
0%
29%
0%
0%
9%
14%
Like-
for-Like
Energy
Total landlord shared services energy consumed
172,116 MWh
169,508 MWh
71,994 MWh
69,969 MWh
2,030 MWh
630 MWh
5,288 MWh
4,303 MWh
92,804 MWh
94,606 MWh
Total tenant-obtained/tenant-allocated energy consumed
605,520 MWh
595,781 MWh
216,747 MWh
218,193 MWh
16,559 MWh
14,163 MWh
42,275 MWh
37,602 MWh
329,939 MWh
325,823 MWh
Total landlord-obtained energy consumed
591,866 MWh
579,617 MWh
195,782 MWh
195,203 MWh
14,237 MWh
10,441 MWh
37,952 MWh
32,294 MWh
343,895 MWh
341,679 MWh
Total energy consumption
774,018 MWh
761,770 MWh
288,741 MWh
288,162 MWh
18,589 MWh
14,793 MWh
47,563 MWh
41,905 MWh
419,125 MWh
416,909 MWh
Total energy consumption data coverage, by area (sqm)
7,194,839 m
2
7,194,839 m
2
2,894,864 m
2
2,894,864 m
2
167,326 m
2
167,326 m
2
350,422 m
2
350,422 m
2
3,782,227 m
2
3,782,227 m
2
Proportion of landlord-obtained energy consumption and
associated GHG emissions that is estimated
7%
12%
5%
7%
2%
17%
5%
1%
9%
16%
Proportion of tenant-obtained energy consumption and
associated GHG emissions that is estimated
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Proportion of total energy consumption and associated
GHG emissions that is estimated
29%
33%
36%
37%
25%
42%
24%
24%
25%
31%
Proportion of total energy generated offsite from renewable
sources
5%
6%
8%
11%
7%
3%
6%
7%
3%
4%
Proportion of total energy generated onsite from renewable
sources (consumed onsite or exported)
0.11%
0.10%
0.16%
0.16%
0.00%
0.00%
0.00%
0.00%
0.09%
0.08%
Total renewable energy consumption and generation
29,834 MWh
37,817 MWh
16,538 MWh
22,429 MWh
1,027 MWh
313 MWh
2,180 MWh
2,255 MWh
10,089 MWh
12,820 MWh
Total energy consumption from fossil sources
744,185 MWh
723,953 MWh
272,203 MWh
265,733 MWh
17,562 MWh
14,480 MWh
45,383 MWh
39,650 MWh
409,036 MWh
404,089 MWh
Like-for-like building energy intensity (kWh/sqm*year)
Energy-Int
Landlord-obtained building energy intensity for energy
consumed
82.26 kWh/m
2
80.56 kWh/m
2
67.63 kWh/m
2
67.43 kWh/m
2
85.09 kWh/m
2
62.40 kWh/m
2
108.30 kWh/
m
2
92.16 kWh/m
2
90.92 kWh/m
2
90.34 kWh/m
2
Total building energy intensity for energy consumed
107.58 kWh/m
2
105.88 kWh/
m
2
99.74 kWh/m
2
99.54 kWh/m
2
111.09 kWh/
m
2
88.41 kWh/m
2
135.73 kWh/
m
2
119.58 kWh/
m
2
110.81 kWh/
m
2
110.23 kWh/
m
2
Mandatory Certificates (Energy Performance Certificates)
Cert-Tot
% of portfolio certified by floor area
95%
99%
94%
100%
100%
100%
94%
100%
95%
98%
AROUNDTOWN
SA
|
Consolidated Sustainability Statement
101
Regarding total energy consumption from nuclear sources and its proportion of total
energy consumption, the Group does not have sufficient information to determine this
at this time. Germany, our primary country of operation, has ceased the generation of
energy from nuclear sources in its own domestic grid. This does not mean, however, that
zero energy from nuclear sources is consumed in Germany because a share of Germany’s
electricity is imported from neighboring countries where nuclear energy generation is
still in place. This share of imported energy is not broken down by energy source
(*)
, and
thus inhibits the Group’s ability to accurately report the nuclear energy it consumes at
this time. While nuclear-produced energy may be included in electricity not covered
by renewable energy certificate (“REC”) or PPA contracts, the Group does not receive
detailed information about the energy mix on the invoices for these contracts, and thus,
these figures could not be reported.
Table 19
below presents the energy intensity per net revenue. Our business activities are
classified under NACE section L Renting and Operating of Own or Leased Real Estate and
are therefore classified as “high climate impact sector” activities, meaning all net revenue
falls under this sector and no reconciliation is needed.
Table 19 – Energy Intensities from Activities in High Climate Impact Sectors
(*)
Metric
2023
2024
Total Energy Consumption from Activities
in High Climate Impact Sectors
821,541 MWh
909,337 MWh
Total Net Revenue from activities in high
climate impact sectors
€ 1,192.8 million
€ 1,180.9 million
Energy Intensity from Activities in High
Climate Impact Sectors
688.8 MWh/ million €
770 MWh/ million €
(*) please refer to data available on
Energy-Charts
, specifically the “Import Balance” share for Germany’s public net electricity
generation in 2024, of which 5.7% was imported
(*) energy is only reported along the operational control scope as defined in the methodological notes in subsection E1-6,
meaning that there is a misalignment between the operational control and the financial consolidation scopes of the Company.
A recalculation of net revenue metrics was not possible at the time of reporting due to discrepancies between consolidated
financial data and the operational energy and emissions data. In the Company’s view this is not a material discrepancy, as
when considering the value of sustainability disclosures, monetary-based intensity metrics, while required by EU ESRS, are
inferior to physical-based intensity metrics with square meters as the denominator disclosed throughout this section. The
Company’s preference for physical-based intensities is in-line with guidance from sector-specific guidance by standard-
setting agencies CRREM and the Science-Based Targets Initiative (SBTi), specifically their
in-use operational SDA approach
E1-6 – Gross Scopes 1, 2, 3 and Total GHG Emissions
To ensure we prioritize improvement plans correctly and monitor their impact to further
inform our modelling, good data coverage and reliability is essential. We have a long-
term goal of achieving full data coverage across our portfolio. In 2024, the Group
attained 100% energy data coverage for our operational control portfolio in Germany,
the Netherlands, and the UK.
To maximize the utility of this data, we have initiated the development of a new database
for environmental data, enabling semi-automated data collection through a mobile app
for facility managers. Although Aroundtown does not directly control tenants’ energy
consumption, we strive to provide our tenants with consistent and relevant information
about their energy consumption through the gradual installation of sub-metering
systems and smart meters. We have also utilized informational videos and posters,
as well as provided information through our Service Center to encourage behavioral
changes among the tenants to reduce energy consumption. This approach empowers
our tenants by raising awareness and incentivizing them to reduce energy consumption.
In line with common practices in the real estate sector, Aroundtown’s consolidated
entities own certain properties which it does not directly manage. Lack of
management responsibilities present significant challenges in environmental data
collection, since AT is not responsible for energy procurement and data protection
barriers limit its ability to demand this information from tenants falling under
their direct contracts with utilities. As such, environmental reporting is limited to
the operational control consolidation approach defined by the GHG Protocol, in-line
with the sector specific environmental reporting standard the EPRA Sustainability
Best Practices Recommendations (“sBPR”). The Group is aware of the ongoing debate
surrounding the implementation of ESRS requirements regarding GHG organizational
boundaries as outlined in ESRS E1 Paragraphs 46 and 62 supported by paragraph AR
40, specifically that EFRAG is considering whether exceptions might be introduced for
industries through its sector-specific standards. In this regard, the Group would like
to note that the GHG Protocol went through extensive discussions on how to apply
the principles in a sector-specific manner as the standard was introduced almost
two decades ago. In light of this, AT considers sector-specific Guidance by the GHG
Protocol
(*)
to be a more mature standard developed through extensive consultation
and through this achieved alignment with financial accounting standards through its
(*)
Appendix F to the GHG Protocol Corporate Accounting and Reporting Standard – Revised Edition
AROUNDTOWN
SA
|
Consolidated Sustainability Statement
102
direct reference of FASB guidance on accounting practices regarding different lease
types. In light of these facts and EFRAG’s delayed rollout of sector-specific standards,
the Group has decided to continue applying its operational control boundary according
to sector-specific GHG protocol guidance , which the Group also anticipates EFRAG will
adopt in a similar fashion as this approach was more recently reiterated in technical
guidance jointly produced by standard-setting organizations GRESB, CRREM, and the
Partnership for Carbon Accounting Financials (“PCAF”)
(*)
.
Both the absolute location- and market-based GHG emissions intensities in Table
20 increased in 2024 compared to 2023, which similar to the energy intensities is
attributable to the newly reported buildings included in GHG emissions data coverage
for 2024 being more energy- and carbon-intensive. Observing the like-for-like data
presented in Table 21 covering the same set of assets reported in both years, both the
location-based and market-based GHG emissions intensities decreased.
(*)
Accounting and Reporting of GHG Emissions from Real Estate Operations, by PCAF CRREM and GRESB
Table 20 - Absolute GHG emissions for managed assets
GHG emissions reported in tons CO
2
e
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
GHG-
Dir-Abs
Direct GHG emissions (GHG Protocol Scope 1)
11,888 t CO
2
e
12,962 t CO
2
e
3,682 t CO
2
e
4,108 t CO
2
e
52 t CO
2
e
77 t CO
2
e
374 t CO
2
e
488 t CO
2
e
7,781 t CO
2
e
8,289 t CO
2
e
GHG-Indir-
Abs
Indirect GHG emissions (GHG Protocol Scope 2; Location-based)
38,662 t CO
2
e
40,273 t CO
2
e
17,773 t CO
2
e
19,205 t CO
2
e
671 t CO
2
e
223 t CO
2
e
1,288 t CO
2
e
1,623 t CO
2
e
18,930 t CO
2
e
19,222 t CO
2
e
Indirect GHG emissions (GHG Protocol Scope 2; Market-based)
20,087 t CO
2
e
24,996 t CO
2
e
8,632 t CO
2
e
8,167 t CO
2
e
279 t CO
2
e
48 t CO
2
e
485 t CO
2
e
317 t CO
2
e
10,691 t CO
2
e
16,463 t CO
2
e
Indirect GHG emissions (GHG Protocol Scope 3 from
tenant-controlled energy; Location-based)
184,136 t
CO
2
e
198,814 t
CO
2
e
65,106 t CO
2
e
74,570 t CO
2
e
5,164 t CO
2
e
6,246 t CO
2
e
12,123 t CO
2
e
14,742 t CO
2
e
101,744 t
CO
2
e
103,256 t
CO
2
e
Indirect GHG emissions (GHG Protocol Scope 3 from
tenant-controlled energy; Market-based)
161,675 t
CO
2
e
193,060 t
CO
2
e
58,210 t CO
2
e
65,687 t CO
2
e
5,039 t CO
2
e
6,038 t CO
2
e
11,919 t CO
2
e
12,722 t CO
2
e
86,508 t CO
2
e
108,613 t
CO
2
e
Absolute
GHG
Emissions
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3;
Location-based)
234,686 t
CO
2
e
252,049 t
CO
2
e
86,560 t CO
2
e
97,883 t CO
2
e
5,886 t CO
2
e
6,546 t CO
2
e
13,785 t CO
2
e
16,853 t CO
2
e
128,455 t
CO
2
e
130,767 t CO
2
e
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3;
Market-based)
193,650 t
CO
2
e
231,018 t
CO
2
e
70,524 t CO
2
e
77,962 t CO
2
e
5,370 t CO
2
e
6,164 t CO
2
e
12,778 t CO
2
e
13,527 t CO
2
e
104,979 t
CO
2
e
133,365 t
CO
2
e
Total GHG emissions data coverage, by area (sqm)
7,226,889 m
2
7,605,292 m
2
2,894,864 m
2
3,019,836 m
2
167,326 m
2
240,474 m
2
365,190 m
2
449,210 m
2
3,799,509 m
2
3,895,773 m
2
Absolut building GHG intensity (kg CO
2
e/sqm*year)
GHG-Int
Landlord-obtained building GHG emissions intensity (GHG
Protocol Scopes 1, 2 and 3; Location-based) (kg CO
2
e/sqm*year)
23.33 kg
CO
2
e/m
2
23.19 kg
CO
2
e/m
2
18.51 kg
CO
2
e/m
2
19.36 kg
CO
2
e/m
2
25.53 kg
CO
2
e/m
2
16.96 kg
CO
2
e/m
2
27.98 kg
CO
2
e/m
2
25.23 kg
CO
2
e/m
2
26.46 kg
CO
2
e/m
2
26.32 kg
CO
2
e/m
2
Total building GHG emissions intensity (GHG Protocol
Scopes 1, 2 and 3; Location-based) (kgCO
2
e/sqm*year)
32.47 kg
CO
2
e/m
2
33.14 kg
CO
2
e/m
2
29.90 kg
CO
2
e/m
2
32.41 kg
CO
2
e/m
2
35.18 kg
CO
2
e/m
2
27.22 kg
CO
2
e/m
2
37.75 kg
CO
2
e/m
2
37.52 kg
CO
2
e/m
2
33.81 kg
CO
2
e/m
2
33.57 kg
CO
2
e/m
2
Landlord-obtained building GHG emissions intensity (GHG
Protocol Scopes 1, 2 and 3; Market-based) (kgCO
2
e/sqm*year)
17.65 kg
CO
2
e/m
2
20.43 kg
CO
2
e/m
2
12.97 kg
CO
2
e/m
2
12.76 kg
CO
2
e/m
2
22.44 kg
CO
2
e/m
2
15.37 kg
CO
2
e/m
2
25.23 kg
CO
2
e/m
2
17.83 kg
CO
2
e/m
2
20.28 kg
CO
2
e/m
2
26.98 kg
CO
2
e/m
2
Total building GHG emissions intensity (GHG Protocol
Scopes 1, 2 and 3; Market-based) (kgCO
2
e/sqm*year)
26.80 kg
CO
2
e/m
2
30.38 kg
CO
2
e/m
2
24.36 kg
CO
2
e/m
2
25.82 kg
CO
2
e/m
2
32.09 kg
CO
2
e/m
2
25.63 kg
CO
2
e/m
2
34.99 kg
CO
2
e/m
2
30.11 kg
CO
2
e/m
2
27.63 kg
CO
2
e/m
2
34.23 kg
CO
2
e/m
2
AROUNDTOWN
SA
|
Consolidated Sustainability Statement
103
Table 21 - Like-for-like GHG emissions for managed assets
GHG emissions reported in tons CO
2
e
Total
Office
Retail
Others Incl. Logistics
GCP
EPRA Code
Metric
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
GHG-
Dir-LfL
Direct GHG emissions (GHG Protocol Scope 1)
10,822 t CO
2
e
10,679 t CO
2
e
3,652 t CO
2
e
3,465 t CO
2
e
37 t CO
2
e
32 t CO
2
e
320 t CO
2
e
283 t CO
2
e
6,814 t CO
2
e
6,898 t CO
2
e
GHG-
Indir-LfL
Indirect GHG emissions (GHG Protocol Scope 2; Location-based)
37,271 t CO
2
e
34,961 t CO
2
e
17,659 t CO
2
e
16,355 t CO
2
e
671 t CO
2
e
155 t CO
2
e
1,288 t CO
2
e
963 t CO
2
e
17,654 t CO
2
e
17,487 t CO
2
e
Indirect GHG emissions (GHG Protocol Scope 2; Market-based)
18,993 t CO
2
e
17,682 t CO
2
e
8,569 t CO
2
e
6,624 t CO
2
e
279 t CO
2
e
38 t CO
2
e
485 t CO
2
e
145 t CO
2
e
9,660 t CO
2
e
10,875 t CO
2
e
Indirect GHG emissions (GHG Protocol Scope 3; from
tenant-controlled energy, Location-based)
175,021 t
CO
2
e
165,501 t
CO
2
e
64,673 t CO
2
e
62,858 t CO
2
e
4,664 t CO
2
e
3,865 t CO
2
e
11,713 t CO
2
e
9,586 t CO
2
e
93,970 t CO
2
e
89,192 t CO
2
e
Indirect GHG emissions (GHG Protocol Scope 3 from
tenant-controlled energy; Market-based)
153,558 t
CO
2
e
150,154 t
CO
2
e
57,931 t CO
2
e
54,904 t CO
2
e
4,539 t CO
2
e
3,657 t CO
2
e
11,509 t CO
2
e
8,916 t CO
2
e
79,579 t CO
2
e
82,676 t CO
2
e
Like-for-
Like GHG
Emissions
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3;
Location-based)
223,114 t
CO
2
e
211,141 t
CO
2
e
85,983 t CO
2
e
82,678 t CO
2
e
5,372 t CO
2
e
4,053 t CO
2
e
13,321 t CO
2
e
10,833 t CO
2
e
118,438 t
CO
2
e
113,577 t CO
2
e
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3;
Market-based)
183,374 t
CO
2
e
178,515 t
CO
2
e
70,152 t CO
2
e
64,994 t CO
2
e
4,855 t CO
2
e
3,727 t CO
2
e
12,314 t CO
2
e
9,344 t CO
2
e
96,053 t CO
2
e
100,449 t
CO
2
e
Total GHG emissions data coverage, by area (sqm)
7,194,839 m
2
7,194,839 m
2
2,894,864 m
2
2,894,864 m
2
167,326 m
2
167,326 m
2
350,422 m
2
350,422 m
2
3,782,227 m
2
3,782,227 m
2
Like-for-like building GHG intensity (kgCO
2
e/sqm*year)
GHG-Int
Landlord-obtained building GHG emissions intensity (GHG
Protocol Scopes 1, 2 and 3; Location-based) (kgCO
2
e/sqm*year)
21.83 kg
CO
2
e/m
2
20.59 kg
CO
2
e/m
2
18.31 kg
CO
2
e/m
2
17.74 kg
CO
2
e/m
2
22.45 kg
CO
2
e/m
2
14.99 kg
CO
2
e/m
2
27.84 kg
CO
2
e/m
2
21.18 kg
CO
2
e/m
2
23.94 kg
CO
2
e/m
2
22.97 kg
CO
2
e/m
2
Total building GHG emissions intensity (GHG Protocol
Scopes 1, 2 and 3; Location-based) (kgCO
2
e/sqm*year)
31.01 kg
CO
2
e/m
2
29.35 kg
CO
2
e/m
2
29.70 kg
CO
2
e/m
2
28.56 kg
CO
2
e/m
2
32.10 kg
CO
2
e/m
2
24.22 kg
CO
2
e/m
2
38.01 kg
CO
2
e/m
2
30.91 kg
CO
2
e/m
2
31.31 kg
CO
2
e/m
2
30.03 kg
CO
2
e/m
2
Landlord-obtained building GHG emissions intensity (GHG
Protocol Scopes 1, 2 and 3; Market-based) (kgCO
2
e/sqm*year)
16.30 kg
CO
2
e/m
2
16.06 kg
CO
2
e/m
2
12.84 kg
CO
2
e/m
2
11.64 kg
CO
2
e/m
2
19.36 kg
CO
2
e/m
2
13.04 kg
CO
2
e/m
2
24.96 kg
CO
2
e/m
2
16.93 kg
CO
2
e/m
2
18.02 kg
CO
2
e/m
2
19.50 kg
CO
2
e/m
2
Total building GHG emissions intensity (GHG Protocol
Scopes 1, 2 and 3; Market-based) (kgCO
2
e/sqm*year)
25.49 kg
CO
2
e/m
2
24.81 kg
CO
2
e/m
2
24.23 kg
CO
2
e/m
2
22.45 kg
CO
2
e/m
2
29.01 kg
CO
2
e/m
2
22.28 kg
CO
2
e/m
2
35.14 kg
CO
2
e/m
2
26.67 kg
CO
2
e/m
2
25.40 kg
CO
2
e/m
2
26.56 kg
CO
2
e/m
2
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Consolidated Sustainability Statement
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Table 22 below pres
ents the GHG emissions intensity per net revenue. Our business
activities are classified under NACE section L Renting and Operating of Own or Leased
Real Estate and are therefore classified as “high climate impact sector” activities,
meaning all net revenue falls under this sector and no other intensity figures or
reconciliation is needed.
(*) Emissions are only be reported along the operational control scope as defined in the methodological notes in this subsection,
meaning that there is a misalignment between the operational control and the financial consolidation scopes of the Group. A
recalculation of alternate net revenue metrics was not possible at the time of reporting due to discrepancies between consolidated
financial data and the operational energy and emissions data. In the Group’s view this is not a material discrepancy, as when
considering the value of sustainability disclosures, monetary-based intensity metrics, while required by EU ESRS, are inferior to
physical-based intensity metrics with square meters as the denominator disclosed throughout this section. The Group’s preference
for physical-based intensities is in-line with guidance from sector-specific guidance by standard-setting agencies CRREM and the
Science-Based Targets Initiative (SBTi), specifically their
in-use operational SDA approach
Methodology and EPRA sBPR Data Preparation Notes
When calculating our GHG emission reduction targets and achieved savings, we align
with the GHG Protocol, adapted to the real estate sector through the 4th edition of
the European Public Real Estate Association (“EPRA”) Sustainability Best Practice
Recommendations (“sBPR”) published in 2024 which notably aligned the standard to
the EU ESRS requirements. The notes below apply to Tables 20 and 21 in this section
and Tables 17 and 18 in section E1-5.
In 2024, Aroundtown received the EPRA sBPR Gold award for our disclosure for the
seventh time consecutively.
Organizational Boundaries
The information and data in this report covers the operations of Aroundtown SA,
spanning our direct employees and commercial portfolio. As of 31 December 2024, our
Group portfolio (including Grand City Properties S.A.) held €24.3 billion of investment
property comprising offices (38%); residential (34%); hotels (22%); logistics/other and
retail (6%).
Information on our residential portfolio, which is owned by Grand City Properties
S.A. (“GCP”) in which we hold a 62% stake has been consolidated and the data is
included in the scope of this report. However, GCP’s performance is also reported
separately, and this information is published on the sustainability section of Grand
City Properties’ website.
Landlord and Tenant Boundaries, Allocation by Scopes, Scope 3 Categories
We have followed the methodology followed in last year’s report for allocating energy
consumption between landlord-controlled areas and tenant-controlled areas. GHG
emissions associated with the energy sources outlined in Tables 17 and 18 in section
E1-5 are categorized into three distinct scopes as defined by the GHG Protocol:
y
Scope 1
GHG emissions are generated directly from the use of energy sources
within the building, such as natural gas and other fuels and GHG emissions from the
operation of boilers and furnaces
(*)
.
y
Scope 2
covers indirect GHG emissions from purchased energy, including electricity,
steam, district heating and cooling.
y
Scope 3 e
ncompasses all indirect GHG emissions generated in the value chain of the
Group that are not covered by Scope 2.
(*)
scope 1 GHG emissions from real estate do not currently fall under regulates emissions trading schemes
Table 22 – GHG Emissions Intensities per Net Revenue
(*)
Metric
2023
2024
Total Location-Based GHG Emissions
from Activities in High Climate Impact
Sectors
234,686 t CO
2
252,049 t CO
2
Total Market-Based GHG Emissions from
Activities in High Climate Impact Sectors
193,650 t CO
2
231,018 t CO
2
Total Net Revenue (in € millions)
€ 1,192.8 million
€ 1,180.9 million
Location-Based GHG Emissions Intensity
per net revenue
196.8 t CO
2
/ million €
213.4 t CO
2
/ million €
Market-Based GHG Emissions Intensity
per net revenue
162.3 t CO
2
/ million €
195.6 t CO
2
/ million €
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Consolidated Sustainability Statement
105
In our 2019 baseline and annual GHG emissions reporting, we use a common area/total
area ratio to estimate the GFA from the available NLA determined through our letting
contracts, allowing us to apportion shared-service heating consumption between
landlord and tenant spaces. The allocation is based on the floor area distribution
found with the property types classification appendix (3a) of the
GRESB Real Estate
Assessment Reference Guide
.
This calculation of landlord- and tenant-controlled areas is used to allocate landlord-
obtained heating energy between Scopes 1 or 2 and Scope 3 Category 13 (Downstream
Leased Assets). Additionally, GHG emissions from tenant-obtained electricity, which is
estimated due to data protection barriers, is allocated directly to Scope 3 Category 13.
Scope 3 Category 13 is the sole relevant Scope 3 category reported here, following
the EPRA sBPR standard, which only covers the operational GHG emissions of the
portfolio. Relevance is based on the Group business model, involving a relatively small
share of targeted construction activities compared to other companies in the sector,
instead focusing on acquisition and management of existing properties.
While precise allocation of CO
2
emissions between Scope 1 or 2 and Scope 3 Category
13 would involve complete measured data from the metering and sub-metering
arrangements in place between tenants and landlords, the majority of our utilities use
outdated, paper-based billing systems with inconsistent invoice formats, which are
often received too late to meet current-year reporting deadlines. Additionally, real-time
monitoring is hindered by the slow implementation of smart meters by grid operators,
who prioritize energy-intensive users (i.e. manufacturing) over less intensive sectors. As
a result, the total energy consumption for the building is attributed to landlord or tenant
control based on the ratio of shared spaces to tenant areas expected for the property as
provided by GRESB. Correspondingly, GHG emissions from this energy consumption are
allocated accordingly in the same proportion, with common areas falling under Scopes
1 and 2 and tenant areas falling under Scope 3 Category 13, following the operational
control consolidation approach of the GHG protocol. Therefore, the energy consumption
and the corresponding CO
2
emissions represents the entire building area i.e., of both
landlord and tenant-controlled area.
Coverage
Absolute and like-for-like portfolio environmental data relates to the assets in the
operational control portfolio in Germany, the Netherlands, and London which is
a subset of the Organizational Boundaries discussed above, defined as assets the
Group directly manages building operations with responsibility for operational
decisions, mainly the choice of energy provider. The like-for-like subset contains all
the properties for which we received environmental reporting data for the full two-
year period from January 1st , 2023 to December 31st , 2024. Actual environmental
performance data is only reported on assets for which we have operational control
and for which we can collect utilities data. On an absolute basis, this included
100%
of the total operational control portfolio covering a gross floor area of 7,605K m²
(excluding assets held for sale and properties under development) at the end of
December 31st, 2024. A breakdown of the reported portfolio gross floor area based
on asset types are as follows: office – 3,020K m²
, retail –
240K m²
, others including
logistics –
449K m², with the remaining area being GCP’s residential portfolio.
Further information relating to maximum coverage on an absolute and like-for-like
basis per utility type is provided within our data tables.
Data relating to our employees covers all direct employees employed by Aroundtown,
including part-time and temporary workers, as well as our international employees
(*)
.
Reporting Period
All data relates to our financial year, which coincides with the calendar year, and
consequently runs from January 1st to December 31st of the year under review.
Estimation of Utility Consumption
The list below outlines all applicable estimation methods involved in the preparation of
energy and emissions data presented in Tables 17 and 18 in section E1-5 and Tables 20
and 21 in section E1-6, respectively. As outlined in the Landlord and tenant boundaries,
allocation by scopes, scope 3 categories portion of these notes above, Scope 3 emissions
are allocated to category 13 according to the share of landlord- and tenant-controlled
areas of reported properties. Thus, the Proportion of total energy consumption and
associated GHG emissions that is estimated figures in Tables 17 and 18 in section E1-5
are applicable to Scope 3 emissions presented in Tables 20 and 21, respectively, while
the share of primary data can be derived through obtaining the difference between this
figure and 100 percent.
1.
Measured data for the reporting year were not fully available in time for publication.
In instances where the available heating data is not representative, estimations
were calculated based on known consumption from other periods, following the
ratio-based heating-degree-days normalization method. In the case of electricity,
(*) This topic relates to data covered in the S1 section, but is presented here in order to maintain an alignment with the EPRA
sBPR Guidelines
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Consolidated Sustainability Statement
106
the consumption was extrapolated based on the weighted arithmetic mean of
other known periods. In some instances, this was not possible for heating. Here we
calculated an estimation by extrapolating expected heating consumption according
to the EPC rating of the building and weather normalization was not performed
as the estimation process involves historical climate factor data published by the
DWD. There is a lag between the last date of each month and the publication of
climate factor data of approximately 2 months. Due to reporting timelines, the
most recent full year of published climate factors available at the time are used
to represent the current reporting year, which in this report is November 2023 to
November 2024 for the year 2024.
2.
In some cases, assets do not have Energy Performance Certificates (“EPCs”) due to
expired EPC and limited capacity on the market, which slows the process of issuing
new EPCs. EPC-estimated calculations are conducted for residential assets using
average energy intensity values based on EPCs of properties in the same building
cluster or a weighted average based on the construction year,
thus the consumption
is considered estimated. This is currently not done for commercial assets due to lower
sample size for each building cluster which prevents reliable estimations.
3.
For tenant-obtained electricity, the consumption for tenant-controlled areas
is estimated based on industry standard energy benchmarks, namely the
Association of German Engineers
Verein Deutscher Ingenieure
VDI-Richtlinien
3807 for residential and the German Federal Institute for Research on Building,
Urban Affairs and Spatial Development
Bundesinstitut für Bau-, Stadt- und
Raumforschung
(BBSR) for commercial assets, as well as benchmarks specific to
the Group portfolio based on EPC ratings for the properties when available.
We have reported the percentage of estimation that this represents per utility type in
Tables 17 and 18 in section E1-5.
Furthermore, we have disclosed the proportion of overall consumption that our
estimation of tenant consumption represents, according to our methodology described
in the section ‘Landlord and Tenant Boundaries’.
Regarding only landlord-obtained utility consumption, as per the EPRA sBPR
requirements, we have detailed the extent of estimations below:
y
Electricity:
54%
of landlord-obtained consumption is based on available data, with
46% estimated.
y
Heating:
91
% of landlord-obtained consumption is based on available data, with the
remaining 9% estimated.
Units of Measurement and Normalization
Utilities data are reported based on absolute consumption measured in MWh (energy),
tCO
2
e (GHG emissions). GHG emissions are reported using location-based conversion
factors published by the German Environmental Protection Association as well as
market-based factors when available. Where consumption is normalized, we calculate
intensity indicators using floor area (m
2
) for whole buildings, including tenant areas.
Since we are now estimating the tenant consumption, we believe that our numerator
and denominator provide a representative intensity figure.
Segmental Analysis (By Property Type, Geography)
Segmental analysis by geography is not relevant for our portfolio. Our assets are
primarily located within Germany, the Netherlands and London, and therefore in
the same climatic zone. Segmental analysis is instead provided by asset type and is
consistent with our financial reporting.
Disclosure on Own Offices
Our own occupied office consumption is excluded from our portfolio data as we are
a tenant in the building.
Restatements of Information
y
Due to further enhancements made on operational data, some properties included
in last year’s reported energy consumption and GHG emissions figures have been
identified as being managed by the tenants. As a result, energy consumption data
of assets has not been changed, but the reported consumption and associated GHG
emissions totals for each portfolio segment for the year 2023 have decreased due to
a decrease in assets included to more precisely align with the Group’s definition of
the operational control scope.
y
In order to align with industry best practices, square meter measurements used to
normalize physical energy- and GHG emission intensities have been converted from
NLA to GFA using asset-type-specific benchmarks by GRESB described above.
y
In its estimations of tenant-obtained electricity, Aroundtown has adopted new
benchmarks deemed more relevant to the portfolio: AT switched from using the
CIBSE benchmarks to those provided by VDI for residential assets and BBSR as well
as intensities provided in EPCs of own properties for commercial, depending on
available information. Benchmarks are described in more detail above.
y
Figures relating to the proportion of total energy generated offsite from renewable/
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Consolidated Sustainability Statement
107
green sources have been restated for 2023 as AT is phasing out its procurement of
carbon-neutralized gas. The reasoning for this is that gas combustion cannot be
claimed as renewable and is in practice an offset, and the Group would thus prefer
to focus its sustainability strategy on increasing the share of renewable energy and
reducing GHG emissions in its own operations.
Narrative on Performance
Explanation and analysis of our performance in relation to the Performance Measures
reported on are found with the respective data tables throughout this report.
GHG Emission Factors
In 2024, GHG emission factors were used from a new source and therefore updated
and incorporated for 2023 & 2024 data in this report. Location-based GHG emission
factors are mostly retrieved from the CRREM dataset (see Table below) and applied
to calculate heating and electricity GHG emissions based on consumption data.
Market-based GHG emissions are calculated using GHG emission factors provided by
suppliers. For heating, these GHG emission factors apply to both landlord and tenant
GHG emissions. For electricity, only the landlord’s GHG emissions can be calculated
based on existing contracts, while the tenant’s GHG emissions values are taken from
the country’s electricity mix (location-based,
CRREM
)
(*)
. The GHG emission factors in
the CRREM tool for district heating, however, are not country-specific but instead apply
one factor for all countries. In order to achieve more location-specific GHG emission
factors, an external consultancy was requested to provide reasonable adaptations of
the CRREM district-heating factor in order to make it more relevant for each country
involved in the environmental reporting.
(*) version v.2.05, back-end tab of the CREEM tool
Table 23 – Location-based GHG emission factors 2023/2024
Location
Energy type
Data source
CO
2
e Factor 2023
[gCO
2
e/kWh]
CO
2
e Factor 2024
[gCO
2
e/kWh]
DE
Electricity
CRREM
371
355
NL
Electricity
268
239
UK
Electricity
176
158
DE
Natural Gas
183
183
NL
Natural Gas
183
183
UK
Natural Gas
183
183
DE
District Heating
Advisory
by external
consultancy,
following CRREM
methods
325
311
NL
District Heating
235
210
UK
District Heating
154
138
DE
Oil
CRREM
247
247
NL
Oil
247
247
UK
Oil
247
247
GHG Emission Data Reporting Basis
GHG emissions data per asset is reported using two methods: location-based and
market-based.
Location-based:
GHG emissions data is collected on a country-by-country basis and
calculated accordingly with consumption values per utility. Starting in 2024, CRREM
GHG emission factors were adopted. These factors are consistent with the Paris
Agreement’s goal of limiting global warming to 1.5°C or 2°C. This provides real estate
investors, developers, and managers with a science-based framework for reducing
carbon emissions in line with global climate commitments. The use of these GHG
emission factors ensures that real estate assets follow a decarbonization path that is
consistent with broader climate targets. The 2023 location-based GHG emissions data
will also be recalculated using the CRREM-factors for comparability.
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Consolidated Sustainability Statement
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Market-based:
The GHG emissions factor is defined through one of three methods:
1.
Factors are taken from previously issued invoices (district heating and electricity);
2.
Factors are taken from suppliers’ GHG emission certificates (district heating); or,
3.
Factors are taken from publicly available suppliers’ statements (district heating).
GHG Emissions data is supplier dependent. If no information on the GHG emission factors
of the respective supplier is available via the invoices, certificates, or publicly available
information, then the country mix is considered (location-based). Scope 1 GHG emissions
(natural gas and oil) are single energy source commodities that are highly similar between
utility providers and are therefore always considered location-based under the GHG Protocol.
Contractual Instruments for Renewable Energy
Aroundtown works with its utility providers in order to increase the share of renewable
energy procured using contractual instruments available in the energy markets where
it operates. The primary contractual instruments are EU Guarantees of Origin (“GOs”),
which are renewable electricity certificates purchased to cover consumed electricity
that are unbundled with the physical electricity. Additionally, the Group engages in
Corporate Power Purchase Agreements (“CPPAs”, or “PPAs”) which are bilateral contracts
purchasing renewable energy directly from renewable energy producers at a pre-agreed
price and quantity, which are thus bundled with the physical electricity produced. As
noted in the Renewable electricity procurement portion of section E1-4, electricity from
bundled contracts is only being procured from 2025 on, meaning the figures reported
in Proportion of landlord-obtained electricity generated offsite from renewable sources
figures from Tables 17 and 18 in section E1-5 are based on unbundled contractual
instruments. This proportion is applicable to Scope 2 and associated Scope 3 category
13 GHG emissions stemming from landlord-obtained electricity.
E1-7 – GHG Removals and GHG Mitigation Project Financed Through
Carbon Credits
Aroundtown does not engage in GHG Removals and Storage projects in its value
chain, instead we focus on reducing our operational GHG emissions from our own
business activities. We are currently not investing in carbon removal projects and do
not purchase carbon credits from external partners.
E1-8 – Internal Carbon Pricing
Aroundtown uses a carbon pricing that is a CapEx shadow price that reflects the
hypothetical cost of its CO₂e. It is not necessarily tied to actual market prices but is
used as a decision-making tool to account for the environmental and social impacts
of carbon emissions in economic terms.
We have applied an internal carbon price as a shadow carbon price so we can
identify the additional benefits of our actions towards energy consumption and GHG
emissions reductions over the use life of implemented measures. We have used the
German pricing based on the Fuel Emissions Trading Act
(*)
as opposed to the wider
market pricing. This pricing was €30/ton CO₂ through 2023, is set at €45/ton CO₂ for
2024, and will increase incrementally to a price corridor of €55-65/ton CO₂ by 2026.
From 2027 onward, it will transition to a market-based system for which the rules
are yet to be determined, for which the Group assumes a price cap of €125/ton CO₂.
Instead of taking the recommended price of €55-65/ton CO₂, For 2025 through 2026,
AT has already been considering a higher price of €90/ton CO₂ and will increase the
price to €120/ton CO₂ from 2025. In the Group’s view, this is practically applying an
assumption of a moderate transition scenario. Hence, when calculating the returns
of investments of refurbishment projects in particular, the increasing price of CO₂ is
already factored in and considered in decision-making processes of refurbishment
measures.
Since the regulatory framework discussed in this section regards heating-related GHG
emissions generated in operations of the German operational control portfolio, also
including downstream tenant-controlled areas, the GHG emissions covered by this scheme
for the year 2024 are presented in the table below. These figures are taken directly from
the data underlying Table 20 (Absolute GHG emissions) in section E1-6 above, following
the same organizational boundaries. It is important to note that not all these GHG
emissions stated below are taxed under the German scheme described above. While in
commercial properties landlords and tenants split the tax equally, in GCP’s residential
portfolio there are provisions outlining the share of the tax to be paid by the landlord and
tenant based on the energy rating of the property.
(*)
Brennstoffemissionshandelgesetz (BEHG)
Table 24 – GHG Emission Volumes Covered by the Internal Carbon Pricing Scheme
GHG Category
Amount of tCO
2
e
Scope 1
12,255
Scope 2
21,352
Scope 3
119,184
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Consolidated Sustainability Statement
109
Introduction
At Aroundtown, we are committed to protecting the environment, ensuring the health
and safety of our employees, and fostering the wellbeing of the community in which the
Group operates. While these areas encompass a range of considerations, it is important
to distinguish those most relevant to a real estate group such as AT. When it comes
to environmental protection, pollution is a key focus area, which can be considered
in relation to soil, water and air. During the DMA process, it became clear that the
distinction was also important to our stakeholders, who did not perceive the impact on
soil or water as significant, however, they saw air pollution as a material topic.
The main contributor to local and regional air pollution associated with AT’s operation
is the combustion of fossil fuel for heat and power generation consumed at our assets.
Although AT cannot directly control fossil fuel powered energy generation or any
resulting pollution, the Group takes measures to increase renewable energy usage
and focuses on the reduction of CO₂e emissions, as refer in section E1-3 and E1-4 in
the report. This is achieved by improving the energy efficiency of its assets, gradually
replacing traditional heating systems with low emission alternatives over the coming
decades and installing on-site renewable energy generation.
It should be noted that the measurement of air pollutants linked to power generation
is challenging and entirely based on external data, as for now the Group has no direct
insight into its energy and electricity providers. Instead, AT discloses CO₂e emissions
in section E1-6 in the report as a reference value, as combustion linked air pollutants
such as Nitrogen oxides (Nox), Sulphur oxides (Sox) and Particulate Matter (PMs)1
typically increase or decrease proportionately with changes in CO₂e emissions.
Whilst we are currently unable to precisely quantify emissions from our own and our
providers heating and electricity systems, the Group strives to further enhance its
understanding of their contribution to air pollution. In tandem with these efforts, our
policies and actions surrounding air pollution ensure that AT actively contributes to a
responsible and sustainable future.
IROs or datapoints that were identified as immaterial to Aroundtown are not covered
in this report. In some cases, AT makes use of the phase-in provisions (in accordance
with Appendix C of ESRS 1) and is committed to disclosing these datapoints in the
coming years.
ESRS E2 Pollution
High-level overview of disclosure
Standard
Indicator
ESRS E2 Pollution
E2. IRO-1 – Description of the processes to identify and assess
material pollution-related impacts, risks and opportunities
E2-1 – Policies related to pollution
E2-2 – Actions and resources related to pollution
E2-3 – Targets related to pollution
E2-4 – Pollution of air, water and soil
Table 25
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Air
Pollution
Impact
Negative
impact
Own operations
and value chain
(downstream)
Long-term
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E2. IRO-1 Description of the Processes to Identify and Assess Material
Pollution-Related Impacts, Risks and Opportunities
Within AT’s overarching goal of environmental protection, the Group considers
potential pollution impacts from its operations. The DMA reaffirmed that air pollution
is AT’s most significant impact in this area. This impact primarily results from the
electricity and heat consumption in our buildings, as our tenants’ energy needs are not
yet fully met by renewable and emission-free sources. The combustion of gas, oil and
coal for the purpose of heating and powering our assets, along with the use of district
heating and electricity from non-renewable sources, contributes to air pollution.
Aroundtown has implemented a structured process to identify and assess material
pollution-related impacts, risks and opportunities through multi-stakeholder
consultations conducted in July 2024 as part of the DMA.
While AT conducted extensive internal stakeholder engagement, direct consultation
with affected local communities was not part of this assessment process. The Group
primarily relied on operation department knowledge of local impacts and compliance
with local regulations to assess community effects. Future materiality assessments
may benefit from expanded direct community engagement regarding pollution
impacts. Please refer to ESRS 2 IRO-1 and ESRS 2 SBM-3 of this report for more
details.
Materiality Assessment Results: Pollution Impact
The assessment process evaluated both positive and negative impacts of pollution-
related activities, with stakeholders rating impacts on a scale of 1-5. Air pollution
from fossil fuel-based heating and energy consumption was identified as having
material negative impacts, scoring above the materiality threshold of 2.5.
Air pollution related to fossil-fuel combustion is not linked to a specific site location
in AT’s operations but to energy power stations across Europe where the Group
operates. Air pollution is often generated locally but can disperse over long distances
through air circulation and wind patterns, crossing borders and impacting air quality
on a regional and, in some cases, global scale.
AT does not engage in direct business activities that cause air pollution. As described
above, air pollution is linked to the energy and heating generation by power stations
that is consumed by tenants of the Group. Therefore, it is AT’s goal to reduce fossil fuel
energy and expand the share of renewable energy within its energy consumption.
E2-1 Policies to Manage its Material Impacts, Risks and Opportunities
Related to Pollution
AT’s Environmental and Energy Policy, which was updated in 2024, seeks continual
improvement throughout its business operations to lessen the impact on the local and
global environment by conserving energy, water and other natural resources, reducing
pollution and waste generation, increasing the share of waste that is recycled, and
avoiding the use of toxic materials. The policy covers key objectives on energy that
also relate to air pollution:
y
Metering and monitoring systems
y
High-energy efficiency systems
y
Renewable energy systems
y
Energy storage systems
y
Electric vehicle chargers wherever feasible
Aroundtown uses renewable energy sources wherever possible for heating and
electricity and is progressively changing its entire portfolio to renewable energy
contracts for electricity and district heating systems. AT is also pursuing the
replacement of all fuel oil heating systems and aims to increase the adoption of
decentralised renewable and high-efficiency energy systems, as well as transition to
district heating.
Each of the energy objectives within Aroundtown’s Environmental and Energy Policy
address the material air pollution impacts that AT has. These objectives ensure that
the Group moves towards renewable and emission free energy, that will, in turn,
reduce the amount and impact of air pollution produced. The expansion of metering
and monitoring systems will enable the capture, tracking, monitoring and analysis of
emissions contributing to air pollution, ensuring that progress is being made towards
reducing these impacts.
Table 26
Policy Title
Short Description
Environmental
and Energy Policy
AT’s policy seeks continual improvement throughout its business
operations to lessen the impact on the local and global environment by
conserving energy, water and other natural resources, reducing pollution
and waste generation, increasing the share of waste that is recycled,
and reducing the use of toxic materials.
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Scope and Accountability for Implementation
The scope of topics covered by Aroundtown’s Environmental and Energy Policy includes
energy, water and waste. In terms of its reach, the policy applies globally to the Group, its
subsidiaries and affiliated companies.The policy was developed to reflect AT’s commitment to
environmental stewardship and is therefore applicable to all of AT’s companies, departments
and properties, as well to new developments, major renovations, and modernisations.
Beyond this, tenant and business partner engagement will be pursued to raise awareness of
energy efficiency initiatives related to tenant consumption and business partner operations,
as well as to ensure that systems in place operate at the highest efficiency.
The policy does not involve third-party standards or initiatives in its implementation,
as it primarily focuses on improving environmental impacts through implementing
decarbonisation levers mentioned in section E1-1 in the report, which can have co-benefits
such as reducing certain types of air pollution. AT is following guidance of the GHG protocol
and the Carbon Risk Real Estate Monitor (CRREM) pathway in its strategy to reduce carbon
emissions as outlined in detail in section E1-6 in the report. These frameworks play a key role
in supporting AT’s Environmental and Energy Policy by guiding the reduction of greenhouse
emissions, which can have co-benefits such as reducing certain types of air pollution.
Through these standards, AT ensures a structured approach to monitoring, managing, and
mitigating GHG emissions generated by its asset portfolio, delineating responsibilities at
the asset and Group-level between operations and Management Body.
At the most senior level, the Management Body, the Head of Energy Department with
support of the Chief Sustainability Officer are responsible for implementation of the
Environmental and Energy Policy.
Environmental and Energy Policy: Reducing Pollution and Negative Impacts
AT’s Environmental and Energy Policy aims to mitigate the negative impacts of air
pollution by:
y
Reducing reliance on fossil fuels by increasing renewable energy sources and contracts
y
ncreasing energy efficiency systems and initiatives
y
Tenant engagement to raise awareness of energy efficiency initiatives and the
impact of operations
These actions will lead to a reduction of air pollution associated with the combustion
of fossil fuels for power generation, as fewer pollutants will be emitted, thereby
minimizing the negative impacts of air pollution.
As AT considers only air pollution as material, the Environmental and Energy Policy
briefly mentions water, waste and soil pollution.
E2-2 Actions and Resources in Relation to Pollution
Our actions, planned steps, and current and future financial resources addressing air
pollution are aligned with the Climate Transition Plan outlined in section E1-1, along
with the key actions related to GHG emissions outlines in section E1-3 of this report.
As with the actions taken as part of our Climate Transition Plan, AT efforts regarding
air pollution reduction span across its value chain, engaging with both upstream
suppliers and downstream tenants to minimize GHG emissions and improve air quality.
E2-3 Targets related to Pollution
AT has not established a specific target for air pollution prevention and control at this
stage. The Group’s primary environmental focus is on reducing fossil fuel consumption and
GHG emissions, as outlined. Given that air pollution from combustion sources generally
correlates with GHG levels, AT refers to its CO₂e emissions reduction targets under section
E1-4, specifically the GHG emissions reduction target and accompanying methodological
notes sections, of this report, also contributing to air pollution reduction efforts.
Currently, AT does not track air pollutants such as nitrogen oxides (NOx), sulfur oxides
(SOx), and particulate matter (PMx) separately due to the complexity of obtaining
reliable data. The Group acknowledges this limitation and is considering evaluating
potential approaches to enhance future reporting capabilities.
E2-4 Pollution of Air, Water and Soil
As described above, the primary source of air pollution associated with our operations
are the pollutants released during the combustion of fossil fuels when generating
heat and electricity for our assets. Measurement of air pollutants linked to this power
generation is challenging and mostly based on estimations due to limited insight on
AT’s side of our energy and electricity providers.
AT is not able to disclose amounts of each individual pollutant currently. While above-
mentioned constraints affect the accuracy and feasibility of precise reporting, the Group
remains committed to evaluating potential approaches for enhanced assessment and
disclosure in the future. Water and soil pollution are not material for AT. In addition, based
on our current operations, we do not generate or use microplastics in any material way.
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Social information
ESRS S1 Own workforce
Introduction
It is fundamental for a responsible business to ensure that everyone feels safe and
protected. Aroundtown takes significant steps to ensure that its work environment
positively impacts the health and wellbeing of its employees. Beyond this foundation,
the Group strives for excellence in key areas such as career development, training,
work-life balance, wellbeing, and diversity and inclusion - all essential for attracting
and retaining top talent. The interests, views and rights of its employees primarily
relate to human rights and health and safety. Aroundtown’s approach to workforce
protection is outlined in the following section.
Aroundtown’s suite of social policies - including Employee Code of Conduct, Diversity
Policy, Anti-Discrimination Policy, Human Rights Policy, Anti-Corruption Policy
and Whistleblowing Policy - enables the Group to effectively manage workforce-
related impacts, risks and opportunities. Designed with its employees’ interests in
mind, these policies apply across the entire workforce. The Policies reinforce the
Group’s commitments to protecting employees’ human rights, health and safety
while safeguarding against discrimination and harassment. Additionally, they
define employees’ role in preventing corruption and bribery within the Group. The
centralization of Aroundtown’s HR Department ensures standardized processes and
policies, optimizing knowledge and talent utilization across the organization.
High-level overview of disclosure
Standard
Indicator
ESRS S1
Own
Employees
S1. SBM-2 – Interests and views of stakeholders
S1. SBM-3 – Material impacts, risks and opportunities and their
interaction with strategy and business model
S1-1 – Policies related to own workforce
S1-2 – Processes for engaging with own workforce and workers’
representatives about impacts
S1-3 – Processes to remediate negative impacts and channels for own
workforce to raise concerns
S1-4 – Taking action on material impacts on own workforce, and
approaches to managing material risks and pursuing material
opportunities related to own workforce, and effectiveness of those actions
S1-5 – Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
S1-6 – Characteristics of the undertaking’s employees
S1-9 – Diversity metrics
S1-10 – Adequate wages
S1-11 – Social protection
S1-12– Persons with disabilities
S1-13 – Training and skills development metrics
S1-14 – Health and safety metrics
S1-15 – Work-life balance metrics
S1-16 – Remuneration metrics (pay gap and total remuneration)
S1-17 – Incidents, complaints and severe human rights impacts
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IROs or datapoints that were identified as immaterial to Aroundtown are not covered
in this report. In some cases, the Group makes use of the phase-in provisions (in
accordance with Appendix C of ESRS 1) and is committed to disclosing these
datapoints in the coming years.
Table 27
Material sustainability matters covered in ESRS S1
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Working
conditions
Secure
employment
Double
Positive
Impact / Risk /
Opportunity
Own
operations
Short-term /
Medium-term
/ Long-term
Working
time
Double
Positive
Impact / Risk /
Opportunity
Own
operations
Short-term /
Medium-term
/ Long-term
Adequate
wages
Double
Positive
Impact / Risk /
Opportunity
Own
operations
Short-term /
Medium-term
/ Long-term
Social
dialogue
Impact
Positive Impact
Own
operations
Short-term /
Long-term
Freedom of
association
Impact
Positive Impact
Own
operations
Short-term /
Long-term
Work-life
balance
Double
Positive
Impact / Risk /
Opportunity
Own
operations
Short-term /
Long-term
Health and
safety
Double
Positive
Impact / Risk /
Opportunity
Own
operations
Short-term /
Long-term
Material sustainability matters covered in ESRS S1
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Equal treat-
ment and
opportuni-
ties for all
Gender
equality and
equal pay
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Training
and skills
development
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Employment
& inclusion
of people
with
disabilities
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Measures
against
violence and
harassment
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Diversity
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Other work-
related
rights
Privacy
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
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S1. SBM-2 – INTERESTS AND VIEWS OF STAKEHOLDERS
Aroundtown integrates the interests, views, and rights of the workforce into its
strategy and business model by systematically assessing how its business activities,
operational practices, and strategic decisions affect its employees. Through the
participation in the Group’s Double Materiality Assessment (“DMA”), employees
directly identify areas of actual or potential impacts and risks. The Group also has
other channels through which workforce insights are gathered, such as the Employee
Satisfaction Survey, the HR Round Table, the Townhall Meeting, the Whistleblowing
System and informally, where insights are collected from employees by supervisors.
These inputs are analyzed and integrated into Aroundtown’s operational processes
and inform its strategic decision-making. The insights also influence AT’s policies on
human rights, diversity and inclusion, anti-discrimination, occupational health and
safety, whistleblowing, and the employee code of conduct, enabling proactive response
to potential adverse impacts. For more information on Aroundtown’s policies, refer to
sections S1-1 and G1-1 of this report.
Employees views directly shape the Group’s workforce management strategies and
inform initiatives such as training and career development programs, mental health
and well-being programs, flexible work arrangements, and efforts to foster a culture
of inclusivity, fairness, and social responsibility in the workplace. The Group tracks
key performance indicators such as metrics on employee satisfaction, occupational
health and safety, diversity and inclusion, turnover rates, human rights violation, data
privacy breaches, and many others, to measure and ensure the effectiveness of its
strategy. The Human Resources department, with the support of the Management
Body, maintains oversight of workforce-related matters.
S1. SBM-3 – MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND
THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL
Workforce Composition and Employment Structure
Aroundtown’s workforce encompasses direct employees in property management,
administration, and corporate services, as well as contracted non-employees in areas
such as maintenance and security. It comprises permanent and temporary staff, and
agency workers, engaged in full-time or part-time roles. Each plays a vital role in
the Group’s operations and may experience varying material impacts based on their
employment structures and functions. Refer to section S1-6 for detailed AT employees’
composition and characteristics.
Material Impacts and Risks of Aroundtown’s Operations on Workforce
Aroundtown recognizes that its employees can be materially impacted by the
undertaking business activities and relationships. Therefore, these impacts are fully
covered within the scope of AT’s DMA and ESRS 2 Disclosures. The 2024 DMA findings
highlighted specific areas directly affecting employees, mainly working conditions, as
well as equal treatment and opportunities. See Table 27 for a full list of impacts, risks
and opportunities (IRO) relating to Aroundtown’s workforce.
The Group understands that its material negative impacts could either be systemic/
widespread, where it relates to issues peculiar to a specific country or region, for
example, forced and child labor; or based on individual incidents, specific to its
business. Systemic changes in real estate market conditions, and economic downturns
could lead to employment uncertainties, with property management being most
vulnerable due to fluctuating demand for rental and facility services. Job security
and adequate wages are common priorities, however, temporary employees, hired for
specific projects or periods also face heightened risks of instability. Notwithstanding
the limited influence Aroundtown has on market forces, stakeholders emphasize its
role in either mitigating or exacerbating the risks.
While occupational health and safety (OHS) risks affect all employees, they are particularly
significant for construction, maintenance and facility management teams, where exposure to
workplace hazards is higher. Employees with disabilities who may require additional support
at the workplace are equally exposed to the risks. OHS risks are primarily incident-based
and require strict mitigation measures to effectively address its potential negative impacts.
Certain roles and functions might be demanding in terms of working time and stress
level. Employees in some departments, including finance, HR, operations, property
management, and construction may experience periodic workload pressures, working
overtime and irregular hours, which could impact their work-life balance and well-
being, if not carefully managed.
As an international Group with employees from 66 nationalities, effectively managing
the actual or potential material impact relating to diversity, inclusion, and equal
opportunities across gender, age, race, disability, and other differences is crucial.
Gender equality and equal pay disparity are systemic issues, with stakeholders
acknowledging progress but emphasizing the need for continuous improvements.
Similarly, data privacy, particularly for employees handling sensitive information,
presents incident-based concerns requiring strong safeguards to prevent breaches
and ensure data protection.
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Overall, the DMA found limited evidence of significant risks to workers based on their
characteristics, roles, or working contexts. Employees can freely identify and report
any unsafe working conditions, accidents, safety requirement, including other labor
and human right violations in the workplace through the Whistleblowing system,
and to the relevant departments including compliance and human resource, and
appropriate actions would be taken. Refer to section S1-3 for details on available
complaints mechanisms.
Addressing Potential Negative Impacts and Promoting Good Working
Conditions
The Group’s DMA revealed its impact in promoting good working conditions, equal
treatment, and opportunities for all employees by providing secure employment,
reasonable working hours, fair wages, work-life balance, and effective health and
safety measures, while ensuring the protection of human rights. These efforts not only
enhance employee satisfaction but also benefits Aroundtown by reducing turnover
costs, increasing productivity, and profitability. AT has implemented comprehensive
policies and initiatives that foster a positive work environment, as fully outlined in
sections S1-1 and S1-4, respectively.
Material Risks and Opportunities of Aroundtown Arising from Impacts
and Dependencies on Workforce
Conversely, Aroundtown admits that material risks arising from impacts and
dependencies on its workforce could have direct implications on its operations,
financial stability, and regulatory compliance. Shortage of skilled labor, maybe due
to external market conditions or demographic shifts can directly impact operational
efficiency and service quality. Past global health crisis, such as COVID-19, have
highlighted the vulnerability of workforce to similar future risks, with the potential of
causing increased absenteeism and disruptions in property management and leasing
operations.
Furthermore, employees’ compliance with labor laws, health and safety regulations,
and data protection requirements remains a priority, as non-compliance could lead
to penalties and reputational harm. To mitigate these risks, the Group continually
invests in workforce training and development, and regulatory compliance measures,
ensuring long-term business resilience while maintaining a high standard of service
across its operations.
Sustainability Transition
While the Group has not yet identified specific impacts relating to the transition to
greener and low carbon operations on its employees, it acknowledges that certain
roles— particularly in energy, operations, and construction—could experience shifts in
skill requirements. As sustainability efforts advance, there may be new opportunities
for employees to grow in emerging sustainability-focused roles, presenting both
challenges and career advancement potential.
S1-1 – POLICIES RELATED TO OWN WORKFORCE
Aroundtown has established policies to address various aspects of workplace
operations as presented in Table 28. These policies ensure compliance with ethical,
legal, and sustainability standards, prevent negative impacts and risks, and create a
fair, safe, and productive work environment for all employees.
Table 28
Policy Title
Short Description
Employee Code of Conduct
Defines ethical and behavioral standards expected of Aroundtown’s employees,
ensuring equal opportunity and a workplace free from discrimination and
harassment. It emphasizes a safe, healthy, and inclusive work environment,
upholds anti-corruption principles, and safeguards employees’ personal data
and confidentiality. The Compliance Manager, supported by departments and
divisions heads, oversees policy implementation. Employees can access the
policy via the Group’s website and intranet.
Diversity, Equality,
and Inclusion Policy
Promotes a fair and inclusive workplace culture, advancing equal
opportunities and eliminating discrimination based on gender, ethnicity,
disability, age, or other personal attributes. The Diversity Committee
oversees the implementation and integration of diversity initiatives across
the Group. The policy is accessible to all employees via the Aroundtown’s
website and intranet.
Anti-Discrimination Policy
Prohibits harassment and discrimination in all employment-related practices
based on race, gender, religion, disability, age, or sexual identity, etc. The
Human Resource Department, supported by Compliance Department and
other heads of departments, is responsible for policy, monitoring, enforcement
and addressing any violations. Employees can access the policy via the
Group’s website and intranet.
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Protection of Human Rights and Ethical Labor Practices
No material risks relating to forced and child labor were identified in the DMA.
Aroundtown operates within the European Union and the United Kingdom, where
strong human rights regulations and labor protections minimize the risk of forced
or compulsory labor and child labor across its operations. Additionally, the Group is
not part of high-risk industry such as manufacturing, which heavily dependents on
supplies from geographical areas where these risks may be prevalent.
However, the Group is strongly committed to upholding human and labor rights across its
operations. The policies outlined above established the foundation for ethical conduct,
workplace equality, fair remuneration, occupational health and safety, and protection from
discrimination, harassment, and exploitation. Aroundtown’s Human Rights Policy explicitly
prohibits forced and child labor as well as modern slavery and human trafficking.
Occupational Safety Commitment
Aroundtown’s Occupational Health and Safety (OHS) Policy underscores the Group’s
commitment to preventing workplace accidents through clear role definitions for
both management and employees, regular risk assessments, and ensuring compliance
to legal safety standards. The policy includes employee training, systematic incident
documentation, and ongoing monitoring of workplace conditions. This framework is
designed to minimize risks and safeguard the health and safety of all employees.
Commitment to Diversity and Non-Discrimination
The Group is committed to promoting a fair, inclusive, and equitable workplace.
Preventing and eliminating discrimination is one of the cornerstones of Aroundtown’s
policies, and is clearly specified in the Codes of Conduct for employees and business
partners, the Diversity Policy and the Anti-Discrimination Policy. These policies align
with the German General Act on Equal Treatment
(Allgemeines Gleichbehandlungsgesetz,
AGG)
and international labor and human rights standards.
The Anti-Discrimination Policy explicitly prohibit discrimination based on race,ethnic origin,
gender, religion or belief, disability, age, or sexual identity, whether directly or indirectly.
It applies throughout the entire employment lifecycle, from recruitment to termination,
including promotions and working conditions. In addition to the Whistleblowing
System, employees can report on discriminatory conduct directly to human resource
and compliance departments. The Group is committed to taking appropriate actions to
address and protect individuals affected by discrimination. The Group’s performance on
discrimination and other human rights issues are summarized in section S1-17.
Policy Title
Short Description
Human Rights Policy
Ensures respect for fundamental human and labor rights
including fostering a workplace free from forced labor, child labor,
and exploitation. It reinforces Aroundtown’s commitment to fair
remuneration, social security, privacy, rest and leisure, safe working
conditions, equality, and access to education and development.
The policy also addresses anti-discrimination, harassment
prevention, and ethical treatment. It is aligned with international
frameworks, including the UN Guiding Principles on Business and
Human Rights, OECD Guidelines for Multinational Enterprises, ILO
Conventions on Fundamental Principles and Rights at Work, and
International Bill of Human Rights. The Management Body and
Chief Compliance Officer oversee its implementation. The policy
applies to all employees and stakeholders and is accessible via
the Group’s website and intranet.
Anti-Corruption Policy
Establishes guidelines to prevent corruption, bribery, and unethical
practices in all operations. The policy applies to all employees,
directors, and business partners, covering interactions with clients,
suppliers, and public officials to prevent conflicts of interest and
fraudulent activities. The Compliance Officer, supported by the
Management Body, oversees policy implementation, and ensures
adherence. It is accessible to all employees via the Aroundtown’s
intranet.
Whistleblowing Policy
Provides secure and confidential mechanisms for employees,
stakeholders and impacted communities to report compliance
violations, unethical behavior or concerns, ensuring protection from
retaliation and discrimination. The Compliance Officer oversees
policy implementation and ensures all reports are investigated and
dealt with, in accordance with the Aroundtown’s internal procedure
and to the extent permitted by statutory laws. Employees can access
the policy and the link to the Whistleblower (BKMS) systems via the
Group’s intranet.
Occupational Health
and Safety Policy
Focuses on workplace accident prevention and fosters a safe and
healthy work environment for all its employees by ensuring hazard
prevention, risk assessments, and regulatory compliance. Senior
management and regional managers, in collaboration with the HR
department, oversee its implementation. The policy is accessible to
all employees via the Group’s website and intranet.
Global Information
Security Policy and
Acceptable Use Policy
Ensures the confidentiality, integrity, and security of personal and
business data in line with applicable laws and standards. These
policies regulate the collection, processing, storage, and sharing of
data, preventing unauthorized access, breaches, and misuse. They
apply to all employees, suppliers, and third parties handling the
Group’s or its customers data. The Chief Information Security Officer
is responsible for the communication and implementation of the
policies and are accessible to employees via Aroundtown’s intranet.
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Diversity, Equality, and Inclusion Policy is closely linked to the anti-discrimination policy.
It was last updated in 2024 and is aimed at promoting an inclusive workplace through
initiatives such as diversity challenge and mentorship. These initiatives are overseen by
the Diversity Committee, which comprises employee representatives from various levels
of the Group and ensures that strategic actions are integrated into daily practices. We
continue to monitor the progress and review the effectiveness of these policies and
related actions. Refer to our diversity metrics in section S1-9.
S1-2 – ENGAGEMENT WITH OWN WORKFORCE ABOUT IMPACTS
Integrating Employee Perspectives into Decision Making
Aroundtown actively integrates employees’ perspectives into its decision-making
processes to enhance inclusivity and workplace satisfaction. Employee engagement
follow a structured, corporate-level approach involving various methods. The
annual employee satisfaction survey remains the Group’s primary tool for collecting
feedback and is complemented by regular HR Roundtables where employees and
managers can engage directly with the HR Department. These sessions, not only
provide the forums to review key topics such as work-life balance, professional
development, and inclusivity, but also, opportunities for the HR Department to
update employees on the milestones and ongoing actions towards addressing
issues previously raised. Similarly, the annual town hall meeting is another
platform where employees are briefed by Management Body about the Group’s
projects and programs as well as insights into the future of Aroundtown, including
participation in a Q&A session. These engagements support every stage of the
Group’s interventions, such as identifying issues, determining the right mitigation
strategies, and evaluating the implementation and effectiveness of mitigation
actions. For more detail, please see the disclosure provided in ESRS 2 Gov-1 which
outlines ultimate accountability for the Group.
Moreover, in October 2024, Aroundtown launched the second round of the “Activate
the Base” program. This initiative encourages employees to contribute and implement
their own ideas for operational and sustainability improvements. With support from
an external coach, employees can successfully bring their projects to life, contributing
both to the Group and their own self development. While the results from the
employee-proposed sustainability initiatives will only be visible in 2025, the program
is already fostering a culture of innovation and engagement.
Effectiveness of Employee Engagement and Feedback Analysis
The effectiveness of Aroundtown employee engagement efforts is assessed through
targeted questions in the satisfaction survey, particularly in the sections on Feedback
and Communication as well as Meaningfulness and Participation. These questions
examine, for example, whether new ideas and diverse opinions are welcomed in the
workplace, whether employees feel their opinions matter, whether feedback is given,
received, and used constructively, and whether management communicates Group’s
updates effectively and in a timely manner. Feedback from both the survey and the
roundtable discussions are systematically analyzed to track engagement trends and
identify areas for improvements.
The Group’s Head of HR oversees these initiatives, ensuring that employees’ feedback
is collected and used to shape policies, decision-making and initiatives for managing
actual and potential workforce impacts. The insights gained inform targeted actions
to enhance workplace engagement, address concerns, and continuously improve
communication and participation across the Group.
On the other hand, Aroundtown recognizes and respects employees’ rights to establish
and join trade unions and to engage in collective bargaining. These fundamental
rights are explicit in AT’s Human Rights Policy, which applies to its workforce as well
as to its suppliers and business partners. However, to date, no instances of union
formation or collective bargaining have been recorded within the Group.
S1-3 – REMEDIATION OF NEGATIVE IMPACTS ON OWN WORKFORCE
Complaints Mechanisms
The Group is dedicated to addressing material negative impacts on its workforce through
clear and effective policies and procedures. It has established an effective grievance
mechanism for reporting workplace concerns, including discrimination, misconduct, or
violations of human and labor rights. Aroundtown’s Whistleblowing Policy describes
the procedures for a secure and confidential reporting of unethical behavior through
our Whistleblowing System for employees. The third party-managed Whistleblowing
System, which ensures confidential and anonymous reporting, allows employees and
external stakeholders to report violations confidently and without fear of retaliation.
It ensures that all concerns are addressed promptly, reinforcing AT’s commitment to
ethical conduct and human rights within the workforce. All submitted reports are
tracked and investigated objectively by the Compliance Department, following an
internal investigation procedure, as documented in the Group’s Investigation Policy.
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If a violation is confirmed or an issue is found to have caused material negative
impacts, appropriate disciplinary and corrective measures are taken, ranging from
warnings and fines to termination of employment, depending on the severity. For
violations by business partners, Aroundtown may require business partners to
implement corrective measures within a set timeframe. If violations persist, it reserves
the right to terminate the business relationship. The Group may pursue civil or
criminal prosecution or consult with relevant authorities, when necessary, especially
in cases involving non-stakeholders or external parties.
In addition to the Whistleblowing System, employees can directly approach the
responsible departments through their respective heads to express their concerns.
Supervisors also encourage open communication by inviting employees to share
issues during one-on-one check-in sessions. Section S1-2 outlines various engagement
channels such as HR Roundtables and Townhall meetings, where concerns can be raised
and addressed by the Head of HR, and the Management Body, respectively. For metrics
related to incidents, complaints and severe human rights, refer to section S1-17.
Strengthening Compliance
To foster a culture of accountability and inclusion and proactively prevent all negative
impacts, Aroundtown ensures all employees receive mandatory training on human
and labor rights including on diversity and anti-discrimination. The trainings are
mainly conducted on the Welcome Days and through the AT’s E-learning platform,
accessible via the Group’s intranet. Besides the strict requirement of employees to
uphold the values and principles promoted in the various trainings, Aroundtown
training framework makes it mandatory for all employees to pass the tests to confirm
their understanding of the training material. Additionally, new employees have to
review and sign the Code of Conduct, which outlines the ethical standards, employee
responsibilities and the reporting channel in case of any concerns.
While there is no specific method to measure employee trust in the grievance and
remediation mechanisms, the HR Roundtable provides an open forum for receiving
feedback, and if there are issues with these mechanisms, employees can directly
report to the Compliance or HR Departments for redress. These mechanisms are
also subject to annual reviews through HR audits, compliance assessments, and
employee feedback surveys to ensure effectiveness. The risks committee monitors the
effectiveness of the risk management processes for continuous improvement.
S1-4 – MANAGING MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
RELATING TO OWN WORKFORCE
Minimizing Negative Workforce Impacts and Ensuring Responsible Practices
The Group ensures its practices do not cause or contribute to material negative impacts
on its workforce by integrating responsible business policies, ethical governance, and
continuous monitoring across key operational areas, including procurement, sales,
and data use. It adheres to strict labor and human rights standards, fair employment
practices, and compliance frameworks to mitigate risks related to employee well-
being, job security, and workplace conditions.
Employees across all departments are equipped with the necessary tools, resources,
and training to perform their roles safely and professionally, minimizing potential
harm to themselves and others. In procurement, Aroundtown implements effective
due diligence processes, including KYC and AML screening, before selecting or
engaging with suppliers to prevent indirect harm to the workforce through supply
chain actions. Ensuring suppliers’ strong track records, reliability, and reputation is
critical, as suppliers’ failures such as an inability to meet commitments can lead to
project delays, increased costs, reputational damage, and, by extension, job losses or
adverse impacts on employees’ working conditions.
When tensions arise between mitigating material negative impacts and business
pressures, the Group prioritizes employee well-being while aligning with strategic
objectives. This is achieved through open dialogue with employees, proactive risk
assessments, and policy adjustments, ensuring long-term sustainability and a
responsible work environment.
Initiatives to Drive Positive Workforce Impacts
Aroundtown proactively manages material risks and opportunities related to its
workforce through its long-term targets and yearly goals (see section S1-5). The
following table outlines 2024 AT’s actions and initiatives to address the material
impacts identified during the DMA in 2024, designed to strengthen workplace
integrity, promote inclusion, enhance well-being, and support employee development.
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Table 29
Impact
Initiatives for Positive Impacts
Violence & Harassment
Prevention;
Social Dialogue, Freedom
of Association
•
Whistleblowing (BKMS) system: provides a secure and confidential channel
for reporting misconduct, reinforcing workplace integrity.
•
Annual compliance training: strengthens knowledge on ethical practices
and human rights, ensuring compliance with legal and corporate standards.
•
HR Roundtable: allow employees and managers the opportunity to engage,
ask questions and address concerns directly with the HR Department.
Diversity;
Employment &
Inclusion of People
with Disabilities;
Gender Equality &
Equal Pay
•
Anti-discrimination training fosters an inclusive work culture by raising
awareness and promoting equal opportunities.
•
Language training programs: focusing on AT’s widely spoken languages,
English and German, is aimed at promoting effective communication and
collaboration among employees, including tearing down cultural barriers,
minimizing misunderstandings, build trust and foster an inclusive workplace.
In addition, a half-day training on intercultural communication is organized
for new employee during welcome days.
•
Diversity Challenge, World Food Challenge, and Pride Month celebrations:
promotes personal and cultural appreciation, inclusivity, and team bonding.
Working Time & Work-Life
Balance
•
Flexible work arrangements (including remote work option): enhances work-
life-balance, improve job satisfaction and reduce stress.
•
Mental health programs: support emotional well-being, leading to increased
productivity and lower turnover rates.
•
Time tracking implementation via Rexx & QR code terminals: enhances
operational efficiency and transparency in management of work time.
•
AT-World – an exclusive network of flexible workspaces expands work
location options for Aroundtown employees, thereby promoting flexibility
and well-being.
•
Ticket giveaways (77 events, 869 tickets in 2024): enhances employee
engagement, promotes leisure and rewards contributions to the Group’s
success.
Health & Safety
•
Internal OHS risk assessments: identify and mitigate workplace hazards,
ensuring a safer work environment.
•
Emergency preparedness drills: improves readiness for unexpected incidents,
ensuring employees’ safety.
•
Workplace safety training educates employees on proper safety protocols to
minimize workplace accidents.
•
Gym for employees at the Berlin headquarters and access to a health and
wellbeing subscription service platform, which includes gym subscription,
subsidized by Aroundtown for all employees in Germany: promoting
employees physical and mental fitness.
•
Flu & COVID vaccinations, workplace eye exams and health checks: promotes
employee health and welbeing and reduces absenteeism due to illness.
•
Collaboration with a virtual platform offering virtual sports and mental health
prevention courses, etc.
Impact
Initiatives for Positive Impacts
Training & Skills
Development
•
Leadership training: equipping the Group’s current and potential leaders
with fundamental critical thinking and problem-solving skills.
•
Performance and career development reviews (including 180-degree
survey): identifying skill gaps, and career development opportunities that
align with both employees’ aspirations and business.
•
Personal and professional development coaching: supports employees
in unlocking their full potential, promotes engagement and reinforcing
job security. It enhances self-awareness, resilience, and problem-solving
abilities, contributing to better work-life balance and well-being.
•
“Activate the base” program: encouraging employees to implement their
own sustainability projects while receiving guidance from external coach
Secure Employment;
Adequate Wage
•
Apprenticeship program: to build career pathways and hands-on experience,
helping young people to build long-term careers in real estate.
•
Online learning platform: equips employees with the skills needed for job
security and professional development.
•
Career paths rollout for all employees: enable employees to visualize and
plan long-term career growth within the Group.
•
Mentoring and coaching program: offers personalized development support,
enhancing leadership and career progression.
Privacy
•
Annual GDPR training: ensures employees understand data protection
regulations and enhances compliance.
•
Cybersecurity protocols: protects sensitive company and employee information
from cyber threats.
•
Data encryption measures: secure personal and Aroundtown’s data, ensuring
privacy and confidentiality.
•
Awareness Day: a two-day event that raises awareness on activities of various
departments in Aroundtown and promotes data and information security.
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Evaluation of Initiatives and Improvements
Aroundtown tracks and assesses the effectiveness of its actions and initiatives
through internal and external audits, impact assessments, and compliance verification
processes. Key systems, including information security and OHS management, are
regularly reviewed to ensure adherence to best practices and regulatory standards.
The Legal, Compliance and Human Resource departments continuously monitor
alignment with evolving labor laws, ensuring proactive adjustments where necessary.
Progress is measured against key performance indicators (KPIs) on various impact
areas, including gender pay gap and other diversity metrics, average training hours
and investment in training, human rights violations, OHS metrics, data breaches,
etc. Workforce engagement tools, such as annual employee satisfaction surveys, HR
roundtables, and grievance mechanisms, provide valuable employee insights, enabling
data-driven improvements. Additionally, AT’s participation in external ESG ratings and
benchmarking allows for comparison with industry peers and learning. Continuous
impact evaluations foster a resilient and future-proof workforce at Aroundtown.
Resource Allocation for Managing Workforce Impacts
The Group dedicates significant financial, technological, and human resources to
proactively managing material impacts on own workforce. Each of the initiatives
documented in Table 29 requires reasonable amount of resources to implement. The
Human Resources department invest in tools and the creation of learning material for
workforce training and development programs, ensuring employees remain adaptable
and equipped with the skills necessary for job security and stability. The department also
oversees employee feedback platforms to gather insights for informed strategic decisions.
Managing health and safety risks, including risk assessments, addressing gaps, and
enforcing compliance, requires substantial resources channeled into enhancing
workplace safety and health programs. Similarly, protecting workforce data privacy
necessitates substantial investment in information technology and cybersecurity
infrastructures and programs, as do compliance related initiatives and other essential
functions. Section S1-13 has details on training metrics, including average cost per
FTE and hours spent.
Managing Workforce Impacts from the Green Transition
As outlined in section ESRS S1 SBM-3, the potential negative impact of the transition to
greener and low-carbon operations on employees are recognized but not yet established.
However, should such risk become eminent, Aroundtown is prepared to intensify effort to
upskill affected employees through targeted training in areas such as energy-efficient
building management, sustainability practices, and compliance. This approach aims at
equipping employees with relevant expertise in increasingly important business areas
and fostering their professional development. As this event evolves, the Group remains
committed to adapting its strategies to ensure these impacts are effectively mitigated.
S1-5 TARGETS RELATED TO MANAGING MATERIAL IMPACTS, RISKS
AND OPPORTUNITIES
Aroundtown sets targets through a structured process based on internal policies,
strategic priorities, regulatory requirements, and operational needs, incorporating
direct engagement with its workforce. After careful assessment at the departmental
level, targets are reviewed and approved by Management Body to ensure alignment
with business objectives. These targets aim to enhance employee health, safety and
well-being, job satisfaction and career development, and foster diversity and human
rights, aligning with workforce expectations.
We establish long-term targets, typically exceeding five years, and short-term targets
that adhere to industry best practices and recognized standards. These targets are
designed for long-term stability, maintaining consistent definitions and methodologies
to enable year-on-year comparability while allowing for periodic adjustments in
response to regulatory and business changes.
Long-term Targets
y
Be among the top ten most attractive employers in the commercial real estate sector
by 2030
y
Maintain the total number of confirmed cases of discrimination under 3%
y
Offer a minimum of 12hrs of training and development opportunities per FTE
2025 Goals
y
Continue to offer volunteering program organized as a Group-wide Social Day for
employees
y
Increase health measurements and services offers for employees, including mental
health such as psychological support
y
Expand the Group’s 180-degree surveys to 100% of its workforce to encourage self-
development among employees
y
Complete the implementation of the newly developed staff career path to create
more transparency on development opportunities
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Metric: Our Workforce
Aroundtown monitors and measures a series of metrics to help understand progress in topics
relating to its workforce. The scope of this metrics covers all its employees, as presented
in organizational boundaries under Methodology and EPRA sBPR Data Preparation Notes.
Data is collected through various regional offices and subsequently exported to the
Personnel Management System where available, or directly to the payroll systems. The
Human Resources Department centrally consolidates and evaluates employee data. The
Group tracks both the headcount of employees and Full-Time Equivalent (FTE) metrics.
Unless explicitly stated otherwise, headcount is primarily used as the basis for calculating
indicators. The reported data covers the period from January 1, 2024, to December 31, 2024.
S1-6 – EMPLOYEE HEADCOUNT AND OVERVIEW
The following disclosure of employee headcount includes all individuals directly
employed by Aroundtown. The Group has started to track the characteristics and other
data related to its non-employees, for example, workers engaged through third-party
agreements and will report this in the coming years. The total headcount of 1668 in the
S1-6 disclosures is also mentioned in the financial statements on p. 237.
Table 30
Employee Headcount
Metric
2024
2023
Number
Percentage
Number
Percentage
Total
1,668
100.0%
1,706
100.0%
Female
816
48.9%
833
49.0%
Male
852
51.1%
873
51.0%
Age group <30
279
16.7%
292
17.1%
Age group
≥30 - < 50
1,036
62.1%
1,041
61.0%
Age group ≥ 50
353
21.2%
345
21.9%
Employee Headcount by Geography
Metric
2024
2023
Number
Percentage
Number
Percentage
Germany
1,358
81.4%
1,356
79.5%
Female
647
47.6%
668
49.3%
Male
711
52.4%
688
50.7%
United Kingdom
73
4.4%
65
3.8%
Netherlands
68
4.1%
70
4.1%
Cyprus
68
4.1%
149
8.7%
Bulgaria
65
3.9%
35
2.1%
Employee Headcount by Nationality
Share as % of
total workforce
Share as % of
all managerial
positions
Share as % of
total workforce
Share as % of
all managerial
positions
Germany
62.3%
55.6%
61.9%
54.2%
Romania
4.4%
0.4%
3.7%
0.4%
Bulgaria
4.3%
0.7%
2.4%
0.4%
Cyprus
4.0%
10.1%
8.2%
13.9%
United Kingdom
4.0%
6.0%
3.4%
5.1%
Israel
3.5%
9.7%
3.2%
9.2%
Others
17.5%
17.5%
17.3%
16.8%
No. of
nationalities
(incl. Germany)
66
67
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Table 31
Employee Headcount by Contract Type
Metric
2024
2023
Number
Percentage
Number
Percentage
Permanent employees
who identify as female
677
51%
677
50%
Permanent employees
who identify as male
654
49%
670
50%
Permanent employees
who identify as 'other'
0
0%
0
0%
Temporary employees
who identify as female
139
41%
156
43%
Temporary employees
who identify as male
198
59%
203
57%
Temporary employees
which identify as 'other'
0
0%
0
0%
Non-guaranteed
hours employees who
identify as female
9
47%
9
53%
Non-guaranteed
hours employees who
identify as male
10
53%
8
47%
Non-guaranteed
hours employees who
identify as 'other'
0
0%
0
0%
Table 32
Hiring and Turnover metrics
Units of
Measure
Metric
2024
2023
Number
Percentage
Number
Percentage
Total
number
and rate
of new
employee
hires
New employee hires
364
21.8%
397
23.3%
Female
166
45.6%
194
48.9%
Male
198
54.4%
203
51.1%
Age group <30
128
35.2%
154
38.8%
Age group ≥30 - < 50
199
54.7%
189
47.6%
Age group ≥ 50
37
10.2%
54
13.6%
Open positions filled
by internal candidates
(internal hires)
140
27.8%
165
29.4%
Average
amount (€)
Average hiring
cost/FTE
510.3
N/A
536.9
N/A
Total
number
and rate of
employee
turnover
Employee turnover
314
16.0%
380
18.3%
Female
157
50.0%
161
42.4%
Male
157
50.0%
219
57.6%
Age group <30
84
26.8%
89
23.4%
Age group ≥ 30 - < 50
166
52.9%
212
55.8%
Age group ≥ 50
64
20.4%
79
20.8%
Employee initiated
turnover
184
9.4%
264
12.7%
Female
93
50.5%
115
43.6%
Male
91
49.5%
149
56.4%
Age group <30
52
28.3%
60
22.7%
Age group ≥ 30 - < 50
103
56.0%
158
59.8%
Age group ≥ 50
29
15.8%
46
17.4%
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S1-9 – DIVERSITY METRICS
Table 33 presents the representation of male, female, and other employees across various
levels of the Aroundtown Group, highlighting key areas of specialization and the inclusion
of employees with disabilities.
S1-10 – ADEQUATE WAGES
All employees of Aroundtown are paid an adequate wage, in line with applicable benchmarks.
The Group’s remuneration policy is designed to offer equitable compensation that reflects
individual responsibilities, competencies, and performance. Regular reviews are conducted
to maintain competitiveness and compliance with the benchmarks.
S1-11 – SOCIAL PROTECTION
Across all AT countries of operation, employees are covered by public social protection
programs, providing support for key life events such as sickness, unemployment, employment
injury, disability, parental leave, and retirement. These programs ensure protection during
periods of incapacity or transition.
In addition to public programs, AT operations in:
y
Germany offers a company pension scheme, in compliance with state regulations,
through an external insurance provider with employer contributions.
y
Bulgaria has a company-sponsored sickness prevention program to support
employee well-being.
y
Cyprus provides additional company programs for employment injury and acquired
disability.
This approach leverages national systems while enhancing the coverage where needed.
S1-13 – TRAINING AND SKILLS DEVELOPMENT METRICS
Aroundtown considers continuous investment in training and development of its employees
essential for both personal and professional growth, fostering business resilience, innovation,
engagement, and long-term retention. The Group’s performance is shown in the table below:
Table 33
Diversity metrics
EPRA Code
Units of Measure
Metric
2024
2023
Diversity-
Emp
Percentage (%)
of employees
who identify
Female (Board of Directors)
29%
29%
Male (Board of Directors)
71%
71%
Female (top management)
(1)
11%
22%
Male (top management)
89%
78%
Female (senior management)
(2)
40%
34%
Male (senior management)
60%
66%
Female (junior management)
(3)
36%
39%
Male (junior management)
64%
61%
Female (all management)
(4)
33%
35%
Male (all management)
67%
65%
Female employees (revenue
generating management functions)
37%
32%
Male (revenue generating
management functions)
63%
68%
Female (STEM-related positions)
19%
23%
Male (STEM-related positions)
81%
77%
S1-12
Number
Employees with disabilities
40
37
Percentage (%)
2.4%
2.2%
1)
Includes the Management Body, international executives, and other top managers (e.g., Managing Directors ). The recent
restructuring and realignment of roles have influenced the current dynamics of female representation compared to previous year
2)
Includes Heads of Departments
3) Includes Team Leads
4) Includes junior, senior and top managements
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S1-14 – HEALTH AND SAFETY METRICS
All employees of Aroundtown are covered by the Group’s health and safety management
system based on legal requirements. Its performance on maintaining the health and safety
of its employees within its work environment is shown in Table 35 below:
The health and safety metrics calculation approach mainly follows EPRA sBPR
guidelines and is tailored to unique circumstances of the Group. Below are the details
of each individual metric:
y
Injury/Accident Rate: Refers to the frequency of injuries, relative to the total time
worked by all employees during the reporting period. We track accidents and injuries
as a single metric and do not include commuting accidents to ensure consistency
across all international Aroundtown offices.
y
Lost-Time Injury Frequency Rate (LTIFR): This is calculated as the number of injuries
per million hours worked. The calculation is based on actual employee FTE, adjusted
for unpaid absences. It also accounts for the standard working hours in each
Aroundtown country of operation (e.g., 7.5 hours per FTE in the UK and 8 hours per
FTE in other locations)
Table 34
Training and Skills Development metrics
EPRA Code
Units of
Measure
Metric
2024
2023
Emp-Dev
Percentage
(%) of total
workforce
Percentage (%) of total employees
who received regular performance
and career development reviews
during the reporting period
35.8%
26.6%
Emp-
Training
Average
number of
training hours
All employees
13.2
16.0
Female
15.3
18.7
Male
11.2
13.6
Management
22.1
26.6
Female
31.4
38.3
Male
17.4
20.3
Non-management
14.3
18.1
Female
16.4
20.2
Male
12.0
15.9
Part-time employees
9.9
19.3
FTE employees
17.1
20.6
N/A
Average
amount (€)
Average investment in training
per FTE
674.7
696.3
Percentage (%)
Percentage (%) of FTEs that
participated in leadership
development program
2.8%
1.9%
Percentage (%) of FTEs that
participated in language program
10.7%
18.1%
Table 35
Health and Safety metrics
EPRA Code
Metric Description
Metric
2024
2023
H&S-Emp
Number of injuries/accidents
per total time worked
Injury/accident rate
0.000003
0.000004
Number of injuries per
million hours worked
Lost-Time Injury
Frequency Rate (LTIFR)
2.5
4.0
Number of days lost per
total time worked
Lost day rate
0.00004
0.0006
Number of days lost per
total days scheduled to be
worked by employees
Absentee rate
5.5
5.1
(*)
Work-related fatalities
Number of fatalities
0.0
0.0
N/A
Recordable work-related
injuries/accidents for own
workforce
Number of injuries/
accidents
7.0
12
(*)
2023 figure is restated due to a change in the calculation methodology
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y
Lost Day Rate: Defined as the number of lost days per total hours worked. This metric
is based on actual employee FTE and considers the average number of working days
per country.
y
Absentee Rate: Calculated as the number of days lost per total scheduled working
days. This includes only paid absences due to sickness and workplace accidents,
while unpaid sickness and absence days are excluded.
y
Number of Fatalities: Includes only work-related fatalities. Fatality being death of an
employee occurring during the reporting year, arising from an occupational disease
or injury sustained or contracted while performing work for the Group.
S1-15 – WORK-LIFE BALANCE METRICS
Family-related leave such as parental leave, paternity leave, maternity leave, caregiving
leave among others are within the rights of all Aroundtown employees. It allows
employees to maintain a healthy balance between professional and personal life,
reducing stress, and enhancing overall well-being. Aroundtown’s work-life balance
indicators are shown in Table 36.
Table 36
Work-life Balance metrics
2024
2023
(*)
Number
Percentage
Number
Percentage
Employees that
took family-
related leave
179
10.7%
N/A
N/A
Female
127
15.6%
N/A
N/A
Male
52
6.1%
N/A
N/A
(*)
This indicator is tracked for the first time in 2024 in compliance with ESRS, therefore data for 2023 is unavailable.
(*)
It was calculated as the ratio of female to male pay gap in 2023 report. To fully align to EPRA sBPR calculation methodology,
which is the ratio of male to female, 2023 figure has been restated..
S1-16 – REMUNERATION METRICS (PAY GAP AND TOTAL
REMUNERATION)
Table 37 presents the gender pay gap among AT employees, which measures the
disparity in earnings between male and female employees. Based on ESRS, this
indicator is calculated by comparing the average pay levels of female employees to
those of male employees, expressed as a percentage of the average pay level of male
employees. For EPRA sBPr, the ratio is calculated by dividing the average pay of male
employees by the average pay of female employees. The Group closely monitor and
report pay gap on various levels of aggregation to enhance transparency and align
with widely accepted standards. The data is split based on employee remuneration
(salary and bonus) and basic salary in relation to employee level.
Table 37
Gender Pay Gap
Metric
Description
ESRS (%)
EPRA (ratio)
2024
2023
2024
2023
(*)
Remuneration
(salary and
bonus) Pay
Gap
Executive
43.9%
50.9%
1.8
2.0
Management
21.9%
30.3%
1.3
1.4
Non-management
17.2%
16.7%
1.2
1.2
All employees
33.3%
31.7%
1.5
1.5
Salary
Pay Gap
Executive
29.8%
49.2%
1.4
2.0
Management
17.1%
28.1%
1.2
1.4
Non-management
15.7%
15.9%
1.2
1.2
All employees
26.7%
28.6%
1.4
1.4
Total
compensation
ratio
Ratio of the highest
paid individual to the
median annual total
compensation for all
employees (excluding
the highest paid
individual)
68.3
32.6
68.3
32.6
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S1-17 – INCIDENTS, COMPLAINTS AND SEVERE HUMAN RIGHTS
IMPACTS
Aroundtown monitors and report human rights issues and incidents in the workplace,
ensuring accountability and compliance, as shown in Table 38.
Table 38
Issues and Incidents
EPRA Code
Units of
Measure
Metric
2024
2023
N/A
Total
number
Incidents of discrimination (including
harassment)
0
(*)
0
Complaints filed through channels
for people in own workforce to raise
concerns
0
(*)
0
Complaints filed to National Contact
Points for OECD Multinational
Enterprises
0
0
Severe human rights issues and
incidents connected to own workforce
0
0
Severe human rights issues and
incidents connected to own
workforce that are cases of non-
respect of UN Guiding Principles and
OECD Guidelines for Multinational
Enterprises
0
0
Amount (€)
Material fines, penalties, and
compensation for damages as result
of violations regarding social and
human rights factors
0
0
Material fines, penalties, and
compensation for severe human
rights issues and incidents
connected to own workforce
0
0
(*)
only discrimination cases that resulted in sanctions or actions towards the accused persons are reported
(**) only if a complaint led to a confirmed compliance case, is it reported here
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ESRS S2 Workers in the Value Chain
Introduction
At Aroundtown we are committed to upholding high standards of social responsibility
and ethical conduct across our operations and supply chain, and we recognize the
critical role that workers within our value chain play in the success of our business
and the achievement of our sustainability goals.
Central to our strategy is the integration of human rights due diligence across all
supplier relationships, guided by our Business Partner Code of Conduct (“BPCoC”). This
document outlines our expectations and requirements for human rights protection,
including respecting employees’ rights to freedom of association and collective
bargaining, providing fair remuneration, and prohibiting child, forced, and compulsory
labor. We conduct regular risk assessments to identify potential vulnerabilities,
enforce compliance with standards for fair wages, secure employment, safe working
conditions, health and safety, and ensure that workers’ voices are heard through
effective mechanisms. Our efforts are dedicated to fostering workplaces free from
harassment and discrimination of any kind while upholding ethical practices across
our supply chain.
Through these efforts, Aroundtown aims not only to mitigate risks but also to
create opportunities to drive positive social and economic outcomes. This proactive
approach reflects our alignment with global sustainability standards and supports our
long-term ESG strategy, ensuring that our supply chain contributes to a responsible,
resilient, and sustainable business model.
The following table outlines material sustainability matters in ESRS S2:
IROs or datapoints that were identified as immaterial to Aroundtown are not covered in
this report. In some cases, AT decided to use the phase-in provisions (in accordance with
Appendix C of ESRS 1) and is committed to disclosing these datapoints in the coming years.
High-level overview of disclosure
Standard
Indicator
ESRS S2
Workers in the
Value Chain
S2. SBM-2 Interests and views of stakeholders
S2. SBM-3 – Material impacts, risks and opportunities and their
interaction with strategy and business model
S2-1 – Policies related to value chain workers
S2-4 – Taking action on material impacts on value chain workers, and
approaches to managing material risks and pursuing material opportunities
related to value chain workers, and effectiveness of those action
S2-5 – Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
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S2. SBM-2 Interests and views of stakeholders
For more information on interests and views of stakeholders, including workers in the
value chain, please see ESRS 2 section SBM-2.
S2. SBM-3 Material Impacts, Risks and Opportunities and their
Interaction with Strategy and Business Model
All value chain workers who can be materially impacted by Aroundtown - whether through
direct operations, value chain activities or the use of our services - are included in the scope
of disclosure under ESRS 2. Please refer to section ESRS 2-SBM-2 for further information.
The material impacts, risks and opportunities identified with regards to working
conditions of value chain workers, focused on secure employment, working time,
adequate wages and health & safety, are mostly connected to AT’s real estate
development and refurbishment activities. Given our business model, which involves
property refurbishment, workers in the value chain are concentrated primarily in
construction companies and its subcontractors. Whereas Aroundtown aims to ensure
suppliers’ compliance with its Group policies that address adherence to fair and safe
working conditions, and monitors suppliers’ treatment of workers in due diligence
processes and by providing reporting channels for potential issues, the Group has
limited oversight over its construction companies’ subcontractors. Hence, their
workers may be exposed to material impacts such as occupational health and safety
risks, fair working conditions and broader labor rights concerns.
AT acknowledges that a reliance on subcontracted construction and renovation workers
creates both risks and opportunities that impact its overall business operations.
These workers are essential to property development, renovations, and maintenance,
yet their working conditions—secure employment, working time, adequate wages, and
health & safety—pose material challenges.
The key risks are:
y
Health & Safety Hazards:
Exposure to hazardous materials and unsafe working
conditions may lead to accidents, legal liabilities, and reputational damage.
y
Labor Rights Compliance:
Subcontractors operate independently, making oversight
of fair wages, working hours, and job security more challenging. Non-compliance
with labor standards could result in regulatory penalties or project delays.
y
Supply Chain Vulnerabilities:
Dependence on subcontractors increases exposure to
workforce disruptions due to poor employment conditions or non-compliance issues.
Key opportunities:
y
Sustainable Workforce Practices:
Implementing due diligence procedures and
policies for subcontractors can improve worker conditions, reducing risks and
enhancing brand reputation.
y
Operational Efficiency:
Ensuring safe and fair working conditions may lead to higher
productivity and lower turnover rates among subcontracted workers, positively
affecting project timelines and quality.
y
Competitive Advantage:
A strong commitment to fair labor practices can enhance
investor and customer trust, aligning with ESG priorities.
Finally, these risks and opportunities are integrated into the strategy and business
model by taking a number of actions to mitigate risks and capitalize on opportunities:
y
Supply Chain Risk Management:
Conducting due diligence on subcontractors before
engagement ensures compliance with labor rights and health & safety standards.
y
Policy Enforcement:
Implementing strict contractual obligations for subcontractors
to adhere to fair wages, working hours, and safety measures.
y
Ongoing Monitoring & Engagement:
Regular checks onsite at the construction in
accordance with legal obligations and providing the opportunity to report any issues
via the whistleblowing system accessible to employees and external people.
Table 39
Material sustainability matters covered in ESRS S2
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Working
conditions
Secure
employment
Impact
Positive
impact
Value chain
(upstream)
Short-term /
Long-term
Working
time
Adequate
wages
Health and
safety
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Value Chain Workers Affected by AT’s Operations
The following categories of Aroundtown’s value chain workers are included in this
disclosure and are subject to material impacts:
(*)
1. Construction and Renovation Workers
Construction and renovation workers are subcontracted workers involved in property
development, renovations, or refurbishments. These are workers working on the Group’s site
but who are not part of Aroundtown’s own workforce. Their material impacts may include
workplace occupational health and safety risks, exposure to hazardous materials, and the
potential for non-compliance with labor standards by contractors. These potential impacts
have been identified through AT’s Supply Chain Risk Assessment and are addressed by the
Group’s applicable policies and due diligence procedures before or during the engagement of
construction and maintenance companies. Given that subcontractors operate independently,
and are not under AT’s direct oversight, their workers may be more vulnerable to potential
negative impacts, particularly regarding fair working conditions and labor rights compliance.
2. Property Maintenance and Facility Management Personnel
Workers responsible for cleaning, landscaping, pest control, and general property upkeep.
These are workers working on the Group’s site but who are not part of AT’s own workforce
and may face material impacts related to wage adequacy, health and safety, job security,
or fair treatment by outsourcing companies. Compliance with these standards is ensured
through AT’s BPCoC and verified through due diligence procedures on such providers.
3. Energy, Utility, and Waste Management Workers
Individuals employed by service providers that handle the supply of utilities, energy
management, or waste disposal may face risks such as exposure to hazardous environments
or low wages in certain jurisdictions. These are workers working for entities in the Group’s
upstream value chain. However, as such companies are mostly owned and run by local
governments and highly regulated companies, the risks can be considered as minor.
4. Material and Equipment Suppliers
These are workers working for entities in the Group’s upstream value chain, who resource,
produce or deliver construction materials, furniture, or technology solutions for Aroundtown
properties. They may be potentially subject to forced labor or poor workplace conditions,
depending on where the material and products are sourced and manufactured. Aroundtown
acknowledges these potential risks which is why human rights due diligence checks are
conducted on new suppliers and renewed on existing suppliers on a regular basis.
S2-1 Policies related to Value Chain Workers
The policies in place at Aroundtown that address identified material risks relating to
working conditions – secure employment, working time, adequate wages and health
and safety – of value chain workers are listed below:
AT’s Human Rights Policy and BPCoC outline the Group’s commitment to ensuring
ethical business practices and the fair treatment of value chain workers. These
policies collectively aim to uphold fundamental human rights, prevent discrimination
and harassment, and promote responsible business conduct across the value chain.
In addition to the above-mentioned policies, AT provides a whistleblowing system
for stakeholders, including workers in the value chain, to report any potential human
rights-related issues or compliance cases. The Whistleblowing System was established
according to the Group’s internal Whistleblower Policy and can be accessed via
Aroundtown’s website. Besides providing guidance on what issues are relevant to
report according to AT’s “Speak-up” system, it also states clear description of how the
report is made and what the consequences are. Reporting via the system can be made
anonymously. This system ensures that workers can raise issues, have their complaints
fairly considered, without the fear of retaliation. Through these mechanisms, AT aims
to foster fair practices and a collaborative approach to labor rights across its value
chain.
Through these policies, Aroundtown seeks to foster a responsible and sustainable
supply chain, ensuring that all workers in the value chain are treated fairly and
addressing any potential risks related to labor rights violations.
Table 40
Policy Title
Short Description
Human Rights Policy
The Human Rights Policy lists twelve basic human rights, including the right
to equality, freedom of speech, thought and religion, and right to a safe work
environment, which apply not only for its own employees but also tenants
and workers in the supply chain. The policy further emphasizes its zero-
tolerance approach to modern slavery, human trafficking and forced labor and
outlines its application for business partners and reporting and monitoring
of potential violations.
Business Partner Code of
Conduct (BPCoC)
The BPCoC extends AT’s human rights commitments to suppliers, contractors,
and business partners, to managing business matters in an ethical way across
the value chain. It includes provisions on worker safety,
fair working conditions,
and responsible employment practices. The BPCoC explicitly prohibits child
labor and forced labor and addresses precarious work by requiring compliance
with applicable labor laws. Aligns with applicable ILO standards.
(*)
AT’s operations are entirely located within the European Union and the UK, where strict regulatory frameworks and
enforcement mechanisms significantly mitigate the risk of child labor, forced labor, or compulsory labor. There is no
significant risk of such labor practices within AT’s value chain in Europe.
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Aroundtown adheres to internationally recognized frameworks to guide the
implementation of its policies, including:
y
Ten Principles of the UN Global Compact
y
International Labor Organization (ILO) Core Conventions
y
OECD Guidelines for Multinational Enterprises
y
UN Guiding Principles on Business and Human Rights (UNGPs)
These frameworks provide essential guidance in shaping Aroundtown’s policies
related to value chain workers, ensuring a structured approach to managing human
rights risks, protecting labor rights, and promoting ethical business conduct.
Scope and Responsibility of the Policies
The scope of AT’s Human Rights Policy and its BPCoC encompasses ethical labor
practices, human rights protections, and responsible business conduct across the
entire value chain. These policies apply globally to Aroundtown, its subsidiaries,
affiliated companies, and all business partners. Developed to reflect AT’s commitment
to upholding human rights and ethical business practices, these policies apply to all
employees, contractors, and partners engaged in Aroundtown’s operations.
The Management Body and Chief Compliance Officer are responsible for overseeing
the implementation and enforcement of the Human Rights Policy and the BPCoC. This
includes ensuring compliance with human rights standards, ethical labor practices,
and responsible supply chain management.
Commitments and Approach to Human Rights Relevant to Value Chain
Workers
Aroundtown is committed to upholding human rights across its value chain. This
commitment is grounded in key policies mentioned before, including the Human Rights
Policy and the Business Partner Code of Conduct, as well as the whistleblowing system.
Our Human Rights Policy was established in accordance with internationally human rights
recognized standards, including the International Bill of Human Rights, which consists of
the Universal Declaration of Human Rights and the two Covenants that implement it. The
policy also outlines our expectations towards our suppliers to respect the interests, views
and rights of our value chain workers. Yet, most important in our business relationships is
our BPCoC, which needs to be signed by our business partners and requires compliance
with internationally recognized labor and human rights principles, ensuring responsible
business conduct throughout AT’s operations and supply chain.
To ensure AT’s Human Rights Policy framework is translated into practice and
implemented at every level of the business and integrated into business relationships
with suppliers, AT’s approach encompasses a number of actions listed below.
Creating Awareness and Human Rights Trainings
Within its own operations, Aroundtown ensures that employees respect human rights
and understand the issues and risks surrounding this topic by integrating human
rights topics and awareness into its compliance training programs. This ensures that
employees are educated on topics of respect of human rights, non-discrimination,
and fair business practices. The signing of the Employee Code of Conduct by every
employee also commits them to respecting human rights and upholding values of
non-discrimination and fair treatment in AT’s own operations.
Business Partner Code of Conduct
When it comes to working with suppliers in the value chain on adherence with
human rights, Aroundtown first and foremost, relies on its BPCoC, which all business
partners with contracts of above €5,000 are requested to sign. Thus, business
partners acknowledge their responsibility for respecting their workers’ human
rights and the adherence to international human rights law and frameworks, as well
as to AT’s expectation to observe all applicable environmental, health and safety
regulations in their operations. The only exemption from signing our BPCoC exists
for large corporations, which have their own codes of conduct – provided that they
are in line with our standards - or those business partners operating in heavily
regulated sectors.
Human Rights Due Diligence Process
With a view of identifying potential human rights violations in the supply chain,
Aroundtown conducts a human rights due diligence procedure (“HRDD”) on high-risk
suppliers. These are categorized according to their economic sector and countries of
operation, considering potentially higher risks, particularly in the areas of construction
and refurbishment/maintenance, as well as for companies operating outside the EU.
For instance, suppliers are categorized as low, medium, or high-risk based on their
contract volume with AT, the region of business operation, and other relevant criteria.
Depending on the business partner’s risk level, an adequate due diligence process is
conducted using different sources of information. For suppliers identified as high-risk,
AT requires additional documentation regarding sustainability-linked topics, including
human rights. In addition to desk-based due diligence checks, our construction and
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operations managers are fulfilling their legal monitoring obligations during the
execution of the project according to the national law of the project location.
In cases where our HRDD identifies non-compliance, corrective action plans are issued
to suppliers, requiring them to address and rectify violations. Suppliers that fail to
comply are excluded from future business with Aroundtown. Ongoing monitoring and
assessment ensure that suppliers adhere to working conditions, wages, and health and
safety regulations.
Furthermore, to ensure that AT’s approach is in line with international guidance on
HRDD, which is also a requirement for alignment with the EU Taxonomy Regulation’s
social minimum safeguards, in particular on the topic of human rights, the Group has
implemented a six-step approach to HRDD:
1.
Embedding a commitment to HRDD within policies and procedures.
2.
Identifying and assessing adverse impacts across the value chain.
3.
Taking corrective actions to cease, prevent, mitigate, and remediate violations.
4.
Monitoring and tracking the effectiveness of implemented measures.
5.
Publicly communicating HRDD actions to ensure transparency.
6.
Providing and enabling grievance mechanisms for workers to report concerns.
In accordance with the guidance on the implementation of a HRDD procedure, two
criteria determine that compliance with the safeguards was established:
1.
That the Group has established adequate HRDD processes, as outlined in the
UNGPs and OECD Guidelines for Multi-national Enterprises.
2.
That there are no indications that the Group does not adequately implement
HRDD, resulting in human rights abuses.
Aroundtown fulfils these criteria.
Reporting via the Whistleblowing System
Should an incident reported via the Group’s whistleblowing system, or directly with
AT’s Compliance Department, involve a human rights violation, the Compliance
Department, with potential support from the Legal and HR Departments, oversees the
investigation in accordance with the Investigation Policy. Depending on the severity
of the case, potential actions include supplier warnings, financial penalties, contract
termination, or legal escalation – for a business partner or employee. AT may also
decide to consult with authorities if necessary.
Stated in the Group’s internal Whistleblower Policy, as far as the whistleblower can
be contacted by Aroundtown, the whistleblower will receive information about the
ongoing process, the progress of the investigation and outcome of the investigation,
incl. remedial action taken. This will happen no later than three months from the
date of acknowledgement of receipt of the report. In 2024, no cases of human rights
violations were reported. For further information, see the metrics table in S1-17.
In general, Aroundtown maintains open communication channels with value chain
workers regarding labor rights and ethical practices across its operations. This
engagement primarily occurs during the initial business relationship establishment,
where suppliers acknowledge Aroundtown standards and values as outlined in the BPCoC.
Zero-Tolerance Approach to Forced and Child Labor
Aroundtown enforces a zero-tolerance approach to human trafficking, forced and
compulsory labor, and child labor. These issues are explicitly addressed in the Human
Rights Policy, which covers all three topics and extends to value chain workers.
Additionally, AT’s BPCoC, which must be signed by suppliers and business partners
with contacts exceeding €5,000 explicitly prohibits child labor and compulsory labor.
It currently does not, however, make an explicit reference to trafficking in human
beings in its policies, given its limited relevance in the regions where AT operates.
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S2-4 – Taking Action on Material Impacts on Value Chain Workers,
and Approached to Managing Material Risks and Pursuing Material
Opportunities Related to Value Chain Workers, and Effectiveness of
These Actions
AT’s key actions to managing material impacts related to working conditions of value
chain workers, including secure employment, working time, adequate wages, and
health and safety are linked to the following four areas:
1. Supplier Engagement and Compliance:
Suppliers with contracts exceeding
€5,000 are required to sign the BPCoC, ensuring adherence to principles of fair
working conditions, secure employment, and occupational health and safety.
Also, suppliers are requested to re-affirm their adherence to the BPCoC with
every construction contract signed with Aroundtown.
2.
Human Rights Due Diligence Process:
Due diligence on high-risk suppliers allows
Aroundtown to identify potential human rights violations in the value chain. If
an issue is detected the Compliance Department determines necessary actions
to ensure that the supplier addresses, is addressing or will address the concerns
before continuing the business relationship.
3. Remediation and Grievance Mechanisms:
Aroundtown provides a grievance
mechanism i.e., a whistleblowing system, for value chain workers to report
violations and misconducts. Reported cases undergo thorough investigation,
which may lead to remedial actions against the stakeholder involved in of
human rights violation.
4. Human Rights Trainings for Employees:
All employees must complete annual
compliance training covering human rights, equal treatment and sexual
harassment, as well as other topics of ethical business conduct. This training
raises awareness among employees who play a key role in contracting compliant
suppliers and business partners aligned with AT’s values.
Aroundtown allocates targeted resources to support its action plans in managing the
material impacts identified by the DMA on value chain workers:
1. Dedicated Teams:
Our compliance, Know-Your-Business Partner Business Partner,
Operation and Construction teams collaborate to implement and enhance
existing processes. Aligning with national and international standards and
regulations, such as the German Supply Chain Act or the upcoming European
Corporate Sustainability Due Diligence Directive, allows Aroundtown to
continuously improve its alignment with best practices. Strengthening due
diligence procedures ensures that suppliers are thoroughly assessed, helping
prevent potential human rights violations before they occur.
2.
Technology and Tools:
Whereas the management of supply chain documentation is
still largely manual, initial updates have been made to the ERP system to enhance
documentation management. Aroundtown is currently reviewing supply chain
management tools for potential implementation. These improvements aim to
streamline communication and engagement with business partners regarding the
Group’s Human Rights Policy and standards, ultimately strengthening compliance
and reducing risks of workers’ rights violation.
Aroundtown’s key actions to manage material impacts on value chain workers extend
across its value chain and business relationships. The actions are part of the Group’s
ongoing operational activities and, therefore, do not have a defined completion date.
Implementation is continuous and integrated into the Group’s broader strategy.
In 2024, no severe human rights issues or incidents connected to workers in the value
chain were reported to AT.
Dedicated Resources
AT does not currently have the specific data available to provide this disclosure. The
allocation of financial resources to the action plan is part of the Group’s ongoing
operational activities, and this information is not tracked at the required level of
detail at this stage. AT continuously reviews and enhances its reporting processes to
improve transparency and provide further relevant disclosures where possible.
Beyond these described actions, which are focused on prevention, risk identification
and remediation, Aroundtown has currently taken no further actions or planned
future actions to specifically address the four material risks identified in relation
to working conditions or to deliver outcomes with positive impacts for the value
chain workers. The Group has currently not implemented further assessments or
monitoring in how far these actions are effective in delivering the intended outcome
for value chain workers.
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S2-5 – Targets Related to Managing Material Negative Impacts, Advancing
Positive Impacts, and Managing Material Risks and Opportunities
The targets support the purpose and goals of the Human Rights Policy and BPCoC,
supported by whistleblowing system by promoting ethical business practices and
mitigating risks in the supply chain. The long-term targets are both quantitative
as well as qualitative, focusing on compliance and ethical oversight rather than
numerical reductions.
The long-term targets address different aspects of the Group’s operations. The
first target, which focuses on preventing human rights violations, applies to the
supply chain and aims to ensure that business partners would adhere to ethical and
human rights standards. The second target, which concerns business partner scrutiny,
is focused on internal corporate governance and regulatory compliance. It involves
voluntarily aligning the Group’s policies with the German Supply Chain Act to strengthen
due diligence procedures and ethical oversight across the Group’s value chain.
The process for setting targets involves multiple levels of engagement across the
value chain. Aroundtown defines its targets based on internal assessments, regulatory
requirements, and stakeholder feedback. While direct engagement with workers in
the value chain or their representatives is currently not a formalized step; insights are
gathered through structured assessments such as the Business Partner Questionnaire.
This helps to evaluate suppliers and business partners on their adherence to ethical
and compliance standards. Please see ESRS 2 GOV-1 for more information.
The Group aims to maintain zero human rights violations in the supply chain referring
to the first reporting year, 2024, as the baseline year, and ensure thorough business
partner scrutiny by following best practices, including guidance on the German
Supply Chain Act which is currently not mandatory for Aroundtown, which a long-
term commitment to compliance.
Table 41
Long-term
Targets
2024 Targets
2024 Progress
2025 Targets
Maintain zero
human rights
violations in the
supply chain
Continue the distribution of
our new Business Partner
Questionnaire, which is
designed to assess and
ensure compliance with the
principles outlined in our
Business Partner Code of
Conduct
Launched
Business Partner
Compliance
Review Business
Partner Due
Diligence processes
for further
improvements
Maintain our
high standard of
business partner
scrutiny
Ensure the voluntary
alignment of our Group
policies with the Supply
Chain Act in Germany and
initiate possible changes to
ensure compliance
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ESRS S4 Consumers and End-Users
Introduction
Aroundtown recognizes tenant satisfaction as a cornerstone of its ESG strategy and
a critical driver of business success. As one of Europe’s leading real estate providers,
AT prioritizes fostering strong relationships with its tenants by providing accessible,
reliable, and high-quality services. Central to this commitment is the AT Service Center,
which operates 24/7 for regular queries and emergencies.
For the residential tenants of our subsidiary, GCP, this service is further enhanced
by the GCP Tenant App & Portal for desktop users, a digital platform that empowers
tenants to communicate directly with GCP, manage inquiries, and access self-service
options with ease. The app also provides updates on tenant-specific services, including
community events and an exclusive loyalty program.
AT’s Tenant Satisfaction Guidelines outline the Group’s approach to customer
engagement, ensuring all inquiries are handled with professionalism and care.
These efforts underscore AT’s dedication to fostering a positive and inclusive living
environment for all tenants. This section focuses on material impacts related to
tenant privacy and access to quality information. It highlights the implementation
of effective measures to protect tenant data through GDPR-compliant processes,
alongside collaboration with IT providers and contractors to uphold high standards
of information security.
The Group has established procedures to safeguard the confidentiality and integrity
of management information and data, encompassing both internal operation and the
protection of our consumers and end-users, i.e., our tenants and potential tenants
(*)
.
Furthermore, in alignment with the GDPR and its evolving requirements through
2024, the Group has implemented comprehensive measures, including mandatory
awareness training on GDPR.
IROs or datapoints that were identified as immaterial to AT are not covered in this report.
In some cases, Aroundtown makes use of the phase-in provisions (in accordance with
Appendix C of ESRS 1) and is committed to disclosing these datapoints in the coming years.
High-level overview of disclosure
Standard
Indicator
ESRS S4
Consumers
and End-users
S4. SBM-2 Interests and views of stakeholders
S4. SBM-3 – Material impacts, risks and opportunities and their
interaction with strategy and business model
S4-1 – Policies related to consumers and end-users
S4-2 – Processes for engaging with consumers and end-users about impacts
S4-3 – Processes to remediate negative impacts and channels for
consumers and end-users to raise concerns
S4-4 – Action plans and resources to manage its material impacts, risks,
and opportunities related to consumers and end-users
S4-5 – Targets set to manage material impacts, risks and opportunities
related to consumers and end-users
Table 42
Material sustainability matters covered in ESRS S4
Sub-topic
Sub-sub-
topic
Materiality
(impact/finan
-
cial/double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Informa-
tion-related
impacts for
consumers
and/or
end-users
Privacy
Double
Positive
Impact / Risk
Own
operations,
value chain
(downstream)
Short-term /
Long-term
Access to
(quality)
information
(*) When referring to consumers and end-users in this section, we refer to tenants and/or potential tenants of Aroundtown. However, to
follow the language of the ESRS, consumers and end-users is used interchangeably with tenants or potential tenants.
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S4. SBM-2 Interests and Views of Stakeholders
For more information on interests and views of stakeholders, including consumers
and end-users, please see ESRS 2 section SBM-2.
S.4 SBM-3 Material Impacts, Risks and Opportunities and their
Interaction with Strategy and Business Model
Inclusion of Consumers and End-Users in AT’s Sustainability Disclosures
Aroundtown includes all consumers and end-users who may be materially impacted by
its operations within the scope of disclosure under ESRS 2.
As a real estate company
with a diversified portfolio of residential and commercial properties, the Group considers
both residential tenants and commercial occupiers as primary end-users.
Types of Consumers and End-Users Affected by AT’s Operations
Aroundtown recognizes that its operations and value chain influence a broad range of
consumers and end-users. The three key impacted groups include:
y
Residential tenants, who engage with AT for housing and associated services.
y
Commercial occupiers, relying on property management services.
y
Prospective tenants, interacting with AT during application processes.
Material Negative Impacts on Tenants
Aroundtown has identified material negative impacts on consumers and end-users
related to privacy and access to quality information, as outlined in the DMA assessment.
y
Privacy risks: these risks are primarily associated with the processing of tenant
information in leasing, maintenance, and engagement activities. While no
widespread or systemic breaches have been identified, risks exist due to data handling
processes and potential vulnerabilities in information security. These risks are managed
through compliance with data protection regulations and internal safeguards.
y
Access to quality information risks: these risks relate to ensuring consumers and
end-users receive clear and accurate service-related information in topics such as
lease terms, maintenance procedures and tenant rights. While no systemic issues
have been reported, the Group actively addresses isolated cases through structured
communication channels and ongoing process improvements.
The Group has not identified any material impacts from its operations or value chain
on consumers or end-users concerning harmful products, services or issues that may
negatively affect freedom of expression, non-discrimination, health, or marketing impacts,
including those that could impact children and financially vulnerable individuals.
Activities With Positive Impacts on Tenants
Meanwhile, AT actively works to create positive impacts for tenants by enhancing
privacy safeguards and ensuing access to accurate information through:
y
Direct Operations: Tenant communication via digital platforms (apps, emails, Online
form), property management services, and customer support processes.
y
Value Chain: Partnerships with IT providers and service contractors ensuring secure
handling of tenant data and reliable information dissemination.
Understanding Consumer and End-User Risks and Opportunities
AT has identified key material risks, including unauthorized data disclosure, service
errors, and inadequate tenant education on their rights and available channels. The
Group mitigates these risks through:
y
GDPR-compliant data protection measures.
y
Tailored communication strategies for vulnerable groups, such as elderly tenants
and those with limited digital literacy.
y
A centralized customer relationship management system, designed to streamline
and enhance customer engagement by improving processes such as letting, tracking
leads, monitoring response times, and managing the status of customer requests
with greater efficiency.
Specific Groups of Consumers and End-Users
Aroundtown has identified risks to specific tenant groups, such as low-income and
digitally excluded individuals, through targeted surveys, feedback channels, and
property manager insights. To mitigate these risks and enhance tenant well-being,
AT implements tailored solutions, including alternative communication methods like
in-person support and physical documentation for those with limited digital literacy
or reliance on non-digital channels.
Engagement and Understanding of Specific Consumers and End-Users Groups
Aroundtown employs a multi-faceted approach to tenant engagement, incorporating
digital platforms, in-person events, and structured feedback mechanisms such as
surveys and complaint resolution processes.
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The Group has gained insights into how consumers and end-users with specific
characteristics, operating in particular contexts or engaging in certain activities,
may face heightened risk. This understanding has been developed through tenant
engagement, including targeted surveys, feedback channels, and insights gathered
from property managers. This approach enables Aroundtown to develop tailored
strategies for mitigating risks and enhancing tenant well-being.
The Group has identified specific risks to vulnerable groups, such as low-income
tenants and digitally excluded individuals, through targeted surveys and tenant
feedback. To address these risks, Aroundtown has implemented tailored solutions,
including alternative communication methods. Groups such as tenants with limited
digital literacy and elderly tenants reliant on physical documentation are particularly
vulnerable to privacy breaches or missing key updates. To support such cases, in-
person support and physical communication are used in place of digital channels.
S4-1 – Policies Related to Consumers and End-Users
Aroundtown has implemented comprehensive policies addressing tenant privacy and
information access. These are:
Aroundtown has established a clear framework of policies to uphold ethical business
practices, safeguard data privacy, promote transparency, and enhance tenant
satisfaction. These policies ensure alignment with global standards.
Key policies include:
y
Data Protection Policy – Defines governance structures for GDPR compliance,
ensuring the secure collection, storage, and processing of tenant data. It enforces
access controls, encryption protocols, and breach notification mechanisms to
uphold data security and privacy best practices. It applies to all consumers and end-
users whose personal data is processed by the Group, ensuring strict adherence to
GDPR and other relevant data security regulations.
y
Tenant Satisfaction Guidelines – Structure tenant engagement, service quality
monitoring, and satisfaction tracking. It defines key performance indicators (“KPIs”)
for response times, complaint resolution, and service improvement to enhance
tenant experience. It applies to all tenants throughout their tenancy, emphasizing
service excellence and continuous engagement.
For details on AT’s Business Partner Code of Conduct and Human Rights Policy, as well
as our Whistleblowing System please refer to section S2-1 in the report.
The Management Body and Chief Compliance Officer are responsible for overseeing
the implementation and enforcement of the Human Rights Policy and the BPCoC,
while the Chief Information Officer (“CIO”) is responsible for GDPR compliance, data
security governance, and IT risk management, ensuring protection of tenant data,
and the Chief Operations Officer (“COO”) of the German operations leads the Tenant
Satisfaction Guidelines, driving service excellence and tenant engagement initiatives.
Global Frameworks and Standards Informing AT Policies
Aroundtown aligns its policies with internationally recognized frameworks and best
practices to ensure regulatory compliance and operational excellence. The GDPR sets
principles for data privacy, security, and user rights protection, while ISO 27001 offers
structured approaches for data protection and cybersecurity risk management.
In line with these commitments, Aroundtown also prioritizes stringent data protection
and cybersecurity measures to safeguard tenant and corporate information. The GDPR
sets principles for data privacy, security, and user rights protection, while ISO 27001
offers structured approaches for data protection and cybersecurity risk management.
Our ISO 27001 certification for our Information Security Management System at our
headquarters in Berlin was maintained for a fourth consecutive year in 2024. The scope
Table 43
Policy Title
Short Description
Data Protection Policy
Establishes the governance of GDPR compliance. This policy covers
all consumers and end-users.
Business Partner Code
of Conduct (“BPCoC”)
Guide to managing business matters in an ethical way across the
value chain. It includes provisions on worker safety, fair working
conditions, and responsible employment practices. The BPCoC
explicitly prohibits child labor and forced labor and addresses
precarious work by requiring compliance with applicable labor laws.
Aligns with applicable ILO standards.
Tenant Satisfaction
Guidelines
The AT Tenant Satisfaction Guidelines sets out our management
approach to this key topic for each stage of the tenant lifecycle,
including pre-contract. The policy outlines how we monitor
satisfaction in order to understand performance, address any issues
and ensure the continuous improvement of our approach.
Human Rights Policy
Ensures respect for fundamental human rights, covering a right to a
safe work environment, fair remuneration (e.g., minimum wage) and
working conditions, and the right to privacy, rest, and leisure.
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of the certification applies to our head office, while the scope of the implementation
applies to all local and international offices where all relevant policies and procedures
apply in the same way. For operational reasons, all digital information flows through
Berlin, making this the most material location to focus our certification effects.
In 2024, Aroundtown reported zero incidents of non-compliance with Group policies
related to its consumers and end-users. These policies are based on the international
frameworks of the UN Guiding Principles on Business and Human Rights, ILO Declaration
on Fundamental Principles and Rights at Work, or OECD Guidelines for Multinational
Enterprises involving tenants or occupiers. For further details, refer to the issues and
incidents table in section S1-17 – Incidents, complaints, and severe human rights impacts.
S4-2 – Processes for Engaging with Consumers and End-Users
about Impacts
Tenant Engagement and Data Protection Practices
Aroundtown actively incorporates tenant perspectives into its decision-making
process through multiple engagement and communication channels. Tenants and
prospective tenants can contact AT through four different methods:
y
Email and postal services;
y
Our Service Center, which is available 24/7, in a variety of languages;
y
AT’s business chat via mobile phone or, for our residential tenants, also via the GCP
Tenant App;
y
In-person tenant consultations are offered by our property managers at property
locations on a regular basis.
To improve efficiency, the Service Center has introduced a voice bot to manage
peak call times, offering tenants an additional contact option. Additionally, for
our residential tenants, the GCP Tenant App & Portal facilitates communication,
providing tenants with direct access to customer service, community event updates,
and tenant-specific services. Tenant feedback, satisfaction surveys, and direct
interactions inform AT’s approach to managing privacy, information access, and
overall tenant experience. Callers to the Service Center are informed about AT’s data
privacy regulations at the beginning of each call and directed to further resources
on the Group’s website. While calls are not recorded, tenants can choose to accept
or decline monitoring for training purposes.
Aroundtown also prioritizes employee awareness regarding data protection. Regular
training sessions on GDPR compliance and data protection policies are provided to
Service Center and Property Management employees to ensure compliant behavior.
Beyond direct engagement, tenant representatives and property managers act as
intermediaries, ensuring that tenant concerns are promptly escalated and addressed.
This structured engagement approach enhances transparency, responsiveness, and
service excellence across AT’s operations.
Operational Oversight of Tenant Engagement
The COO holds the highest operational responsibility for tenant engagement,
ensuring that tenant feedback informs AT’s overall strategy and service improvements.
The Data Protection Officer (“DPO”) ensures that tenant interactions comply with data
privacy regulations, reinforcing AT’s commitment to GDPR compliance and ethical
data management.
Assessing Effectiveness of Tenant Engagement
The effectiveness of engagement with consumers and end-users is currently
monitored through our ticketing system, which tracks all tenant requests received via
Aroundtown’s various communication channels. This system allows the monitoring of
request types, the resolution process, and the response times. Reviews and internal
checks are conducted to further ensure transparency and accountability in handling
tenant concerns.
Following the resolution of a request/enquiry through the Service Center, a survey
is sent to the relevant tenant. This survey assesses AT’s performance in key areas,
including friendliness, reachability, quality of work and resolution time.
Insights from Particularly Vulnerable Consumers and End-Users
Aroundtown has identified certain tenant groups, such as elderly residential
tenants and those with limited digital literacy, who may face challenges in
accessing information and safeguarding their privacy. To support these tenants, AT
has implemented tailored solutions, including alternative communication methods
such as physical documentation and in-person service, as well as dedicated support
channels.
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S4-3 – Processes to Remediate Negative Impacts and Channels for
Consumers and End-Users to Raise Concerns
Remediation and Management of Material Impacts on Consumers and
End-Users
Aroundtown is committed to ensuring that all material negative impacts on tenants
related to privacy and access to quality information are remediated effectively. The
Group has a structured approach to identifying, assessing, and addressing these
issues through governance structures and policies aligned with GDPR compliance
and tenant engagement strategies. When material negative impacts are identified, the
Group takes immediate corrective action, including strengthening security controls,
enhancing tenant communication, and reinforcing internal training programs as
described in S4-2.
Channels for Raising Concerns and Support Access
Aroundtown provides multiple channels through which tenants can raise concerns,
as outlined in S4-2 – Prcesses for Engaging with Consumers and End-users about
Impacts.
To ensure the effectiveness of these engagement channels, reported concerns are
integrated into AT’s Ticketing System, where they are systematically tracked and
addressed. Regular performance evaluations assess response times, resolution
efficiency, and tenant satisfaction levels. Investments in digital platforms further
improve accessibility, and ongoing customer service training ensures that tenant
concerns are handled professionally and efficiently. The Group continuously reviews
the effectiveness of its engagement channels through internal audits and performance
tracking.
Additionally, AT’s external and anonymous whistleblowing system is also accessible
to our tenants, who can report concerns confidentially and without fear of retaliation.
The Group’s internal Whistleblowing Policy safeguards tenants and stakeholders
who report concerns, guaranteeing confidentiality and protection against retaliation.
An independent third-party platform allows for anonymous reporting, ensuring
transparency and ethical governance. This policy is reinforced through employee
training programs, which emphasize ethical conduct and consumer protection.
Tenant Awareness and Trust in Engagement Processes
Aroundtown evaluates tenant awareness and trust in its reporting structures through
multiple methods. Tenant feedback surveys, issued after interactions with the Service
Center, measure awareness of available support channels and the effectiveness of
issue resolution. Direct engagement at community events provides further insights
into tenants’ experiences with raising concerns. Additionally, usage data from the
GCP Tenant App & Portal is monitored to assess accessibility and adoption. These
assessments inform ongoing improvements, ensuring that all tenants are aware of
and trust the available reporting mechanisms.
S4-4 – Taking Action on Material Impacts on Consumers and End-
Users, and Approaches to Managing Material Risks and Pursuing
Material Opportunities Related to Consumers and End-Users, and
Effectiveness of those Actions
Managing Risks and Opportunities Related to Consumers and End-Users
Aroundtown employs a structured approach to managing material risks and
opportunities related to privacy and information access. The Group collaborates
with the DPO and cybersecurity experts to ensure GDPR compliance, enhance tenant
engagement, and secure IT systems. The Information Security and Privacy Strategy
is spearheaded by in-house cybersecurity leads, who participate in board-level Risk
Committee meetings to integrate data security considerations into corporate risk
management.
The core principles of AT’s Information Security Management System include
confidentiality, integrity, availability, and security. Measures include data encryption,
access controls, system resilience against cyber threats, and strict personal data
protection protocols. Regulatory compliance, particularly with GDPR, is a priority, and
employees undergo continuous training to reinforce awareness and best practices in
data protection.
To maintain high security standards, all documents within Aroundtown are labelled
with an information security classification, with restricted files requiring password
protection. Staff members sign a commitment to data protection upon joining the
Group and are required to complete annual video-based training modules. In 2024,
the Group introduced a cybersecurity awareness initiative, including an interactive
“Information Security Escape Room” as part of its Awareness Days.
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Aroundtown employs the following measures to mitigate potential negative impacts:
y
Data Protection Measures:
Continuous updates to GDPR-compliant data handling
protocols to prevent breaches and unauthorized disclosures.
y
Service Quality Improvements:
Improvements to the tenant app provide easy access
to accurate, and timely information, complemented by 24/7 support through the
Service Center.
y
Training Programs:
Regular employee training sessions on secure tenant data
handling further reinforce preventive measures and promote best practices.
Key Actions to Address Material Impacts on Consumers and End-Users
Aroundtown’s actions in relation to managing its material impacts, risks and
opportunities related to consumers and end-users are outlined below. The scope
of these initiatives covers all tenant interactions related to data, from rental
agreements to service requests, across the Group’s entire portfolio. As these actions
are an integral part of AT’s operational framework, they do not have a fixed time
horizon but are continuously developed and refined.
Table 44
Material impacts, risks, and opportunities in ESRS S4
Topic
Sub-topic
Key action
Information-
related impacts
for consumers/
or end-user
Privacy
•
Data Protection Policy: Ensures compliance with GDPR and
other data privacy laws, emphasizing safeguarding tenant,
employee, and business data.
•
Implementation of Privileged Access Management System,
which
enforces
multi-factor
authentication,
session
recording, and access approval for external IT service
providers to prevent unauthorized access to tenant data.
•
To ensure adequate security in our processes for saving
and sharing information, all documents are labelled
with an information security classification, from public
to restricted, which requires password protection for the
document, where applicable.
•
Encryption of sensitive tenant information to protect
against unauthorized disclosure.
•
Continuous training for employees in handling tenant data.
Access to
(quality)
information
•
Providing clear communication channels such as through
the 24/7 Service Center and the app for our residential
tenants, the GCP Tenant App.
•
Community engagement through property managers
and neighborhood meetings, ensuring that residents are
informed about ongoing projects.
•
Continuous development of tenant engagement platforms,
including a feedback mechanism integrated into AT’s
centralized ticketing system.
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Resources Allocated to Key Actions
The allocation of financial resources to the action plan is part of the Group’s ongoing
operational activities, and this information is not tracked at the required level of detail
at this stage. The Group continuously reviews and enhances its reporting processes to
improve transparency and provide further relevant disclosures where possible.
Remedies for Material Impacts
Aroundtown takes every data protection and security incident with the utmost
seriousness. Whenever a potential breach or data protection issue is reported, the
data protection team is tasked to assess the situation. This team conducts a risk
analysis to determine the root cause, evaluate any potential impact, and implement
corrective measures to prevent recurrence.
Aroundtown’s approach is proactive and solution oriented. Even in cases where
no material impact is identified, the incident is analyzed to identify underlying
susceptibilities and to enhance the security and compliance posture. These learnings
are systematically integrated into our policies, processes, and awareness initiatives to
strengthen the overall data protection framework.
Collaboration with management, department heads and team leaders are a key
aspect of the remediation efforts. An active engagement in the resolution process
is important, ensuring that the necessary security improvements are implemented
effectively within their teams. This collaborative approach not only enhances
security awareness but also fosters a culture of continuous improvement and shared
responsibility across the organization.
Furthermore, transparent communication is prioritized to promote security and data
protection awareness at all levels. For example, data protection and security best
practices were recently highlighted in the organization wide HR newsletter, further
embedding a strong security mindset. By taking immediate action, conducting root
cause analyses, and continuously improving the security measures, data privacy and
security are turned into an essential part at the core of our operational integrity.
Enhancing Consumer and End-User Experience
Aroundtown seeks to create positive tenant experiences through digital innovation
and tenant engagement initiatives. Hybrid community events and interactive surveys
foster trust and transparency, while investments in secure, user-friendly platforms
provide easy access to tenancy information, maintenance updates, and privacy policies.
The GCP Loyalty Program offers additional benefits, including shopping discounts for
new tenants and loyalty points that can be exchanged for vouchers or rent reductions.
Partnerships with companies like Vodafone, O2, and Media Markt provide tenants with
exclusive offers, while sustainability incentives encourage tenants to earn points for
switching to renewable energy providers.
AT measures the success of its engagement initiatives through multiple feedback
mechanisms. The 24/7 Service Center is committed to responding to general tenant
queries within 24 hours and urgent requests within one hour. The GCP Tenant App
facilitates real-time service requests and feedback collection, with ongoing updates
improving accessibility and user experience.
Regular community events provide opportunities for direct interaction with property
managers, offering insight into tenant satisfaction levels. Interactive surveys play a
crucial role in gathering tenant opinions, while the grievance mechanism ensures
tenants can report concerns confidentially. These channels support ongoing
monitoring, allowing AT to refine its initiatives and enhance service quality.
Identifying Appropriate Actions for Managing Material Risks
Aroundtown identifies necessary actions through risk assessments, stakeholder
engagement, and incident learnings. Annual evaluations of privacy risks involve
scenario analysis and input from IT, compliance teams, and tenant representatives.
Tenant surveys and feedback loops are systematically analyzed to identify areas for
improvement. Post-incident reviews ensure that mitigation strategies are continuously
refined, while vendor due diligence ensures that all third-party service providers meet
security and compliance standards.
When addressing specific material impacts, AT follows structured response protocols.
In the event of a data breach, immediate containment and mitigation measures
are activated. Proactive communication with tenants ensures early identification of
systemic risks, while ongoing security assessments and employee training strengthen
the Group’s ability to prevent recurrence.
Ensuring Effective Remediation Processes
Aroundtown’s remediation processes are designed to be accessible, transparent, and
continuously improving. Tenants can report concerns through multiple channels,
including the Service Center, tenant app, and direct engagement with property
managers. Feedback loops track the effectiveness of remedial actions, while insights
from each incident inform policy refinements and security enhancements.
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Regular testing and simulations, such as security drills and breach response exercises,
assess the efficiency of escalation procedures. Independent oversight by the Data
Protection Officer ensures compliance with GDPR and ISO 27001, with findings used
to strengthen security protocols and governance frameworks.
Mitigating Risks and Pursuing Material Opportunities
Aroundtown mitigates risks related to tenant dependencies by integrating financial
risk management, tenant engagement, regulatory compliance, and ESG initiatives. By
diversifying the tenant mix across office, retail and residential sectors, AT minimizes
over-reliance on any single industry while enhancing stability through communication
channels and ongoing service improvements.
Regulatory compliance is maintained through proactive monitoring of housing laws,
rent controls, and safety regulations. Fair housing practices and strict health and
safety protocols are upheld, minimizing legal exposure. These measured through
compliance audits, incident reports, and litigation records.
Finally, ESG and community initiatives strengthen long-term tenant relationships
and market positioning. Investing in green building certifications, energy-efficient
upgrades, and social responsibility programs not only enhances sustainability but
also attracts ESG-focused investors and tenants. The impact of these efforts is
tracked via energy efficiency ratings, ESG rating agency performance, and community
engagement feedback.
Looking ahead to 2025, Aroundtown plans to integrate responsible Artificial
Intelligence (“AI”) technologies to enhance service delivery and operational
efficiency. Employees will receive targeted training on responsible AI use, data
privacy, and ethical decision-making. AI governance frameworks will be embedded
into AT’s regulatory compliance strategy to safeguard tenant data and uphold
consumer protection standards.
Ensuring Responsible Business Practices
Aroundtown ensures that its business practices do not cause or contribute to material
negative impacts by adhering to GDPR and maintaining strict data handling protocols.
Regular training and audits reinforce compliance and mitigate potential risks. As of
2024, no severe human rights issues or incidents related to consumers and end-users
have been reported.
Resources allocated to managing material impacts include dedicated personnel,
financial investments, and technological infrastructure. The Data Protection Officer
and tenant engagement teams oversee compliance and service quality, while IT
infrastructure investments support cybersecurity initiatives. A centralized ticketing
system ensures efficient tracking and resolution of tenant concerns.
The following resources have been allocated:
Table 45
Resource Type
Description
Resource Allocation
Personnel
Includes dedicated roles
responsible for managing
material impacts
Dedicated roles such as the Data
Protection Officer and tenant
engagement teams
Financial
Investment
Covers budgets allocated
to support operational and
compliance-related initiatives
Budgets allocated for IT
infrastructure, employee training,
and tenant satisfaction surveys
Systems
Refers to the technological
infrastructure used to manage
material impacts effectively
Centralized ticketing and tracking
system to manage and resolve
tenant concerns
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S4-5 – Targets Set to Manage Material Impacts, Risks and
Opportunities related to Consumers and End-users
Targets
Target Setting and Consumer Engagement in Performance Management
Aroundtown’s targets are designed to align with its key policies. These targets ensure
compliance with GDPR, cybersecurity resilience, ethical governance, and tenant
engagement. By embedding these objectives into its operational framework, AT
establishes a strong foundation for data protection, ethical business practices, and
transparent consumer interactions.
The Group has defined one measurable target—the successful recertification of ISO
27001. This ensures that the Group continues to uphold internationally recognized
information security standards. In addition to this, AT has set two qualitative targets
focused on building a cybersecurity-aware culture among employees and continuously
improving digital security systems.
Scope and Baseline of Targets
The Group’s long-term targets encompass key aspects of cybersecurity and risk
management. The first target focuses on proactively identifying risks to detect and
mitigate weaknesses before they become threats. This includes maintaining ISO
27001 certification through regular recertification audits. The second target aims to
foster a culture of cybersecurity awareness and vigilance among employees through
consistent training and engagement initiatives. The third target is dedicated to the
continuous improvement of digital security systems.
The Group defines its targets based on internal assessments, regulatory requirements,
and stakeholder feedback. For further details on stakeholder engagement in the
target-setting process, refer to ESRS 2 GOV-1 – The Role of the Administrative,
Management and Supervisory Bodies. The baseline for these targets is the successful
annual recertification of ISO 27001, with 2024 as the initial baseline year.
Timeframe and Progress Monitoring
The targets apply to 2024 and beyond, reflecting AT’s long-term commitment to
cybersecurity and consumer protection. Specific milestones and interim targets for
2025 are outlined in the relevant tracking framework.
Consumer and End-User Engagement in Target Setting and Performance
Monitoring
While tenants are not directly involved in setting formal targets, AT gathers tenant
insights through various engagement channels, including satisfaction surveys,
property manager interactions, tenant events, the Service Center, and digital feedback
Table 46
Long-term
Targets
2024 Targets
2024 Progress
2025 Targets
Identify risks
proactively,
to detect and
eliminate
weaknesses
before they can
become threats
Pass our
recertification
audits for ISO
27001
The ISO27001 certification
was successfully passed
Pass our
recertification
audits for ISO
27001
Embed a culture
of awareness
and vigilance
throughout our
staff, through
consistent and
regular training
Introduce a
new “on the job”
learning format
aimed at making
information
security more
accessible by
e.g., rolling out
awareness
•
Roll-up Posters were put
up in Branches and HQ
•
Phishing Campaigns (via
email) were pursued
•
Shared regular
Information Security
Communications via
E-Mail
Continuously
promote cyber
security on all
different levels by
introducing security
champions across
various departments,
locations, and
verticals
Pursue continual
improvement
of the security
of our digital
systems
Pursue continual
improvement of
the security of our
digital systems
A special bug bounty
program was introduced
for all our external facing
assets.
Internal assessments on
core applications were
conducted, including (but
not limited to) core financial
systems, e-mail and identity,
servers and more
Remains the same
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mechanisms. These inputs play a crucial role in shaping AT’s service improvements
and operational adjustments.
Tracking Performance Against Targets with Consumer Input
Tenants contribute to tracking AT’s performance through post-resolution surveys that
evaluate the effectiveness of issue resolution and customer support. Additionally,
interactive feedback channels integrated into the GCP Tenant App provide real-
time insights into tenant satisfaction. However, for the reporting year 2024, post-
resolution surveys were not conducted.
Consumer Input on Lessons Learned and Service Improvements
Aroundtown has fully adopted targets for managing material impacts related to tenant
privacy and access to quality information. These targets are regularly monitored,
documented, and aligned with the Group’s broader ESG goals. While tenants provide
feedback on service improvements, the formal target-setting and evaluation
framework remains driven by internal assessments and compliance requirements.
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Governance Information
G1 Business Conduct
Introduction
Aroundtown places strong emphasis on corporate governance, executed responsibly by
the Board of Directors, the Risk and Audit committees of the Board, and the Management
Body, as well as senior management, including department heads. The Group takes
pride in the high levels of investors’ confidence reflected in the successful placement
of funds by major global investment banks. Among its shareholders and bondholders
are leading international institutional investors, as well as major global investment and
sovereign funds.
AT’s governance framework is guided by international standards, including the OECD
Guidelines for Multinational Enterprises and the UN Guiding Principles on Business
and Human Rights. These standards shape the Group’s policies, which include the
Code of Conduct for Employees, the Business Partner Code of Conduct (“BPCoC”), the
Whistleblowing Policy, the Human Rights Policy and more. AT’s policies are designed to
foster a culture of compliance, ethical behavior, and inclusivity across its operations and
value chain. In 2024, these principles were reinforced through an enhanced compliance
monitoring system, policy updates, and targeted employee training programs.
Aroundtown is not subject to any mandatory corporate governance code or statutory
legal provisions. Specifically, the Group is not required to comply with the ‘Ten
Principles of Corporate Governance’ established by the Luxembourg Stock Exchange
or the German Corporate Governance Code, which primarily apply to listed companies
incorporated in Germany. However, AT adheres to recommendations C.10 (pertaining
to the Chair of the Audit Committee), D.8, and D.9 of the German Corporate Governance
Code. Aroundtown has issued a declaration confirming its compliance with these
specific recommendations. In general, Aroundtown already aligns with many of
the principles and continues to integrate ESG best practices across its operations.
These efforts are aligned with the United Nations Sustainable Development Goals
(UN SDGs), particularly Goal 16 (Peace, Justice, and Strong Institutions) and Goal 17
(Partnerships for the Goals).
High-level overview of disclosure
Standard
Indicator
ESRS G1
Business
Conduct
G1. GOV-1 – The role of the administrative, management and supervisory bodies
G1-1– Business conduct policies and corporate culture
G1-2 – Management of relationships with suppliers
G1-3 – Prevention and detection of corruption and bribery
G1-4 – Incidents of corruption or bribery
G1-6 – Payment practices
Aroundtown is a founding member of the United Nations Global Compact (UNGC) Network
Germany, one of the largest corporate sustainability initiatives, signaling the Group’s
commitment to strong corporate governance through adherence to the UNGC Ten Principles.
To ensure alignment with ESRS G1 requirements, AT actively integrates stakeholder
feedback into governance processes. Through structured engagement mechanisms,
such as tenant surveys, employee feedback channels, and investor meetings, the Group
remains responsive to the evolving needs of its diverse stakeholder base. In 2024, this
engagement informed several governance enhancements, including updates to the
BPCoC and the improvement of the whistleblowing channels.
IROs or datapoints that were identified as immaterial to Aroundtown are not covered
in this report. In some cases, AT makes use of the phase-in provisions (in accordance
with Appendix C of ESRS 1) and is committed to disclosing these datapoints in the
coming years.
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Table 47
Material sustainability matters covered in ESRS G1
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorization
of IRO
Localization
of IRO
Time horizon
of IRO
Corporate
culture
Double
Positive
Impact/
Risk/
Opportunity
Own
operations
Short-term /
Long-term
Protection of
whistle-
blowers
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Management
of relation
-
ships with
suppliers
including
payment
practices
Double
Positive
Impact/
Risk
Value chain
(upstream)
Short-term /
Long-term
Corruption
and bribery
Prevention
and
detection
including
training
Double
Positive
Impact/
Risk
Own
operations
Short-term /
Long-term
Incidents
Double
Positive
Impact/
Risk
Own
operations
Short-term /
Long-term
Investor
relations
(*)
Access to
capital
Double
Positive and
negative
Impact / Risk /
Opportunity
Own
operations
and Value
chain
(upstream)
Short-term /
Long-term
Reputation
Impact
Positive and
negative
Impact
Own
operations
and Value
chain
(upstream)
Short-term /
Long-term
G1. GOV-1 – The Role of the Administrative, Management and
Supervisory Bodies
Aroundtown’s business strategy is underpinned by its fundamental commitment to
ethical business conduct, strong corporate governance and high levels of transparency.
Safeguarding the Group from any reputational damage due to error or misconduct
is essential in maintaining its strong reputation. The Group’s compliance framework
seeks to embed principles of integrity, respect, performance, accountability, and
sustainability into all of its business activities. AT ensures its Board of Directors and
senior executives hold vast experience and skillsets in relevant business areas, in
order to help maintain the Group’s high governance standards.
The Board of Directors makes decisions in AT’s best interest, independently of any
conflict of interest. On a regular basis, the Board evaluates the effective fulfilment of
their remit and compliance with corporate governance procedures related to business
conduct implemented by the Group.
Aroundtown has established an Advisory Board. The Advisory Board and its members
are an important source of guidance when making decisions. The Management
Body also serves a role in the day-to-day implementation of Aroundtown’s ethical
business conduct across all levels of the Group and working with the Board as
well as the Audit and Risk committees to identify solutions if issues have been
identified. There is a strong collaboration with senior management, especially heads
of departments, in relation to communication of and adherence with the Group’s
compliance framework.
The Board of Directors has established an Audit Committee in order to maintain high
corporate governance and transparency standards as well as to provide guidance to
the Board in fulfilling the Board’s responsibilities to the Group and its shareholders
regarding the integrity of the accounting and financial process, internal control and risk
management. In addition, and with the same objective, the Board has also established
a Risk Committee to monitor the effectiveness and adequacy of the internal control
system and risk management system.
Overall, outstanding leadership is crucial in this regard. Our directors and
managers are expected to be examples of our core values of mutual respect and
clear communication. This standard of behavior usually shows positive effects on
our commercial success, as well as on staff performance. We maintain a horizontal
organizational structure, with a widespread culture of transparent and regular
feedback between employees and managers. Furthermore, our Employee Code of
Conduct establishes expectations for all staff to abide by the values of openness,
(*) entity-specific sub-topic
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trust, teamwork, and acceptance of diversity in all their dealings with one another
and with our tenants and other stakeholders. Adherence to the Code of Conduct for
Employees is a mandatory requirement of all employee contracts.
As mentioned above, Aroundtown ensures that its Board of Directors and senior
executives hold vast experience and skillsets in relevant business areas, in order
to help maintain the Group’s high governance standards. In 2024, AT provided two
trainings on Information Security and Capital Markets (in particular, the EU Market
Abuse Regulation) to its members of the Board of Directors. We provide a detailed
overview of the expertise of the members of the Management Body and also the
Board of Directors in section ESRS 2 GOV-1 of this report.
G1-1– Business Conduct Policies and Corporate Culture
Corporate Culture on Ethical Business Conduct
Aroundtown’s corporate culture is guided by strong governance, ethical business
practices, and transparency. The Board of Directors and Management Body regularly
discuss corporate culture, focusing on compliance, integrity, and stakeholder
accountability. Key themes, including anti-corruption, and ethical conduct, are
embedded in the Group’s policies and reinforced through mandatory training.
Through campaigns such as the Awareness Days in 2024, where the Information Security,
Compliance, and Sustainability and HR departments organized a data security-themed
escape room, compliance and ESG quizzes and other activities to raise awareness with
the Group’s employees on these important topics, AT fosters a corporate culture of
active engagement, including on Compliance.
Aroundtown evaluates employees’ opinions on corporate culture as part of its
employee satisfaction surveys, as well as through direct communication channels
between the Compliance Department and others and employees.
Reporting Mechanisms for Unlawful Behavior
Aroundtown has established structured mechanisms for identifying, reporting, and
investigating concerns related to unlawful behaviour or violations of its Code of
Conduct. The Group’s whistleblowing system includes a confidential and anonymous
reporting channel managed by an external service provider which is accessible to both
internal and external stakeholders, including employees, business partners, and tenants.
Concerns regarding potential violations of its Codes of Conduct, whether for
employees or business partner, may be reported through various channels as specified
in the Whistleblowing Policy. This includes the previously mentioned dedicated
digital platforms and indirect communication with the Compliance department
through various channels. Reports made via the whistleblowing system are reviewed
and investigated by the Compliance Department, which operates independently to
ensure objectivity and adherence to established protocols. Investigations follow an
Investigation Policy, with potential outcomes including disciplinary measures, contract
terminations, or legal action where necessary. To promote awareness and accessibility,
AT integrates information about its whistleblowing system into onboarding programs
and annual compliance refresher trainings, ensuring that all stakeholders are informed
about reporting mechanisms and protection from retaliation.
Aroundtown’s Compliance Framework
Aroundtown recognizes that strong governance and corporate integrity are essential
for mitigating risks related to corruption and bribery while strengthening investor
confidence. To manage its material impacts, risks, and opportunities, The Group has
established a comprehensive framework of business conduct policies that promote
compliance, ethical business conduct and accountability. AT’s governance policies are
designed to mitigate risks, enhance transparency, and uphold ethical standards across
the operations and value chain. These are:
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Table 48
Policy Name
Description
Business
Partners Code
of Conduct
The BPCoC sets ethical standards for AT’s business partners, emphasizing
adherence to legal, social, and environmental standards. It prohibits corruption,
bribery, child labor, and forced labor, and ensures compliance with data protection
and fair competition laws.
Employee Code
of Conduct
Establishes expectations for all staff to abide by the values of openness, trust,
teamwork, and acceptance of diversity in all their dealings with one another
and with our tenants and other stakeholders. It addresses discrimination, insider
trading, and misconduct while mandating training to ensure compliance with EU
regulations and internal standards.
Whistleblowing
Policy
Provides mechanisms for confidential reporting of misconduct, ensuring protection
from retaliation. The whistleblowing system includes a channel provided by
the leading BKMS digital system, which allows internal and external parties to
report legal and ethical misconduct. All reports are handled confidentially by the
compliance team under strict protocols.
Anti-Corruption
Policy
Outlines measures to prevent, detect, and address corruption and bribery. The policy
includes mandatory training for employees and suppliers, clear reporting mechanisms,
and disciplinary measures for violations. It aligns with the UN Convention against
Corruption.
Data Protection
Policy
Ensures compliance with GDPR and other data privacy laws, emphasizing
safeguarding tenant, employee, and business data. It mandates secure data
handling, staff training, and effective IT systems to prevent breaches and
unauthorized access.
Human Rights
Policy
Commits to upholding international human rights standards across the
Group’s operations and supply chain. It includes measures to prevent human
rights violations, assess supply chain risks, and enforce corrective actions to
address identified issues.
Anti-
Discrimination
Policy
Prohibits all forms of discrimination while promoting equal treatment and
diversity. It supports inclusive practices, such as mentoring programs and
flexible work arrangements, and aligns closely with the Diversity Policy.
Diversity Policy
Promotes an inclusive workplace by implementing cultural diversity programs
and career development initiatives. It ensures fair representation and supports
marginalized and underrepresented groups within the workforce.
Procurement
Policy
Provides clear guidance in the procurement process, ensuring suppliers meet
legal, environmental, and social responsibilities. In line with the Code of
Conduct for Business Partners, it emphasizes transparency, fair competition,
sustainability, and risk management, fostering long-term, responsible
partnerships.
Occupational
Health and
Safety Policy
Ensures a safe working environment by identifying and managing risks,
providing staff training, and adhering to safety regulations. Procurement
decisions must be free from conflicts of interest and based on objective
criteria like price, quality, and expertise. Employees are encouraged to report
safety concerns through clear channels.
Investigation
Policy
Describes clear steps of the investigation process should any issue of concern
be reported, incl. cooperation with external authorities and the assurance of
the protection of the whistleblower.
Supporting these policies is also the Global Information Security Policy. Aroundtown
is also a signatory of the
Charta der Vielfalt
(German Diversity Charter). For more
information on our anti-discrimination efforts, please refer to the section ESRS S1 “Own
workforce”. Another crucial subject in our compliance program is the management of
ethical standards in our supply chain as described in the section ESRS S2 “Workers in
the Value Chain”.
Policy Scope and Applicability
The scope of Aroundtown’s business conduct and corporate culture policies extends
across all levels of operations, ensuring compliance for employees, suppliers, business
partners, and contractors.
y
Employee Code of Conduct, Diversity Policy, Anti-Discrimination Policy, Anti-
Corruption Policy, Whistleblowing Policy, Procurement Policy, and Human Rights
Policy apply to all employees, executives, and board members.
y
Business Partner Code of Conduct, Procurement Policy, and Human Rights Policy cover
suppliers, contractors, and external business partners, setting clear expectations
towards them.
y
Data Protection Policy and Occupational Health & Safety Policy ensure compliance with
GDPR, workplace safety laws, and industry best practices and apply to all employees.
Governance and Oversight
The Board of Directors is responsible for ultimate oversight, ensuring that business
conduct policies align with Aroundtown’s corporate values, regulatory obligations,
and long-term strategic goals. The internal controls and compliance of the Group are
supervised by the Risk and Audit committees and are supported by the Management
Body and the Chief Compliance Officer
as well as other heads of departments, who
work on the implementation and enforcement of anti-corruption, whistleblowing, and
governance policies.
Alignment with Global Standards
Aroundtown strives to ensure that its policies align with globally recognized anti-
corruption, business ethics, and human rights standards, ensuring best-in-class
compliance and risk management.
Key frameworks and initiatives include:
y
United Nations Convention Against Corruption (“UNCAC”) – Governing anti-bribery,
fraud prevention, and corporate integrity measures.
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y
General Data Protection Regulation (“GDPR”) – Ensuring data privacy, security, and
regulatory compliance.
y
OECD Guidelines for Multinational Enterprises – Defining ethical corporate
governance and responsible business conduct.
y
International Labor Organization (“ILO”) Core Conventions – Establishing protections
against child labor, forced labor, and workplace discrimination.
y
UN Global Compact Principles – Reinforcing corporate commitments to anti-
corruption, labor rights, and sustainability.
Safeguards for Whistleblowers
Aroundtown takes its legal obligations regarding the protection of whistleblowers and its
duty of care as an employer very seriously. The Group views every whistleblower as a valuable
source of information regarding possible internal legal violations. The Whistleblowing Policy
clearly states that “an employee who exposes a whistleblower or otherwise retaliates against
the whistleblower for their reports […] may face sanctions under employment law.” Therefore,
no whistleblower should fear retaliation or similar for the conduct that they reported.
The Whistleblowing Policy provides a secure and confidential platform for employees,
tenants, and partners to make reports. Among the possible reporting channels listed in the
Whistleblowing Policy, one channel, the whistleblowing system is operated by an external
service which ensures, enabling full anonymity, and therefore protection from possible
retaliation. The Group’s intranet and publicly available website feature a dedicated page
on our breach reporting and whistleblowing process, providing direct access to one
channel of the Group’s whistleblowing system. This ensures that employees and external
stakeholders are informed and can easily access the platform. Additionally, training on
the whistleblowing system is included in our Welcome Days program for new employees.
All reports are managed through a structured process overseen by the Compliance
Department, ensuring thorough investigation and resolution. In 2024, the
whistleblowing system was enhanced with multilingual support and anonymous
online reporting, reflecting feedback from employee and stakeholder surveys.
Reports submitted through the online platform of the whistleblowing system or
other channels (such as phone calls or emails to the Compliance or HR departments)
are tracked and investigated by the Group’s Compliance Department. The internal
investigation procedure for handling potential violations is outlined in our Investigation
Policy. If a claim is confirmed, the accused employee or business partner may receive
a warning, be fined, or be banned from further business with the Group. AT may also
decide to consult with authorities if necessary.
Strengthening our Governance Practices
The Group uses an online learning platform to provide training on a wide range of
topics related to business conduct. In line with the Group’s corporate culture of acting
responsibly and in accordance with ethical values and standards outlined in AT’s
corporate policies, regular training ensures continuous awareness of the importance
of this topic. The intranet platform provides links to our e-learning platform, offering
training on anti-corruption, anti-bribery and anti-money laundering, human rights
and non-discrimination, as well as data protection topics. This continual training and
communication ensure that our standards are consistently reinforced. Compliance
trainings through the e-learning platform are included in our Welcome Days for
new employees, along with training on the use of the whistleblowing platform.
Furthermore, employees are required to complete annual refresher trainings on these
policies, to reaffirm their commitment to maintaining these standards.
Typically, in a real estate business such as AT’s, functions that are most at risk of
corruption and bribery are those relating to business development, construction
and transactions. Due to these functions’ contact with authorities, developers and
construction companies, as well as large land and real estate owners and brokers,
could be subject to higher corruption and bribery risk. At Aroundtown, all of these
functions – as do all other functions – receive training on the subject matters and
abide to the same policies and standards.
G1-2 – Management of Relationships with Suppliers
To uphold our commitment to responsible business practices and mitigate risks
associated with our supply chain, AT implements a structured approach to supplier
oversight and due diligence.
Business Partner Code of Conduct and Human Rights Due Diligence
Firstly, our BPCoC is mandatory for all business partners with contracts above €5,000,
except for large corporations, which have their own codes of conduct – provided that
they are in line with the Group’s standards - or those business partners operating
in heavily regulated sectors. The BPCoC includes AT’s expectation of its suppliers
to observe all applicable environmental, health and safety regulations in their
operations, as well as adherence to international human rights law and frameworks.
Secondly, with a view of potential human rights violations in the supply chain,
Aroundtown conducts a human rights due diligence procedure on high-risk suppliers.
Taking into account adverse impacts on human rights in the Group’s materiality
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Construction and Operations departments. If issues are identified during the
process relating to human rights or other social matters, or environmental topics,
Aroundtown very carefully evaluates its business relationship with this concerned
partner and may consider a termination of the relationship or contract. Further
information is provided in section S2-1.
3. Evaluation Methods:
AT project managers oversee construction projects, engage
directly with contractors, and conduct site visits to assess compliance with
environmental and health and safety standards. A Business Partner Questionnaire
is used to verify adherence to the Group’s standards.
4. Environmental data delivery:
With our construction contract templates,
Aroundtown requests suppliers to collaborate on collection for environmental
data, in particular on the delivery of recycling data during construction projects,
a confirmation of non-usage of prohibited chemical substances to prevent
pollution and to provide documentation on efficient water appliances installed.
With these contractual provisions, AT encourages supplier transparency and
environmental action.
G1-3 – Prevention and Detection of Corruption and Bribery
The Group’s Anti-Corruption Policy, which is aligned with the United Nations Convention
Against Corruption, outlines the procedures and processes in place to prevent, detect
and address allegations or incidents of corruption or bribery. It provides specific
guidelines of conduct for handling donations in the private sector, including hospitality,
events and gifts; charitable contributions; political engagement; dealing with public
officials; dealing with “facilitation payments”, as well as the extension of the Group’s
principles and behavioral standards to third parties. The policy, along with our Business
Partner and Employee Codes of Conduct, is reviewed and acknowledged by signature
by every new employee and is accessible to all employees on the Group’s Compliance
site of the intranet. Employees are further sensitized to the topic during the Group’s
Welcome Day, which includes a presentation on several compliance topics. Employees
are also required to complete an online compliance training the Group’s e-learning
platform, including on corruption, bribery and anti-money laundering, and to refresh
these annually. Through these trainings we ensure that our employees identify relevant
cases and understand their responsibilities in preventing and reporting incidents of
corruption or bribery.
In addition, AT takes a proactive approach to managing risks and leveraging
opportunities within its governance framework. The Group’s risk management strategy
assessments and risk management, we consider such risks associated with our
suppliers according to their economic sector and countries of operation. The Group
has identified and addressed potential risks, particularly in the areas of construction
and refurbishment/maintenance, through a number of measures and processes.
For instance, suppliers are categorized as low, medium, or high-risk based on their
contract volume with AT, the region of business operation, and other relevant criteria.
Depending on the business partner’s risk level, an adequate due diligence process
is conducted using different sources of information. In addition to desk-based due
diligence checks, our construction and operations managers are fulfilling their legal
monitoring obligations during the execution of the project according to the national
law of the project location. For further information on the Group’s Human Rights Due
Diligence Process, please refer to section S2-1.
Finally, as mentioned in G1-1, Aroundtown has put in place obligatory compliance
training for all its employees, including those working in procurement, as well as
operations and construction departments which have most contact with our business
partners and suppliers. In general, the procurement policy guides in the selection of
suppliers also regarding sustainability criteria and construction contract templates
which include environmental data requirements, such as meeting recycling rates and
waste management data delivery, ensure that business partners take responsibility
on social and environmental matters. In general, AT works with small and medium-
sized, locally operating business partners for construction and maintenance projects,
as well as larger, nationally, and internationally operating suppliers, including facility
management companies.
Consideration of Social and Environmental Criteria in Supplier Selection
AT incorporates social and environmental criteria in selecting supply-side partners
through:
1.
Adherence with Group’s Business Partner Code of Conduct:
Signing the Business
Partner Code of Conduct is mandatory for partners with contracts above €5,000.
Our BPCoC includes our expectation of our suppliers to observe all applicable
environmental, health and safety regulations in their operations, as well as
adherence to international human rights law, fair labor standards, and non-
discrimination.
2.
Due Diligence Screening:
Compliance with the Business Partner Code of Conduct
is reviewed through our Human Rights Due Diligence process, as well as spot
checks, in particular regarding health and safety on our construction sites by
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includes regular audits, compliance monitoring, and risk assessments conducted by
specialized teams. Furthermore, should an incident of corruption or bribery be reported
via the Whistleblowing System or directly with the Compliance Department, our
Investigation Policy provides guidance regarding the next steps of the investigation
process, handling the potential case and its resolution. Depending on the severity of the
case, the employee or business partner is warned, fined or banned from doing business
with the Group or their employment terminated. AT may also decide to consult with
authorities if necessary.
AT informs its suppliers on anti-corruption and its zero-corruption tolerance in the
Business Partner Code of Conduct, which all suppliers with contracts of above €5,000 are
required to sign. The BPCoC also requires business partners to set up appropriate systems
to ensure that corrupt behavior does not occur.
Lastly, as the Group is subject to several obligations under Regulation (EU) No. 596/2014
(Market Abuse Regulation, MAR), as amended, it has established an insider register and a
process to ensure that individuals on this list acknowledge their duties and are aware of
the sanctions. The Group also provides notifications (including by way of training sessions)
in accordance with MAR, to ensure all persons discharging managerial responsibilities
understand their obligations regarding managers’ transactions.
Compliance Governance Processes
Aroundtown’s investigation process is initiated by either a responsible user of the
system or a member of the Compliance Department, ensuring an objective and unbiased
approach. By involving individuals independent from the chain of management related to
the matter, the Group uphold impartiality and transparency throughout the investigation.
This structure ensures that all findings are fair and free from any conflicts of interest.
Our Compliance Department is responsible for monitoring and investigating any reported
violations of corruption and bribery. The outcomes of these investigations are reported
directly to our Co-CEO/COO and CFO and a member of the Board of Directors. This ensures
that the Board of Directors and the Management Body are promptly informed of the
investigation’s results, allowing for effective oversight and appropriate actions.
Compliance and Anti-Corruption Trainings
Besides the training program in the Group’s e-learning platform mentioned above, we
also operate a compliance site on our Group’s intranet, where the above-mentioned
compliance policies are available to all employees. This is a major step towards our
overarching goal of unifying our internal policies across all our operating regions.
Through the intranet platform, we can now also ensure that policies are available in
a standard form across the organization, and any updates are immediately rolled out.
Our intranet page and our publicly available website also support the measures that
ensure ongoing alignment with our compliance standards. It features a dedicated link
for breach reporting on our whistleblowing platform. We recognize that maintaining
alignment with our high ethical standards requires a frictionless way for employees
to raise their concerns. This is a core principle behind our “Speak Up” approach, which
encourages employees and externals to voice any concerns they may have about
breaches of the law or contradiction of our Code of Conduct without any fear of
repercussions, as dictated by the Whistleblower Protection Act.
To further raise awareness and ensure that compliance issues are considered at the
regional level,
AT operates a system of compliance ambassadors in its regional offices,
to serve as first points of contact for employees on compliance matters, including anti-
corruption and anti-bribery. These have currently been embedded in our UK and Cyprus
offices, as well as some regional offices in Germany. To enable an open culture around
compliance, these ambassadors are not officers of the Compliance Department but
are empowered to serve as sources of information and guidance for staff across the
organization.
The following table provides an overview of the nature, scope and depth of compliance
trainings offered by Aroundtown:
Table 49
Training
Program
Target
Audience
Content Focus
Frequency
Delivery
Method
Mandatory
Compliance
Training
All
employees
Specific training of Antitrust, Anti-
Money Laundering, Anti-Corruption,
“Speak up” - whistleblowing-system
Annually
e-Learning
platform
New
Employee
Onboarding
All new
hires
Introduction to the Group’s
compliance standards, anti-
corruption policies, and
reporting channels.
Upon
hiring
SharePoint
Page,
e-Learning &
Handbook
Leadership
Program
Department
Heads &
Leadership
Governance, risk mitigation,
and enforcement of compliance
policies.
During the
Program
Seminars/
Workshops
Awareness
Campaigns &
Refreshers
All
employees
Building awareness throughout
the Group
Annually
Online and
at the Head-
quarters
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The scope of AT’s actions described above extends across all levels of the organization,
including employees, management, board members, suppliers, contractors, and other
external business partners.
The actions are part of the Group’s ongoing operational activities and, therefore, do not
have a defined completion date. Implementation is continuous and integrated into AT’s
broader strategy. The description of activities mentioned above are ongoing efforts by
AT to adhere to international governance standards and our compliance framework.
Resource Allocation and Continuous Improvement
Aroundtown does not currently have the specific data available to provide this disclosure.
The allocation of financial resources to the action plan is part of the Group’s ongoing
operational activities, and this information is not tracked at the required level of detail
at this stage. The Group continuously reviews and enhances its reporting processes to
improve transparency and provide further relevant disclosures where possible.
G1-4 – Incidents of Corruption or Bribery
In 2024, AT was not subject to any convictions or fines for violations of anti-corruption
or anti-bribery laws. The Group did not experience any incidents of corruption or bribery,
nor was involved in any public legal cases related to these matters. This reflects our
ongoing commitment to upholding the highest ethical standards across our operations.
G1-6 – Payment Practices
In general, while Aroundtown does not have a specific policy addressing payment practices or
late payments to suppliers, we clearly define the payment terms at the outset of our contracts
to ensure alignment with suppliers. We are committed to adhering to these agreed-upon terms.
The data on average number of days to pay invoice from dates when contractual
or statutory term of payment start to be calculated is currently not being tracked.
Aroundtown is reviewing processes and its payments systems for possibilities to track
this information in the future.
Whereas for construction suppliers a payment term of 30 days was determined
by Aroundtown, payment terms with other suppliers or authorities are oftentimes
determined by the parties themselves. Usually, payment terms with authorities amount
to 10 days and with other types of suppliers to 21 days. We are currently working on
setting up processes to report this data and aim to have more clarity in 2025. Yet, in
2024, the total number of outstanding legal proceedings for late payments amounted
to 10 for Aroundtown, including GCP.
All employees are required to complete AT’s anti-corruption and anti-bribery trainings
at employment entry and by annual refresher. Our training completion data shows that
in 2024, 89.1% of all employees conducted the training, yet it may be that employees
left the Group in which case it would show as a missing training. Currently, we do not
track training data at the function or department level, however, the Group is reviewing
its systems and processes to report this in upcoming years.
In 2024, the Board of Directors and Management Body did not receive specific training
on anti-corruption or anti-bribery. However, they have in the past completed a training
on Anti-Money Laundering, which is a component of Anti-Corruption. A refresher training
on this topic for the Board and the Management Body is intended for 2025.
Key Actions on Corruption and Bribery and Governance
Aroundtown’s actions in relation to managing its material impacts, risks and
opportunities related to corruption and bribery are the following:
Table 50
Material impacts, risks and opportunities in ESRS G1 (Business conduct)
Topic
Sub-topic
Key action
Corruption
and bribery
Prevention
and detection
including
training
•
Compliance framework with policies in place
•
HRDD and Whistleblowing System in place for detection and
resolution of any issues
•
Training of employees on compliance and human rights-related
topics via the Group’s e-learning platform.
Incidents
Investigation of any reported incidents following the Group’s
Investigation Policy and subsequent corrective measures including
warnings, fines or bans for business partners from doing business with
the Group or the termination of employment for employees.
Investor
relations
Access to
capital
Strong governance and compliance regarding ethical business
conduct are of utmost importance for investors, which is why
Aroundtown puts great emphasis on both. Whereas issues with either
governance or compliance could lead to difficulties in accessing
capital, good performance facilitates easier access to capital.
As part of ongoing actions, AT ensures its governance and compliance
framework is following best practice and international standards. Our
annual compliance and risk assessments focus on this.
Reputation
Creating transparency regarding governance and compliance with
anti-corruption and anti-bribery is part of ensuring the Group’s good
reputation on the topic.
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Appendix
DR
Paragraph
Name
SFDR
P3
BMR
EUCL
Material
(Yes/No)
Page
ESRS 2 GOV-1
21 (d)
Board’s gender diversity
X
X
Yes
55
ESRS 2 GOV-1
21 (e)
Percentage of board members who are independent
X
Yes
55
ESRS 2 GOV-4
30
Statement on due diligence
X
Yes
59
ESRS 2 SBM-1
40 (d) i
Involvement in activities related to fossil fuel activities
X
X
X
No
ESRS 2 SBM-1
40 (d) ii
Involvement in activities related to chemical production
X
X
No
ESRS 2 SBM-1
40 (d) iii
Involvement in activities related to controversial weapons
X
X
No
ESRS 2 SBM-1
40 (d) iv
Involvement in activities related to cultivation and production of tobacco
X
No
ESRS E1-1
14
Transition plan to reach climate neutrality by 2050
X
Yes
78-80
ESRS E1-1
16 (g)
Undertakings excluded from Paris-aligned Benchmarks
X
X
Yes
79
ESRS E1-4
34
GHG emission reduction targets
X
X
X
Yes
95
ESRS E1-5
38
Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors)
X
Yes
97-101
ESRS E1-5
37
Energy consumption and mix
X
Yes
97-101
ESRS E1-5
40-43
Energy intensity associated with activities in high climate impact sectors
X
Yes
102
ESRS E1-6
44
Gross Scope 1, 2, 3 and Total GHG emissions
X
X
X
Yes
102-105
ESRS E1-6
53-55
Gross GHG emissions intensity
X
X
X
Yes
103-104
ESRS E1-7
56
GHG removals and carbon credits
X
Yes
109
ESRS E1-9
66
Exposure of the benchmark portfolio to climate-related physical risks paragraph
X
No
ESRS E1-9
66 (a)
Disaggregation of monetary amounts by acute and chronic physical risk
X
No
ESRS E1-9
66 (c)
Location of significant assets at material physical risk
X
No
ESRS E1-9
67 (c)
Breakdown of the carrying value of its real estate assets by energy-efficiency
X
No
ESRS E2-4
28
Degree of exposure of the portfolio to climate-related opportunities paragraph
X
No
ESRS E3-1
9
Amount of each pollutant listed in Annex II of the E-PRTR Regulation (European Pollutant
Release and Transfer Register) emitted to air, water and soil
X
No
ESRS E3-1
13
Water and marine resources
X
No
ESRS 2 IRO 2:
List of data points that derive from other EU legislation and information on their location in sustainability statement:
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Appendix
DR
Paragraph
Name
SFDR
P3
BMR
EUCL
Material
(Yes/No)
Page
ESRS E3-4
14
Dedicated policy
X
No
ESRS 2 SBM-1
40 (d) ii
Sustainable oceans and seas
X
No
ESRS E3-4
28 (c)
Total water recycled and reused
X
No
ESRS E3-4
29
Total water consumption in m³ per net revenue on own operations
X
No
ESRS 2 SBM-3 – E4
16 (a) i
-
X
No
ESRS 2 SBM-3 – E4
16 (b)
-
X
No
ESRS 2 SBM-3 – E4
16 (c)
-
X
No
ESRS E4-2
24 (b)
Sustainable land / agriculture practices or policies
X
No
ESRS E4-2
24 (c)
Sustainable oceans / seas practices or policies
X
No
ESRS E4-2
24 (d)
Policies to address deforestation paragraph
X
No
ESRS E5-5
37 (d)
Non-recycled waste
X
No
ESRS E5-5
39
Hazardous waste and radioactive waste
X
No
ESRS 2-SBM3 – S1
14 (f)
Risk of incidents of forced labour
X
No
ESRS 2-SBM3 – S1
14 (g)
Risk of incidents of child labour
X
No
ESRS S1-1
20
Human rights policy commitments
X
Yes
116-117
ESRS S1-1
21
Due diligence policies on issues addressed by the fundamental International Labour
Organisation Conventions 1 to 8
X
Yes
116-117
ESRS S1-1
22
Processes and measures for preventing trafficking in human beings
X
No
ESRS S1-1
23
Workplace accident prevention policy or management system
X
Yes
116-117
ESRS S1-3
32 (c)
Grievance/complaints handling mechanisms
X
Yes
118-119
ESRS S1-14
88 (b) and (c)
Number of fatalities and number and rate of work-related accidents
X
X
Yes
125
ESRS S1-14
88 (e)
Number of days lost to injuries, accidents, fatalities or illness
X
Yes
125-126
ESRS S1-16
97 (a)
Unadjusted gender pay gap
X
X
Yes
126
ESRS S1-16
97 (b)
Excessive CEO pay ratio
X
No
ESRS 2 IRO 2:
List of data points that derive from other EU legislation and information on their location in sustainability statement:
AROUNDTOWN
SA
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Consolidated Sustainability Statement
154
Appendix
DR
Paragraph
Name
SFDR
P3
BMR
EUCL
Material
(Yes/No)
Page
ESRS S1-17
103 (a)
Incidents of discrimination
X
Yes
127
ESRS S1-17
104 (a)
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
X
Yes
127
ESRS 2-SBM3 – S2
11 (b)
Significant risk of child labour or forced labour in the value chain
X
No
ESRS S2-1
17
Human rights policy commitments
X
X
Yes
130-131
ESRS S2-1
18
Policies related to value chain workers
X
X
Yes
130-131
ESRS S2-1
19
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
X
Yes
131
ESRS S2-1
19
Due diligence policies on issues addressed by the fundamental International Labour
Organisation Conventions 1 to 8
X
Yes
131-132
ESRS S2-4
36
Human rights issues and incidents connected to its upstream and downstream value chain
X
No
ESRS S3-1
16
Human rights policy commitments
X
No
ESRS S3-1
17
Non-respect of UNGPs on Business and Human Rights, ILO principles or and OECD guidelines
X
X
No
ESRS S3-4
36
Human rights issues and incidents
X
No
ESRS S4-1
16
Policies related to consumers and end-users
X
Yes
137-138
ESRS S4-1
17
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
Yes
137-138
ESRS S4-4
35
Human rights issues and incidents
X
Yes
139-140
ESRS G1-1
10 (b)
United Nations Convention against Corruption
X
Yes
148
ESRS G1-1
10 (d)
Protection of whistleblowers
X
Yes
149
ESRS G1-4
24 (a)
Fines for violation of anti- corruption and anti-bribery laws
X
X
Yes
152
ESRS G1-4
24 (b)
Standards of anti-corruption and anti-bribery
X
Yes
152
ESRS 2 IRO 2:
List of data points that derive from other EU legislation and information on their location in sustainability statement:
Legislation
SFDR
Sustainable Finance Disclosure Regulation
P3
EBA Pillar 3 disclosure requirements
BMR
EU Benchmark Regulation
EUCL
EU Climate Law
AROUNDTOWN
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Consolidated Sustainability Statement
155
To the Board of Directors of
Aroundtown S.A.
37, Boulevard Joseph II
L-1840 Luxembourg
Grand Duchy of Luxembourg
INDEPENDENT LIMITED
ASSURANCE REPORT
Limited Assurance Conclusion
We conducted a limited assurance engagement on the Consolidated Sustainability
Statement of Aroundtown S.A. (“the Company”) included in section “Consolidated
Sustainability Statement” of the Board of Directors’ Report, including the information
incorporated in the sustainability statement by reference (the “Consolidated
Sustainability Statement”) as at 31 December 2024 and for the year then ended.
Based on the procedures we have performed and the evidence we have obtained,
nothing has come to our attention that causes us to believe that the Consolidated
Sustainability Statement is not prepared, in all material respects, in accordance with:
−
the European Sustainability Reporting Standards (“ESRS”), including that the process
carried out by the Company to identify the information reported in the Consolidated
Sustainability Statement (the “Process”) is in accordance with the description set out
in section ‘IRO-1’;
−
the disclosures in section ‘EU Taxonomy Disclosures’ of the Consolidated
Sustainability Statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy
Regulation”), altogether the “Criteria”.
Basis for Limited Assurance Conclusion
We conducted our limited assurance engagement in accordance with International
Standard on Assurance Engagements 3000 (revised) (“ISAE 3000”), Assurance
Engagements Other Than Audits or Reviews of Historical Financial Information,
established by the International Auditing and Assurance Standards Board (“IAASB”) as
adopted for Luxembourg by the Institut des Réviseurs d’Entreprises (“IRE”).
We believe that the evidence we have obtained is sufficient and appropriate to provide
a basis for our conclusion. Our responsibilities under this standard are further described
in the Responsibilities of réviseur d’entreprises agréé’s section of our report.
We have complied with the independence and other ethical requirements of the
International Code of Ethics for Professional Accountants, including International
Independence Standards, issued by the International Ethics Standards Board for
Accountants (IESBA Code) as adopted for Luxembourg by the “Commission de
Surveillance du Secteur Financier” (CSSF), which is founded on fundamental principles
of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
Our firm applies International Standard on Quality Management (”ISQM”) 1, Quality
Management for Firms that Perform Audits or Reviews of Financial Statements, or
Other Assurance or Related Services Engagements as adopted for Luxembourg by the
156
CSSF and accordingly maintains a comprehensive system of quality control including
the design, implementation and operate a system of quality management, of audits or
reviews of financial statements, or other assurance and related services engagements.
Emphasis of Matter
We draw attention to section ‘General Information - ESRS 2 General Disclosures’ of the
Consolidated Sustainability Statement. This disclosure sets out that the Consolidated
Sustainability Statement has been prepared in a context of new sustainability
reporting standards requiring entity-specific and temporary interpretations and
addressing inherent measurement or evaluation uncertainties. Additionally, the Table
1 and Table 2 in section ‘BP-2’ of the Consolidated Sustainability Statement identifies
the metrics that are subject to measurement uncertainty and discloses information
about the sources of measurement uncertainty and the assumptions, approximations
and judgements the Company has made in measuring these in compliance with ESRS.
The comparability of sustainability information between entities and over time may
be affected by the lack of historical sustainability information in accordance with
ESRS and by the absence of a uniform practice on which to draw, to evaluate and
measure this information. This allows for the application of different, but acceptable,
measurement techniques.
The section ‘General Information ESRS 2 General Disclosures’, explains the ongoing
due diligence (‘GOV 4’) and double materiality assessment process (‘IRO-1’), including
robust engagement with affected stakeholders. Due diligence is an on-going practice
that responds to and may trigger changes in the Company’s strategy, business
model, activities, business relationships, operating, sourcing and selling contexts.
The double materiality assessment process may also be impacted in time by sector-
specific standards to be adopted. The Consolidated Sustainability Statement may not
include every impact, risk and opportunity or additional entity-specific disclosure
that each individual stakeholder (group) may consider important in its own particular
assessment.
Our conclusion is not modified in respect of this emphasis of matter.
Other Matter - Corresponding information not subject to assurance procedures
No reasonable or limited assurance procedures have been performed on the Consolidated
Sustainability Statement of prior year. Consequently, the corresponding sustainability
information and thereto related disclosures for the year ended 31 December 2023 have
not been subject to reasonable or limited assurance procedures.
The sustainability information and thereto related disclosures related to 2019 and
included in section ‘E1-4 – Targets related to climate change mitigation and adaptation’
have not been subject to reasonable or limited assurance procedures.
Our conclusion is not modified in respect to this other matter.
Responsibilities of the Board of Directors for the Consolidated Sustainability
Statement
The Board of Directors of the Company is responsible for:
−
the preparation of the sustainability information in the Consolidated Sustainability
Statement in accordance with the Criteria.
−
Designing, implementing and maintaining such internal control that determines
is necessary to enable the preparation of the sustainability information in the
Consolidated Sustainability Statement, in accordance with the Criteria, that is free
from material misstatement, whether due to fraud or error.
This responsibility includes:
−
developing and implementing a process to identify the information reported in the
Consolidated Sustainability Statement in accordance with ESRS and for disclosing
this process in section ‘IRO-1’ of the Consolidated Sustainability Statement.
−
understanding the context in which the Company’s activities and business relationships
take place and developing an understanding of its affected stakeholders;
−
the identification of the actual and potential impacts (both negative and positive)
related to sustainability matters, as well as risks and opportunities that affect,
or could reasonably be expected to affect, Company’s financial position, financial
performance, cash flows, access to finance or cost of capital over the short-, medium-,
or long-term;
−
the assessment of the materiality of the identified impacts, risks and opportunities
related to sustainability matters by selecting and applying appropriate thresholds; and
−
the selection and application of appropriate sustainability reporting methods and
making assumptions and estimates about individual sustainability disclosures that
are reasonable in the circumstances.
The Board of Directors of the Company is further responsible for the preparation of the
Consolidated Sustainability Statement, which includes the information identified by the
Process, in accordance with the Criteria.
157
Those charged with governance are responsible for overseeing the Consolidated
Sustainability Statement.
Those charged with governance are responsible for overseeing the Consolidated
Sustainability Statement.
Inherent limitations in preparing the Consolidated Sustainability Statement
In reporting forward looking information in accordance with ESRS, the of the Company
is required to prepare the forward-looking information on the basis of disclosed
assumptions about events that may occur in the future and possible future actions by
the Company. Actual outcome is likely to be different since anticipated events frequently
do not occur as expected.
In determining the disclosures in the Consolidated Sustainability Statement, the Board
of Directors of the Company interprets undefined legal and other terms. Undefined
legal and other terms may be interpreted differently, including the legal conformity of
their interpretation and, accordingly, are subject to uncertainties.
The references to external sources or websites in the sustainability information are
not part of the sustainability information as included in the scope of our assurance
engagement. We therefore do not provide assurance on this information.
Responsibilities of the réviseur d’entreprises agréé
Our responsibility is to plan and perform the assurance engagement to obtain limited
assurance about whether the Consolidated Sustainability Statement is free from
material misstatement, whether due to fraud or error, and to issue a limited assurance
report that includes our conclusion. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably
be expected to influence decisions of users taken on the basis of the Consolidated
Sustainability Statement as a whole.
As part of a limited assurance engagement in accordance with ISAE 3000, we
exercise professional judgement and maintain professional skepticism throughout the
engagement.
Our responsibilities in respect of the Consolidated Sustainability Statement, in relation
to the Process, include:
−
Performing procedures, including obtaining an understanding of internal control
relevant to the engagement, to identify risks that the process to identify the
information reported in the Consolidated Sustainability Statement does not
address the applicable requirements of ESRS, but not for the purpose of providing a
conclusion on the effectiveness of the Process, including the outcome of the Process;
−
Designing and performing procedures to evaluate whether the Process to identify
the information reported in the Consolidated Sustainability Statement is consistent
with the Company’s description of its Process as disclosed in section ‘IRO-1’.
Our other responsibilities in respect of the Consolidated Sustainability Statement
include:
−
Performing risk assessment procedures, including obtaining an understanding
of internal control relevant to the engagement, to identify where material
misstatements are likely to arise, whether due to fraud or error, but not for the
purpose of providing a conclusion on the effectiveness of the Company’s internal
control;
−
Designing and performing procedures responsive to where material misstatements
are likely to arise in the Consolidated Sustainability Statement. The risk of
not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Summary of the work performed
A limited assurance engagement involves performing procedures to obtain evidence
about the Consolidated Sustainability Statement. The procedures performed in a
limited assurance engagement vary in nature and form, and are less in extent than for,
a reasonable assurance engagement. Consequently, the level of assurance obtained in
a limited assurance engagement is substantially lower than the assurance that would
have been obtained had a reasonable assurance engagement been performed. The
nature, timing and extent of procedures selected depend on professional judgement,
identification of disclosures where material misstatements are likely to arise in the
Consolidated Sustainability Statement, whether due to fraud or error.
In conducting our limited assurance engagement, with respect of the Process, we
among others:
−
obtained an understanding of the Process by performing inquiries to understand
the sources of the information used by management and reviewing the Company’s
internal documentation of its Process; and
158
−
evaluated whether the evidence obtained from our procedures about the Process
implemented by the Company was consistent with the description of the Process
set out in section ‘IRO-1’ .
In conducting our limited assurance engagement, with respect to the Consolidated
Sustainability Statement, we among others:
−
obtained an understanding of the Company’s reporting processes relevant
to the preparation of its Consolidated Sustainability Statement by inquiring
and inspecting with relevant staff responsible for the Process to gain an
understanding of the Company’s approach to identifying material and non-
material sustainability matters and corresponding reporting boundaries relevant
to the preparation of the Consolidated Sustainability Statement:
−
evaluated whether all material information identified by the Process is included
in the Consolidated Sustainability Statement;
−
evaluated whether the structure and the presentation of the Consolidated
Sustainability Statement is in accordance with the Criteria;
−
evaluated the methods, assumptions and data for developing estimates and
forward-looking information;
−
obtained and read the Company’s policies and processes to address sustainability
matters and reporting, including the related IT systems;
−
observed the performance of the policies and processes by the relevant staff
responsible;
−
inquired and inspected the processes for determining the sustainability statement
content and related controls implemented;
−
interviewed relevant staff responsible for providing and preparing the
sustainability statement, inquiring and inspecting the related controls
implemented and methodologies used, including the IT systems;
−
performed analytical and substantive procedures based on a limited sample
basis on selected disclosures in the Consolidated Sustainability Statements;
−
reconciled selected disclosures in the Consolidated Sustainability Statement
with the corresponding disclosures in the financial statements and Board of
Directors’ report;
−
obtained an understanding of the process to identify taxonomy-eligible and
taxonomy-aligned economic activities and the corresponding disclosures in the
Consolidated Sustainability Statement.
Other information
The Board of Directors of the Company is responsible for the other information. The other
information comprises the information included in the Consolidated Annual report but
does not include the Consolidated Sustainability Statement and our assurance report
thereon.
Our conclusion on the Consolidated Sustainability Statement does not cover the other
information and we do not express any form of assurance conclusion thereon.
KPMG Audit S.à r.l.
Cabinet de révision agréé
Muhammad Azeem
Luxembourg, 26 March 2025
159
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Management
Discussion and
Analysis
Berlin
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161
Selected consolidated income statements data
Year ended December 31,
2024
2023
in € millions
Revenue
1,542.3
1,602.8
Net rental income
1,180.9
1,192.8
Property revaluations and capital gains / (losses)
(125.4)
(3,217.5)
Share of results from investment in equity accounted investees
(42.5)
(149.8)
Property operating expenses
(550.2)
(638.4)
Administrative and other expenses
(65.7)
(64.7)
Operating profit / (loss)
758.5
(2,467.6)
Adjusted EBITDA
1)
1,014.4
1,002.9
Finance expenses
(235.2)
(230.1)
Current tax expenses
(124.5)
(120.4)
FFO I
2)
315.5
332.0
FFO I per share (in €)
2)
0.29
0.30
FFO II
2)
393.1
449.1
Impairment of goodwill
(46.0)
(137.0)
Other financial results
(31.0)
(14.4)
Deferred tax (expense) / income
(12.5)
543.1
Profit / (loss) for the year
309.3
(2,426.4)
1)
including AT‘s share in the adjusted EBITDA of companies in which AT has significant influence, excluding the contributions from commercial assets held for sale. For more
details regarding the methodology, please see the Alternative Performance Measures section of this report
2)
including AT‘s share in the FFO I of companies in which AT has significant influence, excluding FFO I relating to minorities and contributions from commercial assets held for
sale. For more details regarding the methodology, please see the Alternative Performance Measures section of this report
Notes on Business Performance
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162
REVENUE
AT generated total revenue of €1,542 million in 2024, lower compared to €1,603 million
in 2023, primarily due to lower operating and other income, and the impact from net
disposals, partially offset by operational growth.
AT generated net rental income of €1,181 million in 2024 (“FY 2024”), 1% lower
compared to €1,193 million recorded in 2023 (“FY 2023”). The small decline in net
rental income was mainly driven by the impact from net disposals, which was mostly
offset by robust operational growth reflected by 2.9% like-for-like rental growth. Since
the start of 2023, AT has disposed ca. €2 billion of properties thereby strengthening
the liquidity position but impacting total net rental income.
Like-for-like rental growth in the commercial portfolio was 2.1%, of which 2.2% derived
from in-place rent growth and -0.1% from occupancy like-for-like. The in-place rental
growth was generated from indexation, step-up rent increases, reversion on reletting,
hotel repositioning and re-openings of closed hotels. The slight reduction in occupancy
mainly derived from the office occupancy, which was impacted by the macro-economic
environment in 2024, which negatively impacted tenant demand. The residential
portfolio recorded like-for-like rental growth of 4.4%, driven by strong in-place rent
growth. The residential portfolio continues to benefit from the significant supply and
demand imbalance in portfolio locations and as a result vacancy levels remain at a
low level.
AT further breaks down its net rental income into the recurring long-term net rental
income and net rental income generated by properties marked for disposal. As AT
intends to dispose the held-for-sale properties, AT views their contribution as non-
recurring and therefore presents their contributions in a separate line item. In 2024,
the net rental income related to properties marked for disposal was €9.4 million
compared to €13.1 million in 2023. The lower contribution in 2024 was mainly due
to lower disposals volume and the composition of the properties in the asset held for
sale. Recurring net rental income totaled €1,172 million in 2024, compared to €1,180
million in 2023. Recurring net rental income also includes immaterial rental income
from properties classified as development rights & invest which is excluded from the
run rate.
Operating and other income totaled €361 million in 2024, decreasing by 12% compared
to €410 million in 2023, and is the main reason for the decrease in revenue. Operating
income is mainly linked to ancillary expenses that are reimbursed by tenants such as
utility costs (heating, energy, water, insurance, etc.) and charges for services provided to
tenants (cleaning, security, etc.). The reduction recorded was primarily due to the lower
cost of utilities, mainly heating and electricity, compared to 2023 and the impact from
net disposals. Accordingly, this reduction in the cost of utilities is also reflected in the
lower recoverable property operating expenses. Other income also includes income
from vendor loans and loans-to-own investments in the amount of ca. €45 million.
Year ended December 31,
2024
2023
in € millions
Recurring long-term net rental income
1,171.5
1,179.7
Net rental income related to properties marked for disposal
9.4
13.1
Net rental income
1,180.9
1,192.8
Operating and other income
361.4
410.0
Revenue
1,542.3
1,602.8
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163
PROPERTY REVALUATIONS AND CAPITAL GAINS / (LOSSES)
Property revaluations and capital gains / (losses) amounted to a loss of €125 million
in 2024, significantly lower compared to the loss of €3,218 million in 2023. The full
portfolio was revalued as part of the 2024 annual report by external independent
and certified appraisers. In total, AT recorded a small devaluation amounting to €127
million and reflecting a like-for-like value decline of
0.5% in 2024, compared to €3,175
million and a like-for-like value decline of 11% in 2023. The property value recovery
started in the second half of 2024, driven by operational growth and reflected by the
2.9
% like-for-like rental growth. AT recorded like-for-like value increase of
1.9
% for H2
2024, compared to a decrease of 2.4% in H1 2024. Residential and hotel assets led the
valuation recovery, which was driven by stronger operational growth compared to the
other asset classes.
As of December 2024, the portfolio had an average value of €
2,521 per sqm and net
rental yield of
5.1
%, compared to €2,421 per sqm and 5.0% respectively as of December
2023. Additional information on valuations parameters can be found in note 13 of the
audited consolidated financial statements.
Capital gains or losses represent disposal values compared to their book values. In 2024,
AT closed approx. €740 million of disposals at a slight premium of €1.8 million to book
values and resulting in a minor capital gain. AT successfully completed disposals across
all asset types, including 77% in offices, residential and hotels, 13% in development &
invest properties, and 10% in retail and logistics/other. These disposals consisted of
45% in non-core locations, 18% in London, 10% in Berlin, 10% in Brussels and Paris, 3%
in NRW and 14% in other locations.
SHARE OF RESULTS FROM INVESTMENT IN EQUITY-ACCOUNTED
INVESTEES
The share of results from investment in equity-accounted investees amounted to a loss
of €43 million in 2024, lower compared to a loss of €150 million in 2023. This loss was
mainly driven by valuation losses in investees’ assets and slowed significantly over the
prior year. This line item represents AT’s share of profits from investments which are not
consolidated in AT’s financial statements, but over which AT has a significant influence.
As of December 2024, the largest equity-accounted investee was the investment in
Globalworth Real Estate Investments Limited (“Globalworth” or “GWI”) which is a leading
publicly listed office landlord in Central and Eastern European markets, mainly focused
on Warsaw and Bucharest. The equity-accounted investee balance also includes stakes
in assets where AT does not have control, including several real estate properties
and investment in real estate related funds specialized among others in proptech,
digitalization and technology in the real estate sector, as well as yielding real estate
loan funds and additional investments in co-working and renewable energy projects.
AT’s share in the operational profits and dividends from these investments are included
in the operational results of the Company.
The operational contribution of investees increased with an adjusted EBITDA and FFO I
contribution of €68 million and €58 million in 2024, compared to €57 million and €47
million in 2023, respectively.
Year ended December 31,
2024
2023
in € millions
Share of results from investment in equity
accounted investees
(42.5)
(149.8)
Year ended December 31,
2024
2023
in € millions
Property revaluations
(127.2)
(3,174.8)
Capital gains / (losses)
1.8
(42.7)
Property revaluations and capital gains / (losses)
(125.4)
(3,217.5)
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PROPERTY OPERATING EXPENSES
Property operating expenses totaled €550 million in 2024, decreasing by 14% compared
to €638 million in 2023. The reduction in property operating expenses was mainly due
to lower utility costs throughout the year mirroring the decline in the operating income,
no extraordinary expenses for uncollected hotel rents, and the impact from the smaller
portfolio size as a result of net disposals. The largest component of property operating
expenses are ancillary expenses and purchased services which are mainly recoverable
from tenants and include utility costs (heating, energy, water, insurance, etc.), charges
for services provided to tenants (cleaning, security, etc.) and other services contracted
in relation to the operations of properties. In 2024, operating personnel expenses
totaled €63 million, flat compared to €63 million in 2023 as increased efficiencies and
the impact of a smaller portfolio were offset by wage growth. Other operating costs
include various expenses such as marketing, letting and legal fees, transportation,
travel, communications, insurance, IT and VAT. Other operating costs decreased mainly
as no extraordinary provisions for uncollected hotel rents were recorded in 2024 as a
result of the full post-pandemic recovery of the hotel portfolio, as well as the impact
from the smaller portfolio.
Year ended December 31,
2024
2023
in € millions
Ancillary expenses and purchased services
(348.3)
(409.8)
Maintenance and refurbishment
(55.0)
(49.3)
Personnel expenses
(63.0)
(62.7)
Depreciation and amortization
(20.2)
(17.9)
Other operating costs
(*)
(63.7)
(98.7)
Property operating expenses
(550.2)
(638.4)
(*)
of which Extraordinary expenses for uncollected hotel rents amounts to €33 million in 2023 and null
in 2024
Frankfurt
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MAINTENANCE AND CAPEX
Maintenance and refurbishment expenses amounted to €55 million in 2024, increasing
by 12% compared to €49 million in 2024. The increase was mainly due to higher input
costs for materials and labor, partially offset by the smaller portfolio size due to the
impact from disposals. The maintenance expenses ratio over the average investment
property value (including the properties held for sale) was 0.22% in 2024, compared
to 0.18% in 2023.
AT constantly evaluates its portfolio to determine capex requirements thereby ensuring
the sustained high quality of its assets. This approach enhances the portfolio’s appeal,
supports the leasing process, and addresses the needs of both current and potential
tenants. AT invested €346 million in total capex in 2024, reflecting a ratio of 1.4% over
average investment property value (including properties held for sale), slightly higher
compared to €335 million and 1.2% in 2023, respectively. In line with the capex strategy
in 2023, AT carried out projects in a selective manner in 2024, targeting projects with
the highest returns.
AT divides its capex into three different main categories, which are composed of
Expansion capex, Tenant improvements and Other capex. Expansion capex is made up
of projects that are targeted at creating additional income drivers or significant value
creation potential which result in additional lettable space or significant enhancement
of the existing space. These selective projects are mostly major refurbishments but
also conversions and new-builds and they are mainly done at low risk with high pre-
let ratios. Expansion capex additionally includes GCP’s pre-letting modification and
modernization capex. In 2024, Expansion capex projects totaled €138 million and
represented 40% of total capex, compared to €122 million and representing 36% of
total capex in 2023, higher in both absolute and percentage terms as larger projects
were undertaken mainly in relation to the extensive repositioning efforts of several
hotels. Tenant improvements include capex for fit-out works that are targeted at
retaining existing tenants and/or attracting new tenants, increasing the quality of
the asset and the tenant structure. In 2024, Tenant improvement projects totaled €84
million and representing 24% of total capex, compared to €96 million and representing
29% of total capex in 2023, lower as smaller amount of these projects were undertaken.
Other capex includes ongoing capital expenditures that are targeted at sustaining
the high quality of assets as well as improving sustainability standards to reduce
energy consumption, CO
2
emissions, and the associated CO
2
tax, benefitting both
AT and its tenants. These projects include green installations such as solar panels,
combined heat and power engines and electric vehicle charging stations as well as
green refurbishments such as roof, insulation and lighting replacements. Other capex
also includes GCP’s repositioning capex which amounted to €83 million in 2024, or
67% of the total other capex. In 2024, Other capex projects totaled €124 million and
representing 36% of total capex, compared to €117 million and representing 35% of
total capex in 2023, higher due to an increase in the GCP repositioning capex as well
slightly higher spending on AT projects.
CAPEX
35%
36%
29%
2023
€335m
RATIO OVER
INVESTMENT
PROPERTY*
1.2%
RATIO OVER
INVESTMENT
PROPERTY*
1.4%
36%
24%
40%
~€235m
excl. GCP
~€235m
excl. GCP
* including properties held for sale. Portfolio value is average of the beginning and end of the period
2024
€346m
Other capex
Tenant
improvements
Expansion capex
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ADMINISTRATIVE AND OTHER EXPENSES
Administrative and other expenses totaled €66 million in 2024, broadly stable compared
to €65 million in 2023, as cost inflation has mostly stabilized in 2024. Administrative
personnel expenses represent the largest component and totaled €31 million in 2024,
stable compared to €31 million in 2023. Administrative and other expenses also include
expenses such as fees for legal, professional, consultancy, accounting and audit services,
as well as sales, marketing, IT and other administrative expenses.
FINANCE EXPENSES
AT recorded finance expenses totaling €
235
million in 2024, increasing by
2% compared
to €230 million in 2023. Finance expenses are primarily made up of net interest
expenses on bonds and bank debt. Finance expenses increased mainly due to new
debt for refinancing purposes having been raised above the current average cost of
debt as a result of the higher interest rate environment, as well as the expiry of certain
hedging instruments since the beginning of 2023 which caused some debt to become
variable at higher rates, and higher rates within the capped portion of the debt. These
impacts were partially offset by higher interest income earned on AT’s large liquidity
balance, the new hedging measures taken to hedge and fix variable and capped debt
at lower fixed rates, the buyback of bonds at a slight discount and debt redemptions. In
2024, AT made debt repayments of bonds and bank debt in the amount of approx. €
1.3
billion. These repayments included approx. €
740
million of bond buybacks made at a
discount as well as scheduled and early bond redemptions in the amount of ca. €445
million. AT repaid/
deconsolidated
bank debt in the amount of approx. €
120 million,
mainly associated with early repayments tied to disposals. On the other hand, AT raised
approx. €1.5
billion in new debt in 2024, consisting of the newly issued €
1.15
billion
of new senior unsecured bonds and signed €
360
million in new bank debt. Issuing
new bonds and raising bank debt at longer maturities and repaying shorter term debt
helped to reduce the refinancing risk further. AT’s average debt maturity is 3.8 years
with an average cost of debt at
2
% as of December 2024, compared to 4.4 years and
2.2% as of December 2023. As a result of the proactive hedging measures taken in
2024, the hedging ratio increased to 98
% as of December 2024, as compared to 83%
as of December 2023
.
OTHER FINANCIAL RESULTS
AT recorded other financial results amounting to an expense of €31 million in 2024,
compared to an expense of €14 million in 2023. The other financial results line item
records the net change in the fair value of financial assets and liabilities, hedging
instruments, and derivative instruments which are mainly non-recurring and/or non-cash
and thus the result varies from one period to another. Other financial results also include
one-off finance related costs incurred to optimize the debt profile like those associated
with debt repayments, and expenses related to new financing, currency hedging and
others. The result in 2024 was mainly driven by costs associated with refinancing and
hedging while the result in 2023 was mainly impacted by negative change in the net
fair value of financial assets and liabilities, partially offset by the gains recorded on bond
buybacks at discount in that period.
Year ended December 31,
2024
2023
in € millions
Personnel expenses
(31.0)
(30.9)
Legal and professional fees
(13.8)
(13.4)
Audit and accounting expenses
(7.6)
(7.1)
Marketing and other administrative expenses
(13.3)
(13.3)
Administrative and other expenses
(65.7)
(64.7)
Year ended December 31,
2024
2023
in € millions
Finance expenses
(235.2)
(230.1)
Year ended December 31,
2024
2023
in € millions
Other financial results
(31.0)
(14.4)
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IMPAIRMENT OF GOODWILL
AT conducts an impairment test once a year or when there is an indication of
impairment of an asset. The impairment amount reflects the amount by which the
carrying amount of an asset or cash generating unit exceeds its recoverable amount.
AT recorded impairment of goodwill in the amount of €46 million in 2024, lower
compared to €137 million recorded in 2023. As of December 2024, €525 million
of goodwill is attributed to GCP and €572 million is attributed to the goodwill on
TLG. The goodwill is mainly attributed to GCP’s and TLG’s deferred taxes which were
mainly impacted by the disposals conducted throughout the year. EPRA NAV KPI’s
exclude goodwill and therefore any change in the goodwill balance does not impact
these KPIs.
TAXATION
AT recorded current tax expenses in the amount of €125 million in 2024, increasing
by 3% compared to €120 million in 2023. Current tax expenses are comprised of both
corporate income taxes and property taxes. The increase in current tax expenses was
mainly due to
provisions from the Pillar II regulations
which increased the income taxes
in some jurisdictions, offset by lower property tax as a result of the smaller portfolio
size due to disposals. Deferred tax expenses totaled €13 million in 2024, compared to
an income of €543.1 million in 2023, mainly due to the impact of property revaluations
excluding the impact from capex in 2024 as compared to the significant property
devaluations in 2023.
Year ended December 31,
2024
2023
in € millions
Impairment of goodwill
(46.0)
(137.0)
Year ended December 31,
2024
2023
in € millions
Current tax expenses
(124.5)
(120.4)
Deferred tax (expense) / income
(12.5)
543.1
Current and deferred tax (expense) / income
(137.0)
422.7
Berlin
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RESULTS FOR THE YEAR & RESULTS PER SHARE
AT recorded a net profit amounting to €309 million in 2024, compared to a net loss of
€2,426 million in 2023. The net profit in 2024 was mainly due to the strong operational
performance, lower property operating expenses, partially offset by the lower other
financial results, higher finance expenses and a relatively small amount of property
devaluations. The shift to net profit in 2024 from net loss in 2023 was mainly due to
the significantly smaller property devaluations booked in 2024. Correspondingly, a profit
of €53 million was attributed to shareholders in 2024, compared to a loss of €1,988
million in 2023. A profit of €53 million was attributed to non-controlling interests in 2024,
compared to a loss of €592 million in 2023. The profit attributable to perpetual notes
Year ended December 31,
2024
2023
in € millions
Profit / (loss) for the year
309.3
(2,426.4)
Profit / (loss) attributable to:
Owners of the Company
52.9
(1,987.6)
Perpetual notes investors
203.4
153.4
Non-controlling interests
53.0
(592.2)
Basic earnings / (loss) per share (in €)
0.05
(1.82)
Diluted earnings / (loss) per share (in €)
0.05
(1.82)
Weighted average basic shares (in millions)
1,093.5
1,093.0
Weighted average diluted shares (in millions)
1,094.8
1,094.5
Profit / (loss) for the year
309.3
(2,426.4)
Other comprehensive income
(3.6)
(24.4)
Total comprehensive income for the year
305.7
(2,450.8)
investors amounted to €203 million in 2024, increasing by 33% compared to €153 million
in 2023. The increase was mainly due to the reset of perpetual notes since the beginning
of 2023 and until the end of 2024, partially offset by perpetual note exchanges and tender
offers. In 2024, the Group issued €2.6 billion of new perpetual notes across five series, of
which two notes were tapped in the September 2024 exchange. The exchanges targeted
a total of eight perpetual note series, comprising the perpetual notes which were not
called on their first call date as of the launch of the first exchange in April 2024, as well
as the perpetual notes with upcoming first call dates in the twelve months following
the first exchange. The exchange transactions reduced the long-term coupon payments
and support the credit metrics by S&P. Further details can be found under the Equity
section of this Board of Directors’ report, and in the notes to the consolidated financial
statements. Under IFRS accounting standards and AT’s bond covenants, perpetual notes
are fully classified as 100% equity whether they are called or not called.
The basic and diluted earnings per share amounted to €0.05 in 2024, increasing compared
to a basic and diluted loss per share of €1.82 in 2023.
In 2024, AT recorded total comprehensive income of €306 million, compared to a loss
of €2,451 million in 2023. The other comprehensive income amounted to a loss of €4
million in 2024, compared to a loss of €24 million in 2023, mainly from the foreign
currency impacts related to hedging activities.
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Adjusted EBITDA is a key performance measure used to evaluate the operational results
of the Group, derived by deducting from the EBITDA non-operational and/or non-recurring
items such as revaluation and capital gains, extraordinary expenses, and some other
minor adjustments. Additionally, in order to mirror the operational results of the Group,
the results from investments in equity-accounted investees is subtracted as this also
include the Group’s share in non-operational results generated by these investees. Instead,
to reflect their operational earnings, the Group includes in its adjusted EBITDA its share
in the adjusted EBITDA generated by investments where the Group has a significant
influence in accordance with its effective holding rate over the period.
In 2024, AT generated Adjusted EBITDA before JV contribution totaling €946 million, flat
compared to €946 million in 2023. The increase from the like-for-like rental growth of
Year ended December 31,
2024
2023
in € millions
Operating profit / (loss)
758.5
(2,467.6)
Total depreciation and amortization
20.2
17.9
EBITDA
778.7
(2,449.7)
Property revaluations and capital gains / (losses)
125.4
3,217.5
Share of results from investment in equity accounted investees
42.5
149.8
Other adjustments
1)
5.2
5.3
Contribution of assets held for sale
(5.7)
(10.0)
Add back: Extraordinary expenses for uncollected hotel rents
-
33.0
Adjusted EBITDA before JV contribution
946.1
945.9
Contribution of joint ventures' adjusted EBITDA
2)
68.3
57.0
Adjusted EBITDA
1,014.4
1,002.9
1)
including expenses related to employees’ share incentive plans
2)
the adjustment is to reflect AT‘s share in the adjusted EBITDA of companies in which AT has significant
influence and that are not consolidated
2.9% and higher profitability was offset by the impact from net disposals. Including
JV`s adjusted EBITDA contribution, AT recorded an Adjusted EBITDA of €1,014 million
in 2024, higher by 1% compared to €1,003 million recorded in 2023.
AT’s adjusted EBITDA also accounts for other adjustments in the amount of €5.2 million
in 2024, compared to €5.3 million in 2023, which are related to share incentive plans
for employees. Additionally, AT conservatively does not include the contributions from
properties marked for disposal as they are intended to be sold and therefore, their
contributions are nonrecurring. This adjustment amounted to €5.7 million in 2024,
lower compared to €10 million in 2023, mostly as a result of the lower disposals volume
and composition of the properties in the assets held for sale.
ADJUSTED EBITDA
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FUNDS FROM OPERATIONS (FFO I, FFO II)
Funds from Operations I (FFO I) is an industry standard performance indicator, reflecting
the recurring operational profitability. FFO I starts by deducting the finance expenses,
current tax expenses and perpetual notes attribution from the adjusted EBITDA. The
calculation further includes the relative share in the FFO I of joint venture positions
and excludes the minorities’ share in operational profits. Furthermore, AT included in
previous periods the extraordinary expenses for uncollected hotel rents and makes an
adjustment related to assets held for sale.
In addition, AT provides the FFO II, which is an additional key performance indicator
used in the real estate industry to evaluate the recurring operational profits including
the disposal gains during the relevant period.
In 2024, AT generated an FFO totaling €316 million, decreasing by 5% compared to
€332 million in 2023. The reduction in FFO was mainly due to the higher perpetual
notes attribution as a result of the higher coupon rates for the perpetual notes and
the higher finance expenses as result of the higher interest rate environment, partially
offset by operational growth reflected in the 1% increase in adjusted EBITDA. In order
to mitigate the negative impacts resulting from the higher interest rate environment,
AT successfully executed perpetual note exchanges with tender options which are FFO
accretive in the long-term and successfully undertook proactive liability management
exercise such as hedging and fixing variable and capped debt at lower fixed rates. The
contribution from assets held for sale, which is excluded from the FFO, amounted to
€3.4 million in 2024 compared to €7.1 million in 2023.
AT reported an FFO I per share of €0.29 in 2024, decreasing by 3% compared to €0.30
in 2023.
AT recorded an FFO II of €393 million in 2024, lower by 12% compared to €449 million
in 2023. The decrease was mainly due the lower volume of disposals executed as well
as the lower FFO I result in 2024. In 2024, AT closed ca. €740 million of disposals at a
12
% margin over cost compared to €1.2 billion in 2023.
Year ended December 31,
2024
2023
in € millions
Adjusted EBITDA before JV contribution
946.1
945.9
Finance expenses
(235.2)
(230.1)
Current tax expenses
(124.5)
(120.4)
Contribution to minorities
1)
(127.8)
(127.0)
Adjustments related to assets held for sale
2)
2.3
2.9
Perpetual notes attribution
(203.4)
(153.4)
FFO I before JV contribution
257.5
317.9
Contribution of joint ventures' FFO I
3)
58.0
47.1
Extraordinary expenses for uncollected hotel rents
-
(33.0)
FFO I
315.5
332.0
FFO I per share (in €)
0.29
0.30
Weighted average basic shares (in millions)
4)
1,093.5
1,093.0
FFO I
315.5
332.0
Result from the disposal of properties
5)
77.6
117.1
FFO II
393.1
449.1
1)
including the minority share in TLG‘s and GCP‘s FFO
2)
the net contribution which is excluded from the FFO amounts to €3.4 million in 2024 and €7.1 million in 2023
3)
the adjustment is to reflect AT‘s share in the FFO I of companies in which AT has significant influence and that are
not consolidated
4)
weighted average number of shares excludes shares held in treasury; base for share KPI calculations
5)
the excess amount of the sale price, net of transaction costs and total costs (cost price and capex of the disposed
properties)
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Year ended December 31,
2024
2023
in € millions
Net cash from operating activities
820.5
772.1
Net cash from investing activities
152.6
608.2
Net cash used in financing activities
(495.9)
(1,051.6)
Net changes in cash and cash equivalents
477.2
328.7
Cash and cash equivalents as at the beginning of the year
2,641.2
2,305.4
Other changes
1)
10.0
7.1
Cash and cash equivalents as at the end of the year
3,128.4
2,641.2
€821 million of net cash was generated from operating activities in 2024, increasing
by 6% compared to €772 million in 2023. The increase in operational cash flow was
mainly due to the like-for-like rental growth of 2.9%, the improved performance of
the hotel segment with no extraordinary expenses for uncollected rent, and higher
dividends received from investees, partially offset by the impacts from net disposals.
€153 million of net cash was received from investing activities in 2024, lower compared
to €608 million in 2023. In 2024, €730 million was received from disposals and cash
flow from repayment of vendor loans, net of new vendor loans granted, transaction
costs and taxes. In 2024, €493 million was used mainly for capex and a small amount
for acquisitions, while €65 million refers to net investment in short and long term
financial assets.
€496 million of net cash was used in financing activities in 2024, lower compared
to €1,052 million used in financing activities 2023. The main uses of cash in 2024
included approx. €1.3 billion in debt repayments which included the bond buybacks at
a slight discount, scheduled redemptions, and early redemption, as well as repayment
of bank loans. Payments to perpetual notes investors amounted to €486 million, mainly
related to the perpetual note exchanges and tender offers executed in 2024, through
which the nominal outstanding amount of perpetual notes reduced by ca. €300 million,
as well as coupon payments. Other uses of cash included net finance expenses and
loan amortizations. The Company recorded a small outflow from transactions with non-
controlling interests mainly from dividend distributions to non-controlling interests,
which was mostly offset by the disposal by GCP of the majority of its treasury shares in
the amount of ca. €45 million. These cash uses were partially offset by the net proceeds
from the issuance of €1.15 billion nominal amount of new bonds as well as new bank
debt raised. In 2024 the Company recorded a small amount of proceeds from hedge
relations, derivatives and others.
In total, €477 million of net cash was generated in 2024. Including other liquid assets,
AT’s liquidity position reached €3.6 billion at the end of December 2024, representing
25% of the total debt position.
1)
including change in balance of assets held for sale and movements in exchange rates on cash held
CASH FLOW
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ASSETS
(a) Total assets
Total assets amounted to €33.6 billion as of December 2024, flat compared to €33.6
billion as of December 2023. The positive impact of cash proceeds from new bonds
and bank debt raised as well as operational profits was offset by liability management
measures such as debt repayments, the use of cash for the perpetual notes tenders
and a small amount of property devaluations. Non-current assets totaled €28.0 billion
as of December 2024, lower by 3% compared to €28.9 billion as of December 2023.
(b) Investment property
Investment property represents the largest item under non-current assets and
amounted to €24.4 billion as of December 2024, decreasing by 1% compared to €24.6
billion as of December 2023. The lower balance was mostly due to a small amount of
property devaluations and disposals activities. These impacts were partially offset by
capex and some additions. On a like for like basis, AT recorded
-0.5
%
value decline in
2024, compared to -11% in 2023. Property valuations started to recover in mid 2024 as
discount rates, cap rates and rental yields have started to stabilize and sentiment and
activity have improved in the transaction market. Operational growth continues to be
supportive driving positive revaluation in the second half of 2024. The residential and
hotel assets showed a stronger operational growth than other asset classes, in line with
the rental income growth in these assets. Independent and certified external appraisers
revalued the full portfolio as part of the 2024 annual report.
In 2024, AT closed approx. €740 million in disposals at an average premium of
0.2
%
to book values, compared to over €1.2 billion in 2023 at an average discount of 3% to
book values. Furthermore, AT signed approx. €
935
million of new disposals in 2024 and
approx. €330 million of disposals are signed in 2024 but not closed as of December
2024. Disposals consisted of 77% residential, office, and hotel assets, 13% development
& invest assets, and 10% retail and logistics/other assets and were located mainly in
non-core locations, London, Berlin, Brussels and Paris, NRW and others.
New investment properties in the amount of ca. €420 million were added in 2024.
These additions consisted of hotels, residential and office properties primarily in the
UK, Germany and Israel, with operational upside potential. The majority of these assets
were previously held indirectly, e.g. as loan-to-own assets, or through joint venture
structures, and converted into investment property as the Company obtained control
over the underlying properties. Furthermore, AT started acquiring properties as the
general partner through its recently launched acquisition fund to target properties with
significant upside potential at very attractive pricing to benefit from the recent periods’
arisen distress opportunities due to the market environment challenges of refinancing
and ESG-implementation. AT is expected to be a minority in the fund with the majority
of the funds to be funded from institutional investors.
(c) Goodwill and intangible assets
Goodwill and intangible assets amounted to €1.1 billion as of December 2024, lower
compared to €1.2 billion as of December 2023. The decrease was due to the goodwill
impairment in 2024 as explained under the section
Impairment of goodwill
above.
Goodwill in the amount of €572 million is related to the TLG takeover and goodwill in
the amount of €525 million is related to the consolidation of GCP. All EPRA NAV KPI’s
exclude the goodwill so any change in the goodwill balance has no impact on these KPI’s.
(d) Investment in equity-accounted investees
Investment in equity-accounted investees totaled €0.9 billion as of December 2024, lower
compared to €1.1 billion at the end of December 2023. The decrease was mainly due
to some valuation losses recorded in investees, the consolidation of some investees,
as
well as repayments from investees offset by minor additions to investees. This line item
represents the Group’s long-term investment in joint ventures in which the Group has
a significant influence, but which are not consolidated. The largest investment in this
item as of December 31, 2024, which represents ca. 50% of the total balance of this item,
Dec 2024
Dec 2023
Note
in € millions
Total Assets
(a)
33,619.9
33,559.3
Non-current assets
(a)
28,020.2
28,867.5
Investment property
(b)
24,375.3
24,632.4
Goodwill and intangible assets
(c)
1,119.6
1,165.7
Investment in equity-accounted investees
(d)
925.7
1,086.5
Long term financial investments and other assets
(e)
1,161.8
1,458.1
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is AT’s stake in Globalworth, a leading publicly listed office landlord in Central Eastern
European markets, mainly in Warsaw and Bucharest. The holding rate in Globalworth is
slightly above 30% as of December 2024, indirectly held through a joint venture. The
remaining balance of equity-accounted investees mainly include several positions in real
estate properties mainly in Germany and Greece, and investment in real estate related
funds specialized among others in proptech, digitalization and technology in the real
estate sector, as well as yielding real estate loan funds, which work in a similar profile to
the Group’s loans-to-own investments and may provide future access to attractive deals,
and additional investments in co-working and renewable energy projects.
(e) Long term financial investments and other assets
Long term financial investments and other assets are mainly comprised of vendor
loans that are related to disposals, long-term financial investments and loans-to-
own assets. Vendor loans support the facilitation of transactions and were given to
several selected buyers of assets that were sold. The loans generally have a maturity
of 1-3 years and are expected to be paid in installments mostly until the end of
2026. The loans are secured against the property sold at an initial LTV in the range
of 40%-70% at the time of disposal and in case of default gives AT the ability to get
the asset back with a penalty to the defaulted buyer (through a process involving a
receiver). The average interest rate of the vendor loans is ca. 5%. The balance as of
December 2024 is ca. €0.55 billion, down from €0.65 billion as of December 2023,
which supported the liquidity and reduced the leverage. The future liquidity coming
from the repayments of the vendor loans in the next periods will reduce the Group’s
leverage as they are conservatively not included in the LTV calculation. After the
reporting period the Group received further vendor loan repayments.
Loans-to-own assets are asset-backed and yielding loans where, under certain conditions,
the default of the loan will enable the Group to take over the underlying asset at a
discount. Loans-to-own assets were provided to a diverse number of property owners
and sourced through the Group’s wide deal sourcing network established over the years.
As of December 2024, the loans-to-own balance amounted to ca. €0.25 billion, down
from ca. €0.4 billion in December 2023, mostly from repayments and partially from the
taking over of assets.
The loans-to-own assets are expected to be repaid or converted into properties and
will reduce the Group’s leverage. Although the loans-to-own balance is a relatively
small part of the Group’s balance sheet, it is extending the Group’s deal sourcing
opportunities, which under certain circumstances may provide attractive options for
alternative acquisition opportunities. During 2024, AT was able to utilize this source
to gain control of investment properties primarily in London and Germany, previously
included in the loans-to-own balance.
Financial investments amounted to ca. €0.4 billion
which comprise over 20 investments
mainly in real estate related funds as well as proptech funds and potentially co-
investments in their attractive deals and financial assets with the expectation for long-
term yield.
The long term financial investments and other assets also include ca. €65 million
of tenant deposits which are used as a security for rent payments, ca. €50 million of
receivables due to revenue straight-lining effect arising from rent-free periods granted
to tenants, long-term minority positions in real estate properties and other receivables.
Furthermore, non-current assets also include long-term derivative financial assets,
deferred tax assets, and advance payments and deposits which mainly refer to advance
payments for signed deals, deposits for deals in the due diligence phase and deposits
for committed capex programs.
C
urrent assets amounted to €5.6 billion as of December 2024, increasing by 19%
compared to €4.7 billion as of December 2023. The increase was mainly attributable
to the higher balance of cash and liquid assets.
The cash and liquid assets balance amounted to €3.6 billion as of the end of 2024,
20% higher compared to €3.0 billion as of December 2023. The increase in the
liquid position was mainly due to new debt drawn, net cash proceeds from disposals,
operational profits, and repayment of vendor loans and loans-to-own, partially offset by
debt repayments and redemptions and cash used in relation to the Group’s perpetual
Dec 2024
Dec 2023
in € millions
Current assets
5,599.7
4,691.8
Cash and liquid assets
1)
3,642.1
3,026.1
Trade and other receivables
1,035.1
1,008.3
Assets held for sale
2)
702.2
409.4
1)
including cash in assets held for sale, short term deposits and financial assets at fair value through profit or loss
2)
excluding cash in assets held for sale
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AVERAGE VALUATION PARAMETERS
2024
2023
Rental multiple
19.8
19.9
Value per sqm
€2,521
€2,421
VALUATION ASSUMPTIONS SET BY
INDEPENDENT VALUERS
2024
2023
DCF method
Rent growth p.a.
1,9%
2,0%
Average discount rate
6,3%
6,1%
Average cap rate
5,1%
5,1%
notes transactions. AT’s substantial liquidity position represents 25% of total debt.
The trade and other receivables balance totaled €1 billion as of year-end 2024, stable
compared to €1 billion as of year-end 2023. Operating costs and operational rent
receivables, pre-paid expenses, and tax assets make up the largest portion and totaled
approx. €705 million as of December 2024, lower compared to approx. €775 million
as of December 2023. Operating cost receivables relate to ancillary services and other
charges billed to tenants. These services include utility and service costs which include
heating, water, insurance, cleaning, waste, etc. These operating cost receivables are
mainly settled once per year against the advance payments received from tenants and
are therefore correlated to pre-payments for ancillary services received from tenants
presented under short-term liabilities. Current assets also include financial assets with
a maturity of less than 1 year, which comprise the current portion of loans-to-own
assets, vendor loans and other receivables which totaled approx. €
330
million as of
year-end 2024, higher compared to approx. €230 million as of year-end December 2023,
as a larger share of the balance is expected to be repaid in the next 12 months, and
explained further above as part of the non-current assets.
The assets held for sale balance amounted to €702 million as of December 2024, higher
compared to €409 million as of December 2023, mainly due to proactive disposal
activity of the Company and therefore the reclassifications of investment property into
the held for sale balance, partially offset by the closing of disposals included previously.
The assets in held for sale are expected to be sold within the next 12 months and
approx. 50% of this balance is signed but not yet closed. The expected proceeds will
further strengthen AT’s liquidity position and support future deleveraging.
December 2024
Investment
properties
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualized
net rent
(in €M)
In-place rent
per sqm
(in €)
Value
per sqm
(in €)
Rental
yield
WALT
(in years)
Office
8,268
2,993
12.7%
431
13.3
2,763
5.2%
4.3
Residential
7,802
3,506
3.5%
383
9.3
2,225
4.9%
NA
Hotel
5,164
1,565
2.6%
254
13.5
3,299
4.9%
14.2
Logistics/Other
400
433
6.7%
26
5.2
925
6.4%
4.8
Retail
1,024
493
13.5%
52
10.0
2,077
5.1%
4.5
Development rights & Invest
1,717
Total
24,375
8,990
7.5%
1,146
11.2
2,521
5.1%
7.6
Total (GCP at relative consolidation)
21,093
7,530
8.1%
989
11.6
2,583
5.1%
7.7
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175
LIABILITIES
Total liabilities amounted to €18.6 billion as of December 2024, higher by 1% compared
to €18.4 billion as of December 2023. The increase was mainly due to new debt raised,
through the Group’s issuance of two new straight bonds and new bank debt, mostly
offset by debt repayments as a result of debt buybacks and debt redemptions. Total
debt from bank loans and bonds totaled €14.5 billion at year-end 2024, higher by
2% compared to €14.2 billion at year-end 2023. In 2024, the Group returned to bond
markets and issued €1.15 billion in new senior unsecured bonds, one of which was
issued by GCP, and which received broad investor demand and extended the debt
maturity profile. In addition, AT signed approx. €360 million in new secured bank debt
throughout the year and consolidated approx. €90 million of loans borrowings. Proceeds
from the new debt raised were used for liability management purposes by repurchasing
and redeeming ca. €1.2 billion of shorter-term bonds at or prior to their maturity date.
In 2024, ca. €120 million of bank debt was reduced mostly related to disposals and
deconsolidation. All together in 2024, AT repaid ca. €1.3 billion of shorter-term debt,
the majority of which at a discount, while raising €1.5 billion in new longer-term debt,
thereby extending the maturity profile and proactively reducing the refinancing risk.
After the reporting period, AT redeemed Series K bond and Series M bond with an
aggregate nominal amount of ca. €480 million. In addition, the Group signed ca. €75
million in new bank debt in 2024 which has not yet been drawn. As of December 2024,
AT also retains undrawn revolving credit facilities, of which €0.8 billion have been
extended in 2024, and €16.9 billion in unencumbered assets which can be utilized to
raise additional secured financing.
Dec 2024
Dec 2023
in € millions
Long and short term loans and borrowings
2,501.1
2,204.1
Long and short term straight bonds
12,010.9
12,038.0
Deferred tax liabilities (including those under held for sale)
2,120.9
2,125.1
Long and short term derivative financial instruments and
other long-term liabilities
942.9
1,076.1
Other current liabilities
1)
1,034.4
966.3
Total Liabilities
18,610.2
18,409.6
1)
excluding current liability items that are included in the lines above
Deferred tax liabilities amounted to €2.1 billion as of December 2024, stable compared
to €2.1 billion as of December 2023, as the impact of net disposals was mostly offset
by the deferred tax expense. Deferred tax liabilities are non-cash items that are
predominantly tied to revaluation gains, calculated by assuming theoretical future
property disposals in the form of asset deals and as such the full corporate tax rate is
applied in the relevant jurisdictions. Deferred tax liabilities represented 11% of total
liabilities as of the end of December 2024.
The long and short term derivative financial instruments and other long-term
liabilities amounted to €0.9 billion as of December 2024 compared to €1.1 billion
as of December 2023. Other long-term liabilities also include tenancy deposits, lease
liabilities mainly in relation to right-of-use assets, and non-current payables to third
parties. The derivative financial instruments include a contingent liability created as
part of the takeover of TLG.
Other current liabilities amounted to €1.0 billion as of year-end 2024, higher compared
to €1.0 billion at the end of December 2023. The largest item in other current
liabilities is trade and other payables, which mainly comprise of pre-payments for
ancillary services received from tenants that are correlated with the operating costs
receivables under current assets. Other current liabilities also include tax payables,
provisions for other liabilities and accrued expenses and other liabilities in properties
held for sale which are not included above. Current assets cover current liabilities by
approx. 2 times.
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176
DEBT METRICS
AT’s disciplined debt management approach, strong credit profile, and high financial
strength are reflected in the solid debt metrics. AT had an LTV of 42% as of December
2024, lower compared to 43% as of December 2023. The impact of a small amount
of negative property revaluations year over year was more than offset by the positive
impacts of net disposals, operational profitability, the suspension of dividends, debt
repayments at a discount, and the repayment and conversion of loans to own and of
vendor loans. Aroundtown’s leverage and financial metrics retain a very significant
headroom to bond covenants. The Board of Directors has set an internal LTV guidance
of 45% on a sustainable basis, significantly lower than the bond covenants.
The Group’s high operational profitability and financial discipline resulted in a high
ICR of 4.0x in 2024, slightly lower compared to 4.2x in 2023, as a result of the larger
proportional increase in finance expense compared to the increase in adjusted EBITDA.
AT had an unencumbered investment property ratio of 71% (by rent) representing
a total value of €16.9 billion (excluding held for sale assets) as of December 2024.
The large pool of unencumbered assets highlights the Group’s financial flexibility and
provides additional liquidity potential, along with undrawn revolving credit facilities
of which €0.8 billion have been extended in 2024.
LOAN-TO-VALUE (LTV)
Dec 2024
Dec 2023
in € millions
Investment property
1)
24,350.5
24,581.1
2)
Investment property of assets held for sale
691.8
408.3
Investment in equity-accounted investees
3)
708.2
857.1
Total value (a)
25,750.5
25,846.5
Total financial debt
4)
14,512.0
14,242.1
Less: Cash and liquid assets
4)
(3,642.1)
(3,026.1)
Net financial debt (b)
10,869.9
11,216.0
LTV (b/a)
42%
43%
UNENCUMBERED ASSETS
Dec 2024
Dec
2023
in € millions
Rent generated by unencumbered assets
5)
825.8
855.8
Rent generated by the total Group
5)
1,159.2
1,158.7
Unencumbered assets ratio
71%
74%
Year ended December 31,
INTEREST COVER RATIO (ICR)
2024
2023
in € millions
Finance expenses
235.2
230.1
Adjusted EBITDA
6)
951.8
955.9
ICR
4.0x
4.2x
1)
including advance payments and deposits and owner-occupied property and excluding right-of-use assets
2)
Owner-occupied property was reclassified for FY 2023
3)
including property related JV‘s
4)
including balances under held for sale
5)
annualized net rent including the contribution from joint venture positions and excluding the net rent from assets held
for sale
6)
including the contributions from assets held for sale, excluding extraordinary expenses for uncollected hotel rents. Not
including contributions from JV`s
Affirmed in
Dec 2024
OUTLOOK
NEGATIVE
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177
EQUITY
Total equity amounted to €15.0 billion as of December 2024, stable compared to €15.1
billion as of December 2023. The decline from the lower perpetual notes balance
mainly due to the exchange and tender offers was partially offset by the net profit
recorded in 2024. Shareholders’ equity amounted to €7.6 billion as of year-end 2024,
stable compared to €7.6 billion as of year-end 2023. In 2024, AT did not pay a dividend
for the year 2023 due to the macro-economic uncertainty and the strategic focus on
liquidity and deleveraging. Non-controlling interests totaled €2.8 billion as of December
2024, higher compared to €2.7 billion as of December 2023, mainly due to the positive
property revaluations in GCP, GCP‘s sale of treasury shares and the investment through
the recently launched acquisition fund. AT’s stake in GCP was 62% as of year-end 2024.
Equity attributable to perpetual notes investors amounted to €4.5 billion as of year-end
2024, lower by 5% compared to €4.8 billion as of year-end 2023. The nominal perpetual
balance reduction of ca. €300 million was due to the impact of the perpetual note
exchanges, including tendered perpetuals repurchased at a discount, the impact from
hedging measures, and a small amount of buybacks. In 2024, the Group successfully
executed perpetual note exchanges and tender offers. The exchanges targeted a total
of eight perpetual note series, comprising the perpetual notes which were not called
on their first call date as of the launch of the first exchange in April 2024, as well as
the perpetual notes with upcoming first call dates in the twelve months following
the first exchange. These perpetual notes exchanges had a high average acceptance
rate of ca. 85% and €2.6 billion of new perpetual notes were issued across 5 series,
of which 2 notes were tapped in the exchange transaction in September 2024. The
perpetual exchange and tender offers support credit metrics under S&P methodology
and the impacts are long-term FFO accretive. The Board of Directors of Aroundtown
decided not to call the perpetual notes with first call dates in 2024. As a result, the
perpetual notes with a first call date in January 2024 had its coupon adjusted to 4.542%,
the GBP perpetual notes with a first call date in June 2024 had its coupon adjusted
and subsequently swapped to 6.85%, and the perpetual notes with a first call date in
December 2024 had its coupon adjusted to 6.193%. In addition, the coupon on the
remaining USD perpetual notes that had a first call date in July 2023 was swapped
to 5.756%. In December 2024 the Board of Directors of Aroundtown announced its
decision not to call AT’s perpetual note with a first call date in January 2025, which
subsequently reset to 5.871% after the reporting period. The Group does not have
any additional perpetual notes with first call dates before mid-2026. Following IFRS
accounting treatment, perpetual notes are classified as equity as they do not have a
repayment date, are subordinated to debt, do not have default rights nor covenants
and coupon payments are deferrable at the Company’s discretion. The perpetual notes
are 100% equity under IFRS regardless of whether they are called or not and therefore
have no impact on the bond covenants. Perpetual notes remain an important part of
the Company’s capital structure as they provide a security cushion during volatile times
by allowing issuers to manage the timing of any refinancing and conserve cash despite
the higher coupon payments. For additional details please see the relevant notes to
the consolidated financial statements.
Dec 2024
Dec
2023
in € millions
Total equity
15,009.7
15,149.7
of which equity attributable to the owners of the Company
7,630.2
7,643.3
of which equity attributable to perpetual notes investors
4,540.6
4,756.9
of which non-controlling interests
2,838.9
2,749.5
Equity ratio
45%
45%
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178
EPRA Performance Measures
The European Public Real Estate Association (EPRA) is the widely-recognized market
standard guidance and benchmark provider for the European real estate industry. EPRA’s
best practices recommendations dictate the ongoing reporting of a set of performance
metrics intended to enhance the quality of reporting by bridging the gap between the
regulated IFRS reporting presented and specific analysis relevant to the European real
estate industry. These standardized EPRA performance measures provide additional
relevant earnings, balance sheet and operating metrics, and facilitate for the simple
and effective comparison of performance-related information across the industry. The
information presented below is based on the Best Practice Recommendations by EPRA
and on the materiality and importance of information.
in € millions unless otherwise indicated
2024
Change
2023
EPRA NRV
10,032.3
1%
9,920.8
EPRA NRV per share (in €)
9.1
-
9.1
EPRA NTA
8,165.4
1%
8,058.7
EPRA NTA per share (in €)
7.4
-
7.4
EPRA NDV
6,772.7
(11%)
7,592.1
EPRA NDV per share (in €)
6.2
(10%)
6.9
EPRA Earnings
(*)
272.1
(9%)
298.4
EPRA Earnings per share
(*)
(in €)
0.25
(7%)
0.27
EPRA Earnings (excl. perp)
(*)
459.8
5%
438.8
EPRA Earnings (excl. perp) per share
(*)
(in €)
0.42
5%
0.40
EPRA LTV
59.6%
(1.2%)
60.8%
EPRA LTV (including RETT)
55.7%
(1.3%)
57.0%
EPRA Net initial yield (NIY)
4.0%
-
4.0%
EPRA 'Topped-up' NIY
4.1%
-
4.1%
EPRA Vacancy
7.5%
(0.4%)
7.9%
EPRA Vacancy including JV
7.9%
(0.2%)
8.1%
EPRA Cost Ratio (including direct vacancy costs)
20.2%
(2.8%)
23.0%
EPRA Cost Ratio (excluding direct vacancy costs)
18.0%
(2.8%)
20.8%
EPRA Capital Expenditure
(**)
766.9
40%
546.1
(*)
according to the updated EPRA methodology. For more details, refer to the EPRA Performance Measures section of the report, 2023 figures adjusted accordingly
(**)
including acquisitions and capex, for more details see the EPRA Performance Measures section of this report
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179
EPRA NAV KPI’S
The European Public Real Estate Association (EPRA) provides three key Net Asset Value
(NAV) metrics designed to provide stakeholders with the most relevant information on the
fair value of the Group’s assets and liabilities. With the evolving nature of their business
models, real estate companies progressed into actively managed entities, engaging in non-
property operating activities, actively recycling capital and accessing capital markets for
balance sheet financing. In line with these developments, EPRA has provided the market
with the following three NAV KPI’s: EPRA Net Reinstatement Value (EPRA NRV), EPRA Net
Tangible Assets (EPRA NTA) and EPRA Net Disposal Value (EPRA NDV).
The EPRA NRV
’s purpose is to reflect the value of net assets required to re-build a
company on a long-term basis assuming entities do not sell assets. Therefore, balance
sheet items that are not expected to crystallize in normal circumstances such as the fair
value movements of financial derivatives and deferred tax liabilities are added back to
the equity. Additionally, gross purchasers’ costs are added back since this metric is aiming
to reflect what would be needed to recreate a company through the investment markets
based on its capital financing structure.
The EPRA NTA
aims to reflect the tangible value of a company’s net assets assuming
entities buy and sell assets, crystallizing certain levels of unavoidable deferred tax liabilities.
Therefore, EPRA NTA excludes intangible assets and goodwill, and adds back the portion of
deferred tax liabilities that is not expected to crystallize as a result of long-term hold strategy.
The EPRA NDV
provides the shareholders with the value under the scenario that a
company’s assets are sold or its liabilities are not held until maturity. For this purpose, it
assumes that deferred taxes, financial instruments and other adjustments are calculated
to the full extent of their liability, net of any resulting tax.
1)
excluding significant minority share in deferred tax liabilities (DTL), as well as deferred tax assets on certain financial instruments in line with EPRA recommendations. EPRA NRV additionally includes DTL of assets held for sale
2)
excluding significant minority share in derivatives
3)
deducting the goodwill resulting from the business combination with TLG
4)
deducting the goodwill resulting from the consolidation of GCP
5)
excluding significant minority share in intangibles
6)
including the gross purchasers‘ costs of assets held for sale and relative share in GCP‘s relevant RETT
7)
excluding shares in treasury, base for share KPI calculations
Dec 2024
Dec 2023
in € millions
in € millions
EPRA NRV
EPRA NTA
EPRA NDV
EPRA NRV
EPRA NTA
EPRA NDV
Equity attributable to the owners of the Company
7,630.2
7,630.2
7,630.2
7,643.3
7,643.3
7,643.3
Deferred tax liabilities
1)
1,857.5
1,597.3
-
1,841.2
1,564.8
-
Fair value measurement of derivative financial instruments
2)
55.7
55.7
-
14.2
14.2
-
Goodwill in relation to TLG
3)
(572.4)
(572.4)
(572.4)
(604.0)
(604.0)
(604.0)
Goodwill in relation to GCP
4)
(525.4)
(525.4)
(525.4)
(539.8)
(539.8)
(539.8)
Intangibles as per the IFRS balance sheet
5)
-
(20.0)
-
-
(19.8)
-
Net fair value of debt
-
-
240.3
-
-
1,092.6
Real estate transfer tax
6)
1,586.7
-
-
1,565.9
-
-
NAV
10,032.3
8,165.4
6,772.7
9,920.8
8,058.7
7,592.1
Number of shares (in millions)
7)
1,096.6
1,094.4
NAV per share (in €)
9.1
7.4
6.2
9.1
7.4
6.9
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180
The EPRA NAV KPIs were positively impacted by the profit attributable to the owners
of the Company, driven primarily by the positive operational result mainly from the
like-for-like rental growth of 2.9% and the lower property operating expenses, which
was partially offset by higher finance expenses and perpetual note attribution, the
lower other financial results, and the small amount of property devaluations. The
reduction in goodwill had no impact on the EPRA KPIs as goodwill is excluded from
the EPRA NAV KPIs, thus any change is neutral.
EPRA NRV
The EPRA NRV amounted to €10.0 billion or €9.1 per share as of December 2024,
slightly higher by 1% and flat respectively, compared to €9.9 billion or €9.1 per share
as of December 2023. The higher EPRA NRV was mainly the result of higher shareholder
equity as a result of the net profit and the higher adjustment impact for the fair value
measurement of derivative financial instruments.
EPRA NTA
The EPRA NTA amounted to €8.2 billion or €7.4 per share as of December 2024, increasing
by 1% and flat respectively, compared to €8.1 billion or €7.4 per share as of December
2023.
As EPRA NTA aims to reflect the tangible value of a company’s net assets assuming
entities buy and sell assets, certain levels of deferred tax liabilities are assumed to be
crystallized. As a result, AT only adds back the deferred tax liabilities with regards to its
long-term portfolio. This item, as with EPRA NRV, is net of significant minority share in
deferred tax liabilities as well as deferred tax assets on certain financial instruments in
line with EPRA recommendations. The remaining portfolio is treated as follows:
Investment property of assets held for sale:
Assets held for sale are properties which are expected to be disposed within the next
12 months. Conservatively, deferred taxes on these properties are not added back,
although Aroundtown has a track record of benefitting from a lower tax ratio for its
disposals due to the disposal structure.
Retail portfolio:
Aroundtown actively seeks to reduce the share of retail assets in its portfolio on an
opportunistic basis. Therefore, deferred tax liabilities related to these properties are
conservatively not added back.
GCP’s portfolio cities classified as “Others”:
Aroundtown follows GCP’s approach to not add back deferred tax liabilities related to
these properties.
Development rights & Invest portfolio:
As an additional value creation driver, Aroundtown pursues a selective development
program which is designed to unlock further potential through identifying and selling
development rights at high gains or developing at low risks with high pre-let ratios.
Since the decision is based on an opportunistic basis, Aroundtown conservatively does
not add back deferred tax liabilities related to these assets.
EPRA NDV
The EPRA NDV amounted to €6.8 billion or €6.2 per share as of December 2024, lower
by 11% and 10% respectively, compared to €7.6 billion or €6.9 per share at year-end
2023. EPRA NDV declined due to the higher net fair value of debt from lower market
volatility and lower interest rates compared to December 2023 which offset the higher
shareholders equity.
PORTFOLIO ITEMS
Dec 2024
in € millions unless
otherwise indicated
Fair value
1)
as % of total
portfolio
as % of deferred
tax added back
to EPRA NTA per
classification
Portfolio to be held long term
21,523.4
86%
77%
2)
Investment property of assets held for sale
691.8
3%
0%
Retail portfolio
696.4
3%
0%
GCP's Portfolio cities classified as "Others"
896.2
3%
0%
Development rights & Invest portfolio
1,259.3
5%
0%
Total
25,067.1
100%
1)
fair value breakdown according to exact portfolio classification may vary following the main use approach used to
determine the deferred tax
2)
excluding the significant minority share in DTL and others
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EPRA EARNINGS*
Excl. perp.
Year ended December 31,
Year ended December 31,
2024
2023
2024
2023
in € millions
Earnings per IFRS income statement
309.3
(2,426.4)
309.3
(2,426.4)
Property revaluations and capital gains / (losses)
125.4
3,217.5
125.4
3,217.5
Impairment of goodwill
46.0
137.0
46.0
137.0
Changes in fair value of financial assets and liabilities,
buy-backs and early repayment costs, net
0.8
(14.8)
0.8
(14.8)
Deferred tax expense (expense) / income
12.5
(543.1)
12.5
(543.1)
Perpetual notes attribution
(203.4)
(153.4)
-
-
Share of results from investment in equity accounted investees
42.5
149.8
42.5
149.8
Adjustment for investment in equity-accounted investees
1)
58.0
47.1
58.0
47.1
EPRA Earnings contribution to minorities
2)
(119.0)
(115.3)
(134.7)
(128.3)
EPRA Earnings
272.1
298.4
459.8
438.8
Weighted average basic shares (in millions)
3)
1,093.5
1,093.0
1,093.5
1,093.0
EPRA Earnings per share (in €)
0.25
0.27
0.42
0.40
Bridge to FFO I
Add back: Total depreciation and amortization
20.2
17.9
20.2
17.9
Add back: Finance-related costs
30.2
29.2
30.2
29.2
Add back: Other adjustments
5.2
5.3
5.2
5.3
Less: FFO items related to minorities
2)
(8.8)
(11.7)
6.9
1.3
Less: FFO contribution from asset held for sale
(3.4)
(7.1)
(3.4)
(7.1)
Less: Perpetual notes attribution
-
-
(203.4)
(153.4)
FFO I
315.5
332.0
315.5
332.0
FFO I per share (in €)
0.29
0.30
0.29
0.30
1)
including AT‘s share in joint venture positions.
2)
adjusting for the minority share in GCP‘s FFO adjustments
3)
weighted average number of shares excludes shares held in treasury; base for share KPI calculations
(*)
EPRA BPR adjustments not disclosed have a zero value
EPRA Earnings is intended to serve as a key indicator of the
Group’s underlying operational profits for the year in the context
of a European real estate company. Given AT’s strategic joint
venture investments, the proportional share in these joint
venture investments’ EPRA Earnings for the year is included in
accordance with the average holding rate for the period. In line
with the updated change in EPRA’s methodology, AT presents
the updated EPRA Earnings KPI as “EPRA Earnings” and for
enhanced transparency includes a calculation following the
former methodology, presented as “EPRA Earnings Excl. perp.”.
The detailed breakdown as to the change in the calculation
methodology of EPRA Earnings can be found in the Alternative
Performance Measures section of this report. As Funds from
Operations (FFO I) is the widely-recognized industry standard
KPI for operational performance, an additional reconciliation
from both EPRA Earnings calculations to the FFO I is provided
above.
EPRA Earnings amounted to €272 million in 2024, decreasing
by 9% compared to €298 million in 2023. EPRA Earnings per
share amounted to €0.25 in 2024, lower by 7% compared to
€0.27 per share in 2023. The decrease was mainly due to higher
perpetual notes attribution, higher finance expenses, slightly
higher minorities, and higher finance-related costs, offset by
the operational growth despite net disposals, driven by solid
like-for-like rental growth, lower property operating expenses,
and additionally supported by a higher contribution from equity
accounted investees.
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EPRA LTV
Dec 2024
in € millions
Consolidated
(as reported)
Share of joint
ventures
Material non-
controlling interests
Proportionate
consolidation
Total financial debt
1)
14,512.0
653.1
(1,826.0)
13,339.1
Foreign currency derivatives
(144.0)
-
3.0
(141.0)
Equity attributable to perpetual notes investors
4,540.6
-
(462.4)
4,078.2
EPRA Gross debt
18,908.6
653.1
(2,285.4)
17,276.3
Less:
Cash and liquid assets
1)
(3,642.1)
(113.6)
610.1
(3,145.6)
EPRA Net debt
15,266.5
539.5
(1,675.3)
14,130.7
Investment property (incl. advance payments and excl. right-of-use assets)
24,248.6
1,137.7
(3,536.9)
21,849.4
Investment property of assets held for sale
691.8
10.9
(98.0)
604.7
Owner-occupied property
101.9
-
(18.1)
83.8
Intangibles as per the IFRS balance sheet
21.8
-
(1.8)
20.0
Net receivables
1)
96.6
68.4
(45.8)
119.2
Financial assets
784.3
296.5
(54.9)
1,025.9
EPRA Total property value
25,945.0
1,513.5
(3,755.5)
23,703.0
Real Estate Transfer Tax (RETT)
1,801.5
80.7
(214.8)
1,667.4
EPRA Total property value (including RETT)
27,746.5
1,594.2
(3,970.3)
25,370.4
EPRA LTV
58.8%
59.6%
EPRA LTV (including RETT)
55.0%
55.7%
EPRA LTV*
1)
including balances under held for sale
(*)
EPRA BPR adjustments not disclosed have a zero value, adjustment for share of material associates not shown and has zero value
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EPRA LTV
Dec 2023
in € millions
Consolidated
(as reported)
Share of joint
ventures
Material non-
controlling interests
Proportionate
consolidation
Total financial debt
1)
14,242.1
686.9
(1,801.4)
13,127.6
Foreign currency derivatives
(84.2)
-
18.7
(65.5)
Equity attributable to perpetual notes investors
4,756.9
-
(461.6)
4,295.3
EPRA Gross debt
18,914.8
686.9
(2,244.3)
17,357.4
Less:
Cash and liquid assets
1)
(3,026.1)
(129.7)
512.3
(2,643.5)
EPRA Net debt
15,888.7
557.2
(1,732.0)
14,713.9
Investment property (incl. advance payments and excl. right-of-use assets)
24,506.1
1,161.5
(3,499.7)
22,167.9
Investment property of assets held for sale
408.3
15.3
(78.2)
345.4
Owner-occupied property
2)
75.0
-
(17.8)
57.2
Intangibles as per the IFRS balance sheet
21.9
-
(2.1)
19.8
Net receivables
1)
155.6
75.1
(63.0)
167.7
Financial assets
1,027.2
444.8
(48.2)
1,423.8
EPRA Total property value
26,194.1
1,696.7
(3,709.0)
24,181.8
Real Estate Transfer Tax (RETT)
1,770.0
84.7
(204.1)
1,650.6
EPRA Total property value (including RETT)
27,964.1
1,781.4
(3,913.1)
25,832.4
EPRA LTV
60.7%
60.8%
EPRA LTV (including RETT)
56.8%
57.0%
EPRA LTV*
1)
including balances under held for sale
2)
Owner-occupied property was reclassified for FY 2023
(*)
EPRA BPR adjustments not disclosed have a zero value, adjustment for share of material associates not shown and has zero value
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The EPRA LTV is a metric that aims to assess the leverage of shareholder equity
within a real estate company. The main difference between EPRA LTV and the Group’s
calculated LTV is the wider categorization of liabilities and assets with the largest
impact coming from the inclusion of perpetual notes as debt, inclusion of financial
assets in the net assets and proportionate consolidation adjustments. Under IFRS, the
Group’s perpetual notes are considered as equity as they do not have a maturity date,
are subordinated to all debt types and do not carry covenants. As a result, the Group
views its LTV metric as a more suitable measure of leverage, as it more closely matches
the LTV under its debt covenants. As of the 2024 Consolidated Annual Report, following
EPRA BPR methodology changes, AT also presents EPRA LTV (including RETT). EPRA
LTV is presented on a fully consolidated (as reported) basis, and on a proportionate
consolidated basis.
EPRA LTV amounted 59.6% as of December 2024, lower compared to 60.8% as of
December 2023. The impact from negative property revaluations, lower financial assets
and net receivables was offset by operational profits, the impacts from disposals,
liability management measures such as the tendered perpetual notes repurchased
at discount and bond buybacks at a slight discount, suspension of dividends, and the
repayment of vendor loans and loans-to-own. EPRA LTV (including RETT) amounted to
55.7% as of December 2024, lower compared to 57.0% as of December 2023.
Berlin
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EPRA NET INITIAL YIELD (NIY) AND ‘TOPPED-UP’ NIY*
The EPRA Net Initial Yield (NIY) is calculated by subtracting the non-recoverable
operating costs from the net rental income as of the end of the period and dividing
the result by the fair value of the full property portfolio plus an allowance for estimated
purchasers’ costs. EPRA ‘Topped-up’ NIY is an additional calculation that factors into
consideration the effects of rent-free period and other lease incentives. Given the
strategic investment in joint venture positions, they are proportionately consolidated
in accordance with the holding rate at the end of the period.
The EPRA NIY was 4.0% as of December 2024, stable compared to 4.0% as of December
2023. The yield was mainly driven by the like-for-like rental growth of 2.9% while
recording a small amount of property devaluations, partially offset by disposals of
assets with higher-than-average yields. Additionally, the lower cost margin, also
reflected in the lower EPRA cost ratios, impacted the EPRA NIY. These impacts were
offset by a smaller share of the portfolio classified as Development rights & invest as
well as a higher allowance for estimated purchasers’ costs impacting the grossed up
complete property portfolio value. EPRA ‘Topped-up’ NIY amounted to 4.1% as of year-
end 2024, also stable compared to 4.1% as of year-end 2023.
Dec 2024
Dec 2023
in € millions
Investment property
24,375.3
24,632.4
Investment property of assets held for sale
691.8
408.3
Share of JV investment property
1)
1,078.6
1,103.3
Less: Classified as Development rights & Invest
(1,716.8)
(1,891.8)
Complete property portfolio
24,428.9
24,252.2
Allowance for estimated purchasers' costs
1)
1,845.0
1,784.5
Grossed up complete property portfolio value
26,273.9
26,036.7
End of period annualized net rental income
1)
1,239.5
1,233.9
Operating costs
2)
(186.4)
(189.9)
Annualized net rent, after non-recoverable costs
1,053.1
1,044.0
Notional rent expiration of rent-free periods or
other lease incentives
12.7
12.6
Topped-up net annualized rent
1,065.8
1,056.6
EPRA NIY
4.0%
4.0%
EPRA 'TOPPED-UP' NIY
4.1%
4.1%
1)
including AT‘s share in joint venture positions
2)
to reach annualized operating costs, cost margins were used for each respective period
(*)
EPRA BPR adjustments not disclosed have a zero value
Frankfurt
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EPRA VACANCY
EPRA Vacancy is an operational measure that calculates a real estate company’s
economic vacancy rate as based on the prevailing market rental rates. It is calculated by
dividing the market rental value of the vacant space in the portfolio by the annualized
rental value of the portfolio, including vacancy at market rents. The EPRA Vacancy
including JV further includes AT’s share in joint venture investments, including its
holding in Globalworth, the leading publicly listed office landlord in Central and Eastern
European markets, mainly in Warsaw and Bucharest.
EPRA Vacancy stood at 7.5% as of December 2024, lower compared to 7.9% as of
December 2023, mainly due to disposals of assets with above average vacancy levels
and repositioning and conversion efforts of hotel and office assets. EPRA Vacancy
including JV also reduced to 7.9% as of December 2024, compared to 8.1% as of
December 2023 with the slight decline in occupancy in joint ventures offsetting some
of reduction in vacancy.
EPRA VACANCY INCLUDING JV
Dec 2024
Dec 2023
in € millions
Estimated Rental Value (ERV) of the vacant space including JV
1)
104.6
106.9
Dec annualized net rent including vacancy rented at ERV
including JV
1)
1,324.9
1,322.7
EPRA VACANCY INCLUDING JV
7.9%
8.1%
EPRA VACANCY
Dec 2024
Dec 2023
in € millions
Estimated Rental Value (ERV) of the vacant space
93.4
98.4
Dec annualized net rent including vacancy rented at ERV
1,239.7
1,240.7
EPRA VACANCY
7.5%
7.9%
1)
including AT‘s share in joint venture positions
Amsterdam
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Year ended December 31,
2024
2023
in € millions
Acquisitions
421.0
211.5
Investment properties:
Expansion capex
137.6
121.8
Tenant improvements
84.0
95.7
Other capex
124.3
117.1
Total capex
345.9
334.6
EPRA property-related capex
766.9
546.1
The EPRA Cost Ratios provide an overview of a company’s operating cost structure
and provide for increased comparability across companies. The cost ratios are derived
by dividing the administrative expenses and property operating expenses (including
non-recoverable service charges) by the net rental income. The ratio is calculated both
including and excluding the direct vacancy costs. Given the strategic importance of its
joint venture investments, AT includes in its calculations their relative contributions at
the average holding rate during the year.
The EPRA cost ratios were 20.2% including direct vacancy costs and 18.0% excluding
direct vacancy costs in 2024, lower compared to 23.0% and 20.8% in 2023 respectively.
The decrease in the EPRA cost ratios is the result of the like-for-like net rental growth,
efficiency gains, and the disposal of assets with a higher-than-average cost structure.
1)
including AT‘s share in joint venture positions
(*)
EPRA BPR adjustments not disclosed have a zero value
(*)
EPRA BPR adjustments not disclosed have a zero value
Year ended December 31,
2024
2023
in € millions
Administrative and other expenses
65.7
64.7
Maintenance and refurbishment
55.0
49.3
Ancillary expenses and purchased services, net
(13.1)
(0.2)
Personnel expenses
63.0
62.7
Other operating costs
63.7
98.7
Depreciation and amortization
20.2
17.9
Share of equity-accounted investees
1)
22.1
19.5
Exclude:
Depreciation and amortization
(20.2)
(17.9)
EPRA Costs (including direct vacancy costs)
256.4
294.7
Direct vacancy costs
1)
(28.6)
(27.9)
EPRA Costs (excluding direct vacancy costs)
227.8
266.8
Revenue
1,542.3
1,602.8
Less: Operating and other income
(361.4)
(410.0)
Add: Share of net rental income from equity-accounted
investees
1)
87.4
87.0
Net rental income
1,268.3
1,279.8
EPRA Cost Ratio (including direct vacancy costs)
20.2%
23.0%
EPRA Cost Ratio (excluding direct vacancy costs)
18.0%
20.8%
EPRA COST RATIOS*
EPRA CAPITAL EXPENDITURE*
EPRA property-related capex is made up of expenditures made in relation to
acquisitions, expansion capex, tenant improvements and other capex. EPRA property-
related capex amounted to €767 million in 2024, higher by 40% compared to €546
million in 2023, mainly due to the higher amount of additions in the period, resulting in
a higher number of acquisitions for EPRA capex. Further explanations on the additions
and capex can be found in the notes above.
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Alternative
Performance Measures
Aroundtown follows the real estate reporting criteria and provides Alternative Performance
Measures. These measures provide more clarity on the business and enables benchmarking
and comparability to market levels. In the following section, Aroundtown presents a detailed
reconciliation for the calculations of its Alternative Performance Measures.
ADJUSTED EBITDA
The adjusted EBITDA is a performance measure used to evaluate
the operational results of the Group by deducting from the
EBITDA
, which includes the
Total depreciation and amortization
on top of the
Operating profit / (loss)
, non-operational items
such as the
Property revaluations and capital gains / (losses)
and
Share of results from investment in equity accounted investees
,
as well as
Contributions of assets held for sale
. Aroundtown
adds to its adjusted EBITDA a non-recurring and/or non-cash
item called
Other adjustments
which is mainly the expenses
for employees’ share incentive plans. In order to reflect only
the recurring operational profits, Aroundtown excludes the
Share of results from investment in equity accounted investees
as
this item also includes non-operational profits generated by
Aroundtown’s equity accounted investees. Instead, Aroundtown
includes in its adjusted EBITDA its share in the adjusted EBITDA
generated by investments where Aroundtown has significant
influence in accordance with its economic holding rate over the
period. This line item is labelled as
Contribution of joint ventures’
adjusted EBITDA.
Prior to the third quarter of 2021, this line item
was mostly attributed to Aroundtown’s share in GCP’s adjusted
EBITDA, however, starting from July 1, 2021, GCP is consolidated
in Aroundtown’s financial accounts.
Aroundtown created extraordinary expenses for uncollected
hotel rents. Adjusted EBITDA excludes (adds back) these
expenses which are called
Extraordinary expenses for
uncollected hotel rents.
Adjusted EBITDA Calculation
Operating profit / (loss)
1)
(+) Total depreciation and amortization
(=) EBITDA
(-) Property revaluations and capital gains / (losses)
2)
(-) Share of results from investment in equity accounted investees
3)
(+) Other adjustments
4)
(-) Contribution of assets held for sale
5)
(+) Add back: Extraordinary expenses for uncollected hotel rents
6)
(=) Adjusted EBITDA before JV contribution
7)
(+) Contribution of joint ventures‘ adjusted EBITDA
8)
(=) Adjusted EBITDA
1)
Named as „Operating profit“ in FY 2020, 2021 and 2022. Named as „Operating
(loss) / profit“ in FY 2023
2)
Named as „Property revaluations and capital gains“ in FY 2020, 2021 and
2022. Named as „Property revaluations and capital (losses) / gains“ in FY 2023
3)
Named as „Share in profit from investment in equity-accounted investees“ in
FY 2020 and „Share of profit from investment in equity-accounted investees“
in FY 2021 and 2022. Named as „Share of (loss) / profit from investment in
equity accounted investees” in FY 2023
4)
Including expenses related to employees‘ share incentives plans. Named
as „Other adjustments“ in FY 2023 as no one-off expenses related to TLG
merger were recorded in FY 2023. Named as „Other adjustments incl. one-off
expenses related to TLG merger“ after the takeover of TLG in FY 2020, 2021
and 2022.
5)
Named as „Contribution from assets held for sale“ in FY 2020
6)
Named as “Extraordinary expenses for uncollected hotel rents“ in FY 2023.
Named as „Extraordinary expenses for uncollected rent“ in FY 2020, 2021 and
2022. The adjustment started in 2020 after the Covid pandemic in order to
reflect the recurring adjusted EBITDA excluding these extraordinary expenses
7)
Named as „Adjusted EBITDA commercial portfolio, recurring long-term“ in FY 2020
8)
The adjustment is to reflect AT‘s share in the adjusted EBITDA of companies
in which AT has significant influence and that are not consolidated. GCP
contributed to this line item until June 30, 2021. Starting from July 1, 2021,
GCP is consolidated. Named as „Adjustment for GCP‘s and other investments‘
adjusted EBITDA contribution“ in FY 2020
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FUNDS FROM OPERATIONS I (FFO I)
Funds from Operations I (FFO I) is an industry standard
performance indicator for evaluating operational recurring
profits of a real estate firm. Aroundtown calculates
FFO I
by
deducting from the
Adjusted EBITDA before JV contribution
,
the
Finance expenses, Current tax expenses, Contribution to
minorities
and adds back
Adjustments related to assets held for
sale. Adjustments related to assets held for sale
refers to finance
expenses and current tax expenses related to assets held for
sale.
Contribution to minorities
additionally include the minority
share in GCP’s FFO I (starting from July 1, 2021) and the minority
share in TLG’s FFO I excluding the contribution from assets held
for sale. Aroundtown additionally deducts the
Perpetual notes
attribution
to reach at
FFO I before JV contribution
. Prior to 2021,
this figure did not deduct the perpetual notes attribution.
Due to the exclusion of the
Share of results from investment in
equity accounted investees
in the adjusted EBITDA calculation
which includes the operational profits from those investments,
Aroundtown adds back its relative share in the FFO I of joint
venture positions in accordance with the holding rate over the
period to reflect the recurring operational profits generated by
those investments. This item is labelled as
Contribution of joint
ventures’ FFO I
. Prior to the third quarter of 2021, this item was
mostly attributed to Aroundtown’s share in GCP’s FFO I, however,
starting from July 1, 2021, GCP is consolidated in Aroundtown’s
financial accounts. Aroundtown created
Extraordinary expenses
for uncollected hotel rents
. Therefore, Aroundtown’s
FFO I
included these expenses.
FFO I per share
is calculated by dividing the
FFO I
by the
Weighted average basic shares
which excludes the shares held
in treasury.
In FY 2020 and FY 2021, Aroundtown additionally showed
FFO I before extraordinary Covid adjustment
and
FFO I per
share before extraordinary Covid adjustment
(named as
FFO
I before Covid
and
FFO I per share before Covid
in FY 2020),
which excluded the
Extraordinary expenses for uncollected rent
.
Starting from FY 2022, this line item is not shown in the table
to maintain the focus on the main FFO I KPI.
FUNDS FROM OPERATIONS II (FFO II)
Funds from Operations II (FFO II) is an additional measurement
used in the real estate industry to evaluate operational recurring
profits including the impact from disposal activities. To derive
the
FFO II
, the
Results from disposal of properties
are added to the
FFO I
. The results from disposals reflect the profit driven from
the excess amount of the sale price, net of transactions costs, to
cost price plus capex of the disposed properties.
Funds From Operations (FFO I) Calculation
Adjusted EBITDA before JV contribution
(-) Finance expenses
(-) Current tax expenses
(-) Contribution to minorities
1)
(+) Adjustments related to assets held for sale
(-) Perpetual notes attribution
(=) FFO I before JV contribution
2)
(+) Contribution of joint ventures' FFO I
3)
(-) Extraordinary expenses for uncollected hotel rents
4)
(=) FFO I
5)
1)
Including minority share in GCP‘s FFO I (since the consolidation in Q3 2021)
and TLG‘s FFO (since the takeover in Q1 2020)
2)
Named as „FFO I commercial portfolio, recurring long-term“ in FY 2020. In
order to align FFO I better with the market standards, Aroundtown started
deducting perpetual notes attribution from its main FFO I KPI in 2020 and
from this line item in 2021
3)
The adjustment is to reflect AT‘s share in the FFO I of companies in which
AT has significant influence and that are not consolidated. GCP contributed
to this line item until June 30, 2021. Starting from July 1, 2021 GCP is
consolidated. Named as „Adjustment for GCP‘s and other investments‘ FFO I
contribution“ in FY 2020
4)
Named as „Extraordinary expenses for uncollected rent“ in FY 2020, 2021 and 2022.
5)
In order to align this KPI better with market standards, in 2020, Aroundtown
started deducting the perpetual notes attribution from this KPI
1)
Weighted average number of shares excludes shares held in treasury, base for
share KPI calculations. Prior to their conversion, it included the conversion
impact of mandatory convertible notes
2)
In order to align this KPI better with market standards, in 2020, Aroundtown
started deducting the perpetual notes attribution from FFO I
FFO I Per Share Calculation
(c) FFO I
(b) Weighted average basic shares
1)
(=) (c/b) FFO I per share
2)
Funds From Operations II (FFO II) Calculation
FFO I
(+) Result from the disposal of properties
1)
(=) FFO II
2)
1)
The excess amount of the sale price, net of transaction costs and total costs
(cost price and capex of the disposed properties)
2)
In order to align FFO I better with market standards, in 2020, Aroundtown
started deducting the perpetual notes attribution
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LOAN-TO-VALUE (LTV)
The Loan-to-Value (LTV) is a measurement aimed at reflecting the
leverage of a company. The purpose of this metric is to assess the
degree to which the total value of the real estate properties can
cover financial debt and the headroom against a potential market
downturn. With regards to Aroundtown’s internal LTV guidance
due to its conservative financial policy, the LTV shows as well the
extent to which Aroundtown can comfortably raise further debt
to finance additional growth.
Total value
is calculated by adding
together the
Investment property
which includes
Advance payments
and deposits
and starting from FY 2023
Owner-occupied property
but excludes the right-of-use assets,
Investment property of assets
held for sale
and
Investment in equity-accounted investees
which
starting from Dec 2022 include only property related JV’s.
Net
financial debt
is calculated by deducting the
Cash and liquid assets
from the
Total financial debt
which is a sum of
Long and short term
loans and borrowings
and
Long and short term straight bonds
.
Cash
and liquid assets
are the sum of
Cash and cash equivalents, Short-
term deposits
and
Financial assets at fair value through profit or
loss,
as well as cash balances of assets held for sale. Aroundtown
calculates the LTV ratio through dividing the
Net financial debt
by the
Total value
.
RENTAL YIELD AND RENT MULTIPLE
The rental yield and rent multiple are industry standard
indicators to measure the rent generation of a property
portfolio relative to its value and are generally used as key
valuation indicators.
The
Rental yield
is derived by dividing the
End of period
annualized net rental income
, by the
Investment property
. The
End of period annualized net rental income
is the annualized
monthly in-place rent of the related
Investment property
as
at the end of the period. The
Rent multiple
is the inverse of
Rental yield
and is derived by dividing the
Investment property
by the
End of period annualized
net rental income
. As the
assets that classified as
Development rights & invest
do not
generate material rental income, these are excluded from the
calculation.
AT additionally reports rental yield and/or rent multiple on
a more granular basis, such as in its portfolio breakdown
or in relation to specific transactions, to provide enhanced
transparency and comparability on its property portfolio in
specific locations and/or in relation to transaction activity.
LTV Calculation
(+) Investment property
(incl. advance payments and deposits and owner-occupied property
and excl. right-of-use assets)
1)
(+) Investment property of assets held for sale
(+) Investment in equity-accounted investees
2)
(=) (a) Total value
(+) Total financial debt
3)
(-) Cash and liquid assets
4)
(=) (b) Net financial debt
(=) (b/a) LTV
1)
It included inventories - trading property before the item was disposed and
starting in Dec 2023 includes Owner-occupied property
2)
Including property related JV‘s starting from Dec 2022
3)
Total of bank loans, straight bonds and exluding lease liabilities. It included
convertible bonds and schuldscheins prior to their repayment
4)
Including balances under held for sale
1)
Annualized net rent including the contribution from joint venture positions
and excluding the net rent from assets held for sale
1)
Excluding properties classified as Development rights & Invest
UNENCUMBERED ASSETS RATIO
The Unencumbered assets ratio is an additional indicator to
assess Aroundtown’s financial flexibility. As Aroundtown is
able to raise secured debt over the unencumbered asset, a
high ratio of unencumbered assets provides Aroundtown with
additional potential liquidity. Additionally, unencumbered
assets provide debt holders of unsecured debt with a
headroom. Aroundtown derives the
Unencumbered assets
ratio
from the division of
Rent generated by unencumbered
assets
by
Rent generated by the total Group. Rent generated by
unencumbered assets
is the net rent on an annualized basis
generated by assets which are unencumbered, including the
contribution from joint venture positions but excluding the net
rent from assets held for sale. In parallel,
Rent generated by the
total Group
is the net rent on an annualized basis generated by
the total Group including the contribution from joint venture
positions but excluding the net rent from assets held for sale.
EQUITY RATIO
Equity Ratio
is the ratio of
Total Equity
divided by
Total Assets
, each
as indicated in the consolidated financial statements. Aroundtown
believes that Equity Ratio is useful for investors primarily to
indicate the long-term solvency position of Aroundtown.
Equity Ratio Calculation
(a) Total Equity
(b) Total Assets
(=) (a/b) Equity Ratio
Rental Yield and Rent Multiple Calculation
(a) End of period annualized net rental income
1)
(b) Investment property
1)
(=) (a/b) Rental yield
(=) (b/a) Rent multiple
Unencumbered Assets Ratio Calculation
(a) Rent generated by unencumbered assets
1)
(b) Rent generated by the total Group
1)
(=) (a/b) Unencumbered Assets Ratio
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INTEREST COVER RATIO (ICR)
The Interest Cover Ratio (ICR) is widely used in the real
estate industry to assess the strength of a firm’s credit profile.
The multiple indicates the degree to which Aroundtown’s
operational results are able to cover its debt servicing costs.
ICR
is calculated by dividing the
Adjusted EBITDA
including the
contributions from assets held for sale by the
Finance expenses
.
ICR previously included the contribution from joint venture
positions in both the finance expenses and adjusted EBITDA but
it was reclassified during 2021 to exclude these contributions in
order to reflect the interest cover ratio of the Group’s standalone
operations excluding its joint venture investments, as well as
to simplify this KPI. Aroundtown additionally provides the
ICR, including extraordinary expenses for uncollected hotel rents
and which was previously reported as
ICR, Covid adjusted
and
which is calculated by dividing the
Adjusted EBITDA
including
extraordinary expenses for uncollected hotel rents and the
contributions from assets held for sale by the
Finance expenses.
1)
Previously included contributions from joint venture positions and named as
„Group finance expenses“ in FY 2020
2)
Including the contributions from assets held for sale and previously included
contributions from joint venture positions
ICR Calculation
(a) Finance expenses
1)
(b) Adjusted EBITDA
2)
(=) (b/a) ICR
1)
Previously included contributions from joint venture positions and named as
„Group finance expenses“ in FY 2020
2)
Including the contributions from assets held for sale and previously included
contributions from joint venture positions
3)
Named as ICR, Covid adjusted in FY 2022
4)
Including extraordinary expenses for uncollected hotel rents.
ICR, Including Extraordinary Expenses for Uncollected Hotel Rents Calculation
(a) Finance expenses
(c) Adjusted EBITDA
2) 4)
(=) (c/a) ICR, including extraordinary expenses for uncollected hotel rents
3)
EPRA NAV KPI’S
EPRA NET REINSTATEMENT VALUE (EPRA NRV)
The EPRA NRV is defined by the European Public Real Estate
Association (EPRA) as a measure to highlight the value of a
company’s net assets on a long-term basis, assuming entities
never sell assets. This KPI aims to represent the value required
to rebuild the company. Aroundtown’s
EPRA NRV
calculation
begins by adding to the
Equity attributable to the owners
of the Company
the
Deferred tax liabilities
which includes
balances in assets held for sale and excludes significant
minority share in deferred tax liabilities, as well as excluding
deferred tax assets on certain financial instruments in line
with EPRA recommendations. Aroundtown also adds/deducts
Fair value measurement of derivative financial instruments
which includes the derivative financial instruments related
to interest hedging and excludes significant minority
share
in derivative financial instruments. These items are
added back in line with EPRA’s standards as they are not
expected to materialize on an ongoing
and
long-term
basis. Aroundtown
then
deducts the
Goodwill in relation to
TLG, Goodwill in relation to GCP
and adds
Real estate transfer
tax
which is the gross purchasers’ costs in line with EPRA’s
standards which includes Aroundtown’s
share in TLG’s and
GCP’s relevant real estate transfer taxes (RETT).
Following the
consolidation of GCP, the goodwill recognized in relation
to GCP became
relevant
for
EPRA NRV calculations.
EPRA
NRV per share
is calculated by dividing the
EPRA NRV
by the
Number of shares
which excludes the treasury shares.
The EPRA NAV was discontinued by EPRA starting from FY
2020. Following EPRA guidelines, Aroundtown provided
the bridge between the former EPRA NAV and the new
EPRA NRV in its FY 2020 report and discontinued reporting
EPRA NAV thereafter. The main difference between the
former EPRA NAV and the EPRA NRV is the addition of real
estate transfer taxes in the EPRA NRV.
1)
Excluding significant minority share in deferred tax liabilities (DTL), as well
as deferred tax assets on certain financial instruments in line with EPRA
recommendations, including DTL of assets held for sale
2)
Excluding significant minority share in derivatives
3)
Deducting the goodwill resulting from the business combination with TLG
4)
Deducting the goodwill resulting from the consolidation of GCP
5)
Including the gross purchasers‘ costs of assets held for sale and relative
share in TLG’s and GCP‘s relevant RETT
6)
Excluding shares in treasury, base for share KPI calculations. Prior to their
conversion, it included the conversion impact of mandatory convertible notes
EPRA NRV and EPRA NRV Per Share Calculation
Equity attributable to the owners of the Company
(+) Deferred tax liabilities
1)
(+/-) Fair value measurement of derivative financial instruments
2)
(-) Goodwill in relation to TLG
3)
(-) Goodwill in relation to GCP
4)
(+) Real estate transfer tax
5)
(=) (a) EPRA NRV
(b) Number of shares (in millions)
6)
(=) (a/b) EPRA NRV per share
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1)
Excluding significant minority share in deferred tax liabilities (DTL), as well
as deferred tax assets on certain financial instruments in line with EPRA
recommendations
2)
Excluding significant minority share in derivatives
3)
Deducting the goodwill resulting from the business combination with TLG
4)
Deducting the goodwill resulting from the consolidation of GCP. Prior to the
consolidation of GCP as of July 1, 2021, there was an adjustment related to
surplus on investment in GCP, named as „Goodwill as per the IFRS balance
sheet (related to GCP surplus)“
5)
Excluding significant minority share in intangibles
6)
Changed in Dec 2022 to exclude RETT
7)
Including only the gross purchasers‘ costs of properties where RETT
optimization at disposal can be achieved. Additionally including relative share
in GCP‘s relevant RETT
8)
Previously defined as „EPRA NTA“ or „EPRA NTA per share“ in FY 2020 and
FY 2021
9)
Excluding shares in treasury, base for share KPI calculations. Prior to their
conversion, it included the conversion impact of mandatory convertible notes
EPRA NTA (& per share) and EPRA NTA with RETT (& per share) Calculation
Equity attributable to the owners of the Company
(+) Deferred tax liabilities
1)
(+/-) Fair value measurement of derivative financial instruments
2)
(-) Goodwill in relation to TLG
3)
(-) Goodwill in relation to GCP
4)
(-) Intangibles as per the IFRS balance sheet
5)
(=) (a) EPRA NTA
6)
(+) (b) Real estate transfer tax
7)
(=) (c=a+b) EPRA NTA with RETT
8)
(a) EPRA NTA
6)
(d) Number of shares (in millions)
9)
(=) (a/d) EPRA NTA per share
6)
(c) EPRA NTA with RETT
8)
(d) Number of shares (in millions)
9)
(=) (c/d) EPRA NTA with RETT per share
8)
EPRA NET TANGIBLE ASSETS (EPRA NTA)
AND EPRA NTA with RETT
The EPRA NTA is defined by the European Public Real Estate
Association (EPRA) as a measure to highlight the value of a
company’s net tangible assets assuming entities buy and sell
assets, thereby crystallizing certain levels of unavoidable
deferred taxes. Aroundtown’s
EPRA NTA
calculation begins
by adding to the
Equity attributable
to
the owners of the
Company
the
Deferred tax liabilities
which excludes the
deferred tax liabilities of properties held for sale, retail
portfolio, development rights & invest portfolio, GCP’s
portfolio cities classified as “Others” and significant minority
share in deferred tax liabilities, as well as excluding deferred
tax assets on certain financial instruments in line with EPRA
recommendations. Aroundtown also adds/deducts
Fair
value measurement of derivative financial instruments
which
includes the derivative financial instruments related to
interest hedging and excludes significant minority share in
derivative financial instruments. Furthermore, Aroundtown
deducts the
Goodwill in relation to TLG, Goodwill in relation
to GCP
and
Intangibles as per the IFRS balance sheet
which
excludes significant minority share in intangibles. The
EPRA
NTA
was reclassified in Dec 2022 to exclude
RETT
in order
to align better with market standards. The
EPRA NTA per
share
is calculated by dividing the
EPRA NTA
by the
Number
of shares
which excludes the treasury shares. The
EPRA NTA
with RETT
adds gross purchasers’ cost of properties which
enable RETT optimization at disposal based on track record,
including the relative share in GCP’s relevant RETT. The
EPRA NTA with RETT per share
is calculated by dividing the
EPRA NTA with RETT
by
Number of shares
.
EPRA NET DISPOSAL VALUE (EPRA NDV)
The EPRA NDV is defined by the European Public Real
Estate Association (EPRA) as a measure that represents
the shareholders’ value under a disposal scenario, where
deferred taxes, financial instruments and certain other
adjustments are calculated to the full extent of their liability,
net of any resulting tax. Aroundtown calculates its
EPRA
NDV
by deducting from the
Equity attributa
ble to the owners
of the Company
, the
Goodwill in relation to TLG
and
Goodwill
in relation to GCP
and deducting/adding the
Net fair value
of debt
which is the difference between the market value
of debt and the book value of debt, adjusted for taxes. The
EPRA NDV per share
is calculated by dividing the
EPRA NDV
by the
Number of shares
which excludes the treasury shares.
The EPRA NNNAV was discontinued by EPRA starting from FY
2020. Following EPRA guidelines, Aroundtown provided the
bridge between the former EPRA NNNAV and the new EPRA
NDV in its FY 2020 report and discontinued reporting EPRA
NNNAV thereafter. The main difference between the former
EPRA NNNAV and the EPRA NDV is the exclusion of deferred
tax liabilities in the EPRA NDV and goodwill related to GCP
surplus prior to the consolidation of GCP as of July 1, 2021.
1)
Deducting the goodwill resulting from the business combination with TLG
2)
Deducting the goodwill resulting from the consolidation of GCP. Prior to the
consolidation of GCP as of July 1, 2021, there was an adjustment related to
surplus on investment in GCP, named as „Goodwill as per the IFRS balance
sheet (related to GCP surplus)“
3)
Excluding shares in treasury, base for share KPI calculations. Prior to their
conversion, it included the conversion impact of mandatory convertible notes
EPRA NDV and EPRA NDV Per Share Calculation
Equity attributable to the owners of the Company
(-) Goodwill in relation to TLG
1)
(-) Goodwill in relation to GCP
2)
(+/-) Net fair value of debt
(=) (a) EPRA NDV
(b) Number of shares
3)
(=) (a/b) EPRA NDV per share
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1)
The components are described under the LTV section
2)
Starting in Dec 2023, Investment property under the LTV section was changed to
include Owner-occupied property which is added separately below in EPRA LTV
3)
If Net receivables are larger than Net payables in absolute values, the netted sum
is shown in EPRA Total property value, otherwise in EPRA Net debt
4)
Following EPRA guidelines, Aroundtown adds its share of joint ventures and
deducts material non-controlling interests relating to GCP and TLG for all items
where relevant
(*)
EPRA BPR adjustments not disclosed have a zero value
EPRA LOAN-TO-VALUE (EPRA LTV)
The EPRA LTV is a metric that aims to assess the leverage of
shareholder equity within a real estate company. The main
difference between EPRA LTV and the Company’s calculated
LTV is the wider categorization of liabilities and assets with
the largest impact coming from the inclusion of perpetual
notes as debt, inclusion of financial assets in the net assets
and proportionate consolidation adjustments.
EPRA LTV
is calculated by dividing the
EPRA Net debt
by
EPRA Total
property value.
EPRA Net debt
is derived by deducting
Cash
and liquid assets
from
EPRA Gross debt
.
Cash and liquid assets
are defined under LTV section above.
EPRA Gross debt
is the
sum of
Total financial debt
described under LTV section above,
an adjustment related to
Foreign currency derivatives
,
Equity
attributable to perpetual notes investors
and
Net payables
.
EPRA Total property value
is the sum of
Investment property
which includes
Advance payments and deposits
but excludes
the right-of-use assets,
Investment property of assets held
for sale
,
Owner-occupied property
,
Intangibles as per the IFRS
balance sheet
,
Net receivables
and
Financial assets
.
Net payables
or
Net receivables
is the sum of
Trade and other receivables
and
Long term financial investments and other assets
(both of
which excluding loans-to-own assets and vendor loans), net
of
Trade and other payables, Long term financial liabilities and
other payables
(excluding lease liabilities),
Tax payable
and
Provisions for other liabilities
and
accrued expenses
, including
balances in held for sale.
If
Net receivables
are larger than
Net
payables
in absolute values, the netted sum is shown in
EPRA
Total property value
, otherwise in
EPRA Net debt
.
Financial assets
are the sum of loans-to-own assets and vendor loans. The
calculation above reaches at
EPRA LTV – Consolidated (as
reported)
. Following EPRA guideline, Aroundtown adds its
Share of joint ventures
and deducts
Material non-controlling
interests
relating to GCP and TLG for all respective items
where relevant which results in
EPRA LTV – Proportionate
consolidation
also named as
EPRA LTV
.
EPRA LTV Calculation
(*)
(+) Total financial debt
1)
(+/-) Foreign currency derivatives
(+) Equity attributable to perpetual notes investors
(+) Net payables
3)
(=) EPRA Gross debt
(-) Cash and liquid assets
1)
(=) (a) EPRA Net debt
(+) Investment property
2)
(+) Investment property of assets held for sale
(+) Owner-occupied property
(+) Intangibles as per the IFRS balance sheet
(+) Net receivables
3)
(+) Financial assets
(=) (b) EPRA Total property value
(=) (a/b) EPRA LTV
4)
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EPRA EARNINGS
The EPRA Earnings is defined by the European Public Real
Estate Association (EPRA) as the earnings from operational
activities and serves as an indicator of a company’s
underlying operational profits for the period in context of
a European real estate company. Aroundtown calculates
its
EPRA Earnings
by deducting from the
Earnings per IFRS
income statement
, the
Property revaluations and capital gains
/ (losses)
and
Impairment of goodwill,
non-cash and non-
linear profit or loss items
,
adding back
Changes in fair value of
financial assets and liabilities, buy-backs and early repayment
costs, net
a non-cash and non-operational expense item,
taking out
Deferred tax (expense) / income
deducting
the
Share of results from investment in equity accounted
investees
and adding
back their recurring earnings called
Adjustment for investment
in equity-accounted investees
and
deducting
EPRA Earnings contribution to minorities
. With regard
to
Adjustment for investment in equity-accounted investees
,
given Aroundtown’s strategic joint
venture investments,
the proportional share in these joint venture investments’
EPRA Earnings for the year is included in accordance
with the average holding rate throughout the year. Prior
to the third quarter of 2021, these contributions were
mostly attributed to GCP. Starting from July 1, 2021, GCP
is consolidated in AT’s financial accounts and the minority
share in GCP’s EPRA Earnings is deducted instead.
EPRA
updated the BPR guidelines in September 2024, introducing
an updated methodology for calculating EPRA Earnings.
The updated methodology includes now an Adjustment for
perpetual notes attribution, starting FY 2024.
EPRA Earnings per share
is calculated by dividing the
EPRA
Earnings
by the
Weighted average basic shares
which excludes
the shares held in treasury.
As FFO I is the widely-recognized indicator for a company’s
operational performance, an additional reconciliation is
provided from the
EPRA Earnings
to the
FFO I
. In this regard,
on top of
EPRA Earnings, Total depreciation and amortization,
Finance-related costs
and
Other adjustments
are added back.
Other adjustments
are made up of share-based payments
and previously included one-off expenses related to TLG
merger. Furthermore,
FFO items related to minorities and FFO
contribution from assets held for sale
are deducted.
FFO items
related to minorities
refers to Aroundtown’s share in GCP’s
FFO I bridge adjustment for its depreciation, finance-related
costs and other FFO adjustments, additionally adjusting for
the minority share in these adjustments starting from the
third quarter of 2021. In-line with the updated EPRA Earnings
methodology, which now includes the Adjustment for perpetual
notes attribution, such adjustment is no longer required in the
bridge. In accordance with the EPRA guidelines, AT reports the
updated EPRA Earnings KPI under EPRA Earnings while also
providing the previous calculation methodology under EPRA
Earnings (excl. perp.) for reference.
EPRA Earnings and EPRA Earnings Per Share Calculation
(*)
Earnings per IFRS income statement
(-) Property revaluations and capital gains / (losses)
1)
(-) Impairment of goodwill
(-) Changes in fair value of financial assets and liabilities, buy-backs and
early repayment costs, net
2)
(-) Deferred tax (expense) / income
3)
(-) Perpetual notes attribution
4)
(-) Share of results from investment in equity accounted investees
5)
6)
(+) Adjustment for investment in equity-accounted investees
6) 7)
(-) EPRA Earnings contribution to minorities
8)
(=) (a) EPRA Earnings
(b) Weighted average basic shares
9)
(=) (a/b) EPRA Earnings per share
1)
Named as „Fair value adjustments, capital gains and other income“ in FY
2017, and „Property revaluations and capital gains“ in FY 2018, 2019, 2020,
2021 and 2022. Named as „Property revaluations and capital (losses) / gains“
in FY 2023
2)
Named as „Changes in fair value of financial assets and liabilities, net“ in FY
2017, 2018, 2019, 2020 and 2021
3)
Named as „Deferred tax expense“ in FY 2017, 2018, 2019, 2020 and 2021.
Named as „Deferred tax income (expenses)“ in FY 2022 and „Deferred tax
income“ in FY 2023
4)
Following EPRA methodology update Adjustment for perpetual notes
attribution is included in the EPRA Earnings calculation starting FY 2024
5)
Named as „Share in profit from investment in equity-accounted investees“
in FY 2017, 2018, 2019 and 2020,
„Share of profit from investment in equity
accounted investees“ in FY 2021 and 2022, and „Share of (loss) / profit from
investment in equity accounted investees“ in FY 2023
6)
In FY 2017, 2018 and 2019, share of profit from investment in equity-
accounted investees and adjustment for investment in equity-accounted
investees were summed up and presented in a single line item called
„Adjustments for investment in equity-accounted investees“
7)
Including AT‘s share in joint venture positions. GCP contributed to this line
item until June 30, 2021. Starting from July 1, 2021 GCP is consolidated.
8)
Additionally adjusting for the minority share in GCP‘s FFO to EPRA Earnings
bridge. Named as „Contribution from minorities“ in FY 2017 and „Contribution
to minorities“ in FY 2018, 2019 and 2020
9)
Weighted average number of shares excludes shares held in treasury,
base for share KPI calculations. Prior to their conversion, it included the
conversion impact of mandatory convertible notes
(*)
EPRA BPR adjustments not disclosed have a zero value
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EPRA NET INITIAL YIELD (NIY) AND EPRA
‘TOPPED-UP’ NIY
The EPRA Net Initial Yield (NIY) and EPRA ‘Topped-up’ NIY are
comparable yield measures provided by EPRA for portfolio
valuations. The
EPRA NIY
calculation begins by subtracting
the non-recoverable
Operating costs
from
End of period
annualized net rental income
which includes Aroundtown’s
share in joint venture positions’ net rental income and net
rental income from assets held for sale. In order to reach
annualized operating costs, Aroundtown uses cost margins
for each respective periods. This
Annualized net rent, after
non-recoverable costs
is divided by the
Grossed up complete
property portfolio value
which is the sum of
Complete property
portfolio
and
Allowance for estimated purchasers’ costs
. The
Complete property portfolio
is the sum of
Investment property,
Investment property of assets held for sale
and
Share of JV
investment property
, excluding the part of the portfolio that
is
Classified as Development rights & Invest
. On the other hand,
EPRA ‘Topped-up’ NIY
divides the
Topped-up net annualized rent
which includes additionally
Notional rent expiration of rent-
free periods or other lease incentives
by the
Grossed up complete
property portfolio value
.
EPRA VACANCY
The EPRA Vacancy is a key benchmark for providing
comparable vacancy reporting across real estate companies.
Around
town provides
EPRA Vacancy
and
EPRA Vacancy including
JV
.
EPRA
Vacancy
is calculated by dividing the
Estimated Rental
Value (ERV) of the vacant space
by the
Dec annualized net rent
including vacancy rented at ERV
. This figure was previously
defined as EPRA Vacancy - Commercial portfolio but it was
renamed following the consolidation of GCP as of July 1,
2021.
EPRA Vacancy including JV
includes the contribution
from joint venture positions and is calculated by dividing
the
Estimated Rental
Value (ERV) of the vacant space including
JV
by the
Dec annualized net rent including vacancy rented at
ERV including JV
. This figure
was previously defined as EPRA
Vacancy - Group portfolio.
1)
Named as „Investment properties of assets held for sale“ in FY 2017, 2018 and 2019
2)
Named as „Share of GCP investment property“ in FY 2017
3)
Named as „Classified as development rights and new buildings“ in FY 2018 and
2019. Prior to that, such classification did not exist
4)
Including AT‘s share in joint venture positions
5)
Including the net rent contribution of assets held for sale
6)
To reach annualized operating costs, cost margins were used for each respective
periods
(*)
EPRA BPR adjustments not disclosed have a zero value
EPRA NIY and ´TOPPED-UP´ NIY Calculation
(*)
(+) Investment property
(+) Investment property of assets held for sale
1)
(+) Share of JV investment property
2)
(-) Classified as Development rights & Invest
3)
(=) Complete property portfolio
(+) Allowance for estimated purchasers' costs
4)
(=) (a) Grossed up complete property portfolio value
(+) End of period annualized net rental income
4) 5)
(-) Operating costs
6)
(=) (b) Annualized net rent, after non-recoverable costs
(+) Notional rent expiration of rent-free periods or other
lease incentives
(=) (c) Topped-up net annualized rent
(=) (b/a) EPRA NIY
(=) (c/a) EPRA 'TOPPED-UP' NIY
1)
Named as „Estimated Rental Value (ERV) of the vacant space - Group portfolio“
in FY 2020. The breakdown of the calculation wasn‘t provided prior to that
2)
Named as „Dec annualized net rent including vacancy rented at ERV - Group
portfolio“ in FY 2020. The breakdown of the calculation wasn‘t provided prior
to that
3)
Named as „EPRA Vacancy - Group portfolio“ in FY 2017, 2018, 2019 and 2020
4)
Named as „Estimated Rental Value (ERV) of the vacant space - Commercial
portfolio“ in FY 2020. The breakdown of the calculation wasn‘t provided prior
to that
5)
Named as „Dec annualized net rent including vacancy rented at ERV - Com
-
mercial portfolio“ in FY 2020. The breakdown of the calculation wasn‘t pro
-
vided prior to that
6)
Named as „EPRA Vacancy - Commercial portfolio“ in FY 2017, 2018, 2019 and
2020
EPRA Vacancy Including JV Calculation
(a) Estimated Rental Value (ERV) of the vacant space including JV
1)
(b) Dec annualized net rent including vacancy rented at ERV including JV
2)
(=) (a/b) EPRA Vacancy including JV
3)
EPRA Vacancy Calculation
(c) Estimated Rental Value (ERV) of the vacant space
4)
(d) Dec annualized net rent including vacancy rented at ERV
5)
(=) (c/d) EPRA Vacancy
6)
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EPRA Cost Ratios Calculation
(*)
(+) Administrative and other expenses
(+) Maintenance and refurbishment
(+) Ancillary expenses and purchased services, net
1) 2)
(+) Personnel expenses
2)
(+) Other operating costs
2)
(+) Depreciation and amortization
2)
(+) Share of equity-accounted investees
3)
Exclude:
4)
(-) Depreciation and amortization
(=) (a) EPRA Costs (including direct vacancy costs)
(-) (b) Direct vacancy costs
3)
(=) (c=a-b) EPRA Costs (excluding direct vacancy costs)
(+) Revenue
(-) Operating and other income
(+) Share of net rental income from equity-accounted investees
3)
(=) (d) Net rental income
4)
(=) (e=a/d) EPRA Cost Ratio (including direct vacancy costs)
(=) (f=c/d) EPRA Cost Ratio (excluding direct vacancy costs)
1)
Named as „Net Ancillary expenses and purchased services“ in FY 2019 and
FY 2020
2)
These items were summed up and presented together as „Operational
expenses“ in FY 2017 and FY 2018
3)
Including AT‘s share in joint venture positions. GCP contributed to this line
item until June 30, 2021. Starting from July 1, 2021 GCP is consolidated
4)
Prior to IFRS 16 reclassification, ground rents were excluded from EPRA
Costs in FY 2017 and 2018. Following the reclassification, ground rents are
no longer part of operating expenses
(*)
EPRA BPR adjustments not disclosed have a zero value
(*)
EPRA BPR adjustments not disclosed have a zero value
EPRA COST RATIOS
The EPRA Cost Ratios are key benchmarks provided by
Aroundtown in line with EPRA guidelines in order to enable
meaningful measurement of changes in its operating costs,
as well as to provide for
increased
comparability across
companies. The
EPRA
Costs
is derived by adding together the
Administrative and other expenses, Maintenance and refurbishment,
Ancillary expenses and purchased services, net, Personnel expenses,
Other operating costs
and
Share of equity-accounted investees
which refers to Around
town’s share in joint venture positions’
EPRA costs (including direct vacancy costs). Prior to the third
quarter of 2021, these contributions were mostly attributed
to GCP. Starting from July 1, 2021, GCP is consolidated in
Aroundtown’s financial accounts. The EPRA Costs exclude
Depreciation and amortization
if includ
ed above and include
Extraordinary expenses for uncollected hotel rents
. To reach
EPRA Cost Ratio (including direct vacancy costs)
, the sum is
then divided by the
Net rental income
, which is derived by
deducting from the
Revenue
, the
Operating and other income
but
adding
Share of net rental income from equity-accounted investees
,
reflecting Aroundtown’s share in
joint venture positions’ net
rental income. Similar to the EPRA Costs, prior to the third
quarter of 2021, these contributions from joint venture
positions were mostly attributed to GCP. Starting from July 1,
2021, GCP is consolidated in Aroundtown’s financial accounts.
The
EPRA Cost Ratio (excluding direct vacancy costs)
is derived by
dividing the
EPRA Costs (excluding direct vacancy costs)
, which
deducts
Direct vacancy costs
(including Aroundtown’s share in
joint venture positions’ direct vacancy costs)
from
EPRA Costs
(including direct vacancy costs)
, by the
Net rental
income
.
EPRA CAPITAL EXPENDITURE
The EPRA capital expenditure disclosure aims to provide
a detailed analysis of the Company’s capital expenditures.
Acquisitions
represent the amount spent for the purchase
of investment properties including capitalized transaction
costs.
Expansion
capex represent projects that are targeted at
creating additional income drivers or significant value creation
potential which result in additional lettable space or significant
enhancement of the existing space. Additionally includes
GCP’s pre-letting modification and modernization capex.
Tenant improvements
represent fit-out works that are targeted
at retaining existing tenants and/or attracting new tenants,
increasing the quality of the asset and the tenant structure.
Other
capex
represent ongoing capital expenditures that are targeted
at sustaining the high quality of assets as well as improving
sustainability standards to reduce energy consumption, CO
2
emissions, and the associated CO
2
tax, benefitting both AT and its
tenants. These projects include green installations such as solar
panels, combined heat and power engines and electric vehicle
charging stations as well as green refurbishments such as roof,
insulation and lighting replacements. Other capex also includes
GCP’s repositioning capex.
EPRA Property-Related Capex Calculation
(*)
(a) Acquisitions
Investment properties:
(+) Expansion capex
(+) Tenant improvements
(+) Other capex
(=) (b) Total capex
(=) (c=a+b) EPRA property-related capex
AROUNDTOWN
SA
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Board of Directors‘ Report
197
Frank Roseen
Executive Director
Jelena Afxentiou
Executive Director
By order of the Board of Directors, March 26, 2025
Responsibility
statement
To the best of our knowledge, the consolidated financial statements of
Aroundtown SA, prepared in accordance with the applicable reporting
principles for financials statements, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group, and the
management report of the Group includes a fair review of the development
of the business, and describes the main opportunities, risks, and uncertainties
associates with the Group.
Disclaimer
The financial data and results of the Group are affected by financial
and operating results of its subsidiaries. Significance of the information
presented in this report is examined from the perspective of the Company
including its portfolio with the joint ventures. In several cases, additional
information and details are provided in order to present a comprehensive
representation of the subject described, which in the Group’s view is
essential to this report.
AROUNDTOWN
SA
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Consolidated Financial Statements
198
Tuscany
02
Consolidated
Financial Statements
AROUNDTOWN
SA
|
Consolidated Financial Statements
200
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of profit or loss
Note
Year ended December 31,
2024
2023
in € millions
Revenue
6
Property revaluations and capital gains / (losses)
7
(125.4 )
(3,217.5 )
Share of results from investment in equity-accounted investees
16
(42.5 )
(149.8 )
Property operating expenses
8
(550.2 )
(638.4 )
Administrative and other expenses
9
(65.7 )
(64.7 )
Operating profit / (loss)
(2,467.6 )
Impairment of goodwill
14
(46.0 )
(137.0 )
Finance expenses
10
(235.2 )
(230.1 )
Other financial results
10
(31.0 )
(14.4 )
Profit / (loss) before tax
(2,849.1 )
Current tax expenses
11.2
(124.5 )
(120.4 )
Deferred tax (expense) / income
11.4
(12.5 )
Profit / (loss) for the year
(2,426.4 )
Profit / (loss) attributable to:
Owners of the Company
(1,987.6 )
Perpetual notes investors
Non-controlling interests
(592.2 )
Profit / (loss) for the year
(2,426.4 )
Net earnings
/ (loss) per share attributable to the owners of the Company (in €)
Basic earnings / (loss) per share
12.1
(1.82 )
Diluted earnings / (loss) per share
12.2
(1.82 )
AROUNDTOWN
SA
|
Consolidated Financial Statements
201
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of other comprehensive income
Note
Year ended December 31,
2024
2023
in € millions
Profit / (loss) for the year
(2,426.4 )
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss, net of tax:
Foreign operations – foreign currency translation difference, net of investment hedges of foreign operations
Cash flow hedges and cost of hedging
(25.4 )
(33.6 )
Items that will not be reclassified to profit or loss, net of tax:
Revaluation of property and equipment
15
(2.9 )
Total comprehensive income for the year
(2,450.8 )
Total comprehensive income attributable to:
Owners of the Company
(2,013.2 )
Perpetual notes investors
Non-controlling interests
(591.0 )
Total comprehensive income for the year
(2,450.8 )
AROUNDTOWN
SA
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Consolidated Financial Statements
202
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of financial position
Note
As at December 31,
2024
2023
in € millions
ASSETS
Investment property
13
Goodwill and intangible assets
14
Property and equipment
15
Investment in equity-accounted investees
16
Advance payments and deposits
Derivative financial assets
25.4.1
Long term financial investments and other assets
17
Deferred tax assets
11.4
Non-current assets
Cash and cash equivalents
25.3.2
Short-term deposits
Financial assets at fair value through profit or loss
25.1
Trade and other receivables
18
Derivative financial assets
25.4.1
Assets held for sale
13.2.2
Current assets
Total assets
AROUNDTOWN
SA
|
Consolidated Financial Statements
203
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of financial position
(continued)
Note
As at December 31,
2024
2023
in € millions
EQUITY
Share capital
19.1.1
Treasury shares
19.1.2
(2,891.0 )
(2,893.3 )
Retained earnings and other reserves
Equity attributable to the owners of the Company
Equity attributable to perpetual notes investors
19.2.1
Equity attributable to the owners of the Company and perpetual notes investors
Non-controlling interests
19.3.1
Total equity
LIABILITIES
Loans and borrowings
21.1
Straight bonds
21.3
Derivative financial liabilities
25.4.1
Long term financial liabilities and other payables
22
Deferred tax liabilities
11.4
Non-current liabilities
Current portion of long-term loans and loan redemptions
21.1
Straight bonds
21.3
Trade and other payables
24
Tax payable
Provisions for other liabilities and accrued expenses
Derivative financial liabilities
25.4.1
Liabilities associated with assets as held for sale
13.2.2
Current liabilities
Total liabilities
Total equity and liabilities
The Board of Directors of Aroundtown SA authorized these consolidated financial statements for issuance on March 26, 2025
Frank Roseen
Executive Director
Jelena Afxentiou
Executive Director
AROUNDTOWN
SA
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Consolidated Financial Statements
204
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of changes in equity
Attributable to the owners of the Company
Share
capital
Share
premium
and capital
reserves
Cash flow
hedge and
cost of hedge
reserves
Treasury
shares
Retained
earnings
Equity
attributable
to the
owners of
the Company
Equity
attributable
to perpetual
notes
investors
Equity
attributable to
the owners of
the Company
and perpetual
notes investors
Non-
controlling
interests
Total
equity
Note
in € millions
Balance as at January 1, 2024
(2,893.3 )
Profit for the year
Other comprehensive income for the year, net of tax
(27.1 )
(9.8 )
(9.8 )
(3.6 )
Total comprehensive income for the year
(27.1 )
Transactions with owners of the Company
Contributions and distributions
Equity settled share-based payment and other effects
(1.0 )
Total contributions and distributions
(1.0 )
Changes in ownership interests
Initial consolidations and deconsolidations
19.3.1
Transactions with and dividends distributed to
non-controlling interests (NCI)
19.3.1
(7.3 )
Total changes in ownership interests
Transactions with perpetual notes investors
Payment to perpetual notes investors
(122.0 )
(122.0 )
(122.0 )
Buyback and exchange of perpetual notes
19.2.2
(66.1 )
(66.1 )
(2,917.6 )
(2,983.7 )
(2,983.7 )
Issuance of perpetual notes
19.2.2
Total transactions with perpetual notes investors
(66.1 )
(66.1 )
(419.7 )
(485.8 )
(485.8 )
Balance as at December 31, 2024
(6.9 )
(2,891.0 )
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Consolidated Financial Statements
205
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of changes in equity
(continued)
Attributable to the owners of the Company
Share
capital
Share
premium
and capital
reserves
Cash flow
hedge and
cost of hedge
reserves
Treasury
shares
Retained
earnings
Equity
attributable to
the owners of
the Company
Equity
attributable
to perpetual
notes
investors
Equity
attributable to
the owners of
the Company
and perpetual
notes investors
Non-
controlling
interests
Total
equity
Note
in € millions
Balance as at January 1, 2023
(3,033.7 )
(Loss) / profit for the year
(1,987.6 )
(1,987.6 )
(1,834.2 )
(592.2 )
(2,426.4 )
Other comprehensive income for the year, net of tax
(39.4 )
(25.6 )
(25.6 )
(24.4 )
Total comprehensive income for the year
(39.4 )
(1,987.6 )
(2,013.2 )
(1,859.8 )
(591.0 )
(2,450.8 )
Transactions with owners of the Company
Contributions and distributions
Settlement of mandatory convertible notes
19.1.4
(138.5 )
Equity settled share-based payment
(1.7 )
Total contributions and distributions
(140.2 )
Changes in ownership interests
Initial consolidations and deconsolidations
19.3.1
Transactions with and dividends distributed to NCI
19.3.1
(150.1 )
(93.2 )
Total changes in ownership interests
(149.9 )
(93.0 )
Transactions with perpetual notes investors
Payment to perpetual notes investors
19.2.2
(118.2 )
(118.2 )
(118.2 )
Buyback of perpetual notes
19.2.2
(26.0 )
(11.9 )
(11.9 )
Total transactions with perpetual notes investors
(144.2 )
(130.1 )
(130.1 )
Balance as at December 31, 2023
(2,893.3 )
AROUNDTOWN
SA
|
Consolidated Financial Statements
206
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of cash flows
Year ended December 31,
2024
2023
Note
in € millions
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (loss) for the year
(2,426.4 )
Adjustments to the profit / (loss):
Depreciation and amortization
14, 15
Property revaluations and capital gains
7
Share of results from investment in equity-accounted investees
16.1
Impairment of goodwill
14
Finance expenses and other financial results
10
Current and deferred tax expenses / (income)
11
(422.7 )
Share-based payment
20.2
Change in working capital
(55.3 )
(58.5 )
Dividend received
16
Tax paid
(112.8 )
(111.4 )
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property, equipment and intangible assets
(19.3 )
(16.2 )
Proceeds from disposals of investment property and proceeds from investees
13.2.1, 16.1
Acquisitions of investment property and associates, investment in capex and advances paid
13.1, 16.1
(492.9 )
(395.6 )
Proceeds from (investments in) traded securities and other financial assets, net
(65.2 )
Net cash from investing activities
AROUNDTOWN
SA
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Consolidated Financial Statements
207
The accompanying notes form an integral part of these consolidated financial statements
Consolidated statement of cash flows
(continued)
Year ended December 31,
2024
2023
Note
in € millions
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of straight bonds
21.3(q)(r)
Buyback and redemption of bonds
21.3.1
(1,193.1 )
(1,128.6 )
Payments to perpetual notes investors and buybacks made
19.2.2
(485.8 )
(126.2 )
Proceeds of loans from financial institutions and others, net of repayments
21.4
Amortization of loans from financial institutions and others
21.4
(21.3 )
(16.6 )
Transactions with non-controlling interests
19.3.1
(3.0 )
(84.4 )
Payments to mandatory convertible notes investors
(5.9 )
Payments in connection with hedge relations, derivatives and others, net
(288.6 )
Interest and other financial expenses paid, net
21.4
(233.3 )
(214.2 )
Net cash used in financing activities
(495.9 )
(1,051.6 )
Net changes in cash and cash equivalents
Cash and cash equivalents as at January 1
Assets held for sale – change in cash
13.2.2
(1.0 )
Effect of changes in foreign exchange rates
(2.0 )
Cash and cash equivalents as at December 31
Notes to the consolidated
financial statements
For the year ended December 31, 2024
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1.1 Incorporation and principal activities
(Société Anonyme), incorporated under the laws of the Grand Duchy of Luxembourg
having its registered office at 37, Boulevard Joseph II, L-1840 Luxembourg (formerly:
Standard of the Frankfurt Stock Exchange and included in the MDAX index of the
Deutsche Börse (symbol: AT1).
properties with value-add potential in central locations in top tier European cities,
primarily in Germany, the Netherlands and London. Aroundtown and its investees invest
in commercial and residential real estate which benefits from strong fundamentals and
These consolidated financial statements for the year ended December 31, 2024 , consist
of the financial statements of the Company and its investees (the “Group”).
1.2 Group rating
Aroundtown’s credit rating is ‘BBB+’ with a negative outlook given by Standard and
Poor’s (S&P). The rating of ‘BBB+’ also applies to the Company’s unsecured debt. The
Group`s subordinated perpetual notes’ rating is ‘BBB-’.
The corporate credit rating of Grand City Properties S.A. (a subsidiary of the Company,
“GCP”) is ‘BBB+’ with a negative outlook given by S&P, and ‘Baa1’ with a negative outlook
given by Moody’s Investors Service (Moody’s), which maintains its public rating on GCP
on an unsolicited basis since 2021. The ‘BBB+’ and ‘Baa1’ ratings, both with a negative
outlook. GCP’s subordinated perpetual notes are rated ‘BBB-’ and ‘Baa3’, by S&P and
Moody’s, respectively.
Aroundtown’s and GCP’s S&P credit ratings were reaffirmed in December 2024.
1.3 Definitions
Throughout these notes to the consolidated financial statements following definitions
apply:
The Company | Aroundtown SA |
The Group | The Company and its investees |
Subsidiaries | Companies that are controlled by the Company (as defined in IFRS 10) and |
whose financial statements are consolidated with those of the Company | |
| Associates and | Companies over which the Company has significant influence (as defined |
Joint Ventures | in IAS 28) and that are not subsidiaries. The Company’s investment therein |
is included in the consolidated financial statements of the Company using | |
equity method of accounting | |
Investees | Subsidiaries, joint venture entities and associates |
| GCP | Grand City Properties S.A. (subsidiary of the Company; listed for trade in |
the Prime Standard of the Frankfurt Stock Exchange) | |
TLG | TLG Immobilien AG (subsidiary of the Company) |
Related parties | As defined in IAS 24, additionally see note 23 |
The reporting period | The financial year ended on December 31, 2024 |
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These consolidated financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS) as adopted by the European Union.
2.2 Basis of measurement
The consolidated financial statements have been prepared on a going concern basis,
applying the historical cost convention, except for the measurement of the following:
•
Financial assets at fair value through profit or loss;
•
Investment property is measured at fair value;
•
Owner-occupied properties are measured at fair value;
•
Investment in equity-accounted investees – measured using the equity method;
•
Derivative financial assets and liabilities – measured at fair value;
•
Assets and liabilities classified as held for sale – measured at fair value less costs to
sell, when applicable;
•
Deferred tax assets and liabilities – measured at the amount expected to be paid to
(recovered from) the tax authorities, using the tax rates and tax laws that have been
enacted or substantially enacted by the end of the reporting period.
The preparation of consolidated financial statements in accordance with IFRS as adopted
by the EU requires from management the exercise of judgment, to make estimates and
assumptions that influence the application of accounting principles and the related
amounts of assets and liabilities, income and expenses. The estimates and underlying
assumptions are based on historical experience and various other factors that are
deemed to be reasonable based on current knowledge available at that time. Actual
results may differ from such estimates.
The estimates and underlying assumptions are reassessed on a regular basis. Revisions
in accounting estimates are recognized in the period during which the estimate is
revised, if the estimate affects only that period, or in the period of the revision and
future periods, if the revision affects the present as well as future periods.
Judgments
In the process of applying the Group’s accounting policies, management has made the
following judgments, which have the most significant effect on the amounts recognized
in the consolidated financial statements:
●
Leases
Property lease classification (the Group as lessor)
The Group has entered into property leases on its investment property portfolio. The
Group has determined, based on an evaluation of the terms and conditions of the
arrangements, such as the lease terms not constituting a major part of the economic
life of the properties and the present value of the minimum lease payments not
amounting to substantially all of the fair value of the properties, that it retains
substantially all the risks and rewards incidental to ownership of these properties
and accounts for the contracts as operating leases.
Revenue from contracts with customers
Determination of performance obligations
In relation to the services provided to tenants of investment property as part of the
lease agreements into which the Group enters as a lessor, the Group has determined
that the promise is the overall property management service and that the service
performed each day is distinct and substantially the same. Although the individual
activities that comprise the performance obligation vary significantly throughout the
day and from day to day, the nature of the overall promise to provide management
service is the same from day to day. Therefore, the Group has concluded that the
services to tenants represent a series of daily services that are individually satisfied
over time, using a time-elapsed measure of progress, because tenants simultaneously
receive and consume the benefits provided by the Group. With respect to the sale of
property, the Group concluded the goods and services transferred in each contract
constitute a single performance obligation.
Principal versus agent considerations (services to tenants)
The Group arranges for certain services provided to tenants of investment property
included in the contract the Group enters into as a lessor, to be provided by third
parties. The Group has determined that it controls the services before they are
transferred to tenants, because it has the ability to direct the use of these services
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and obtain the benefits from them. In making this determination, the Group has
considered that it is primarily responsible for fulfilling the promise to provide
these specified services because it directly deals with tenants’ complaints and it
is primarily responsible for the quality or suitability of the services. Therefore, the
Group has concluded that it is the principal in these contracts. In addition, the Group
has concluded that it transfers control of these services over time, as services are
rendered by the third-party service providers, because this is when tenants receive
and, at the same time, consume the benefits from these services.
Determining the timing of revenue recognition on the sale of property
The Group has evaluated the timing of revenue recognition on the sale of property
based on a careful analysis of the rights and obligations under the terms of the
contract and legal advice from the Group’s external counsels in various jurisdictions.
The Group has generally concluded that contracts relating to the sale of completed
property are recognized at a point in time when control transfers. For unconditional
exchanges of contracts, control is generally expected to transfer to the customer
together with the legal title. For conditional exchanges, this is expected to take place
Business combinations
The Group acquires subsidiaries that own real estate. At the time of acquisition, the
Group considers whether each acquisition represents the acquisition of a business
or the acquisition of an asset. The Group accounts for an acquisition as a business
combination where an integrated set of activities and assets, including property, is
acquired. More specifically, consideration is given to the extent to which significant
processes are acquired and, in particular, the extent of services provided by the
subsidiary. When the acquisition of subsidiaries does not represent a business
combination, it is accounted for as an acquisition of a group of assets and liabilities.
The cost of the acquisition is allocated to the assets and liabilities acquired based
Estimates and assumptions
The key assumptions concerning future and other key sources of estimation uncertainty
at the reporting date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are described
below. The Group based its assumptions and estimates on parameters available when
these consolidated financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes
or circumstances arising that are beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.
•
Valuation of investment property -
The Group uses external valuation reports
issued by independent professionally qualified valuers to determine the fair
value of its investment property. Changes in its fair value are recognized in the
consolidated statement of profit or loss.
The fair value measurement of investment property requires valuation experts
and the Company’s management to use certain assumptions regarding rates
of return on the Group’s assets, future rent, occupancy rates, contract renewal
terms, the probability of leasing vacant areas, asset operating expenses, the
tenants’ financial stability and the implications of any investments made for
future development purposes in order to assess the future expected cash flows
from the assets. Any change in the assumptions used to measure the investment
property could affect its fair value.
•
Valuation of
financial assets and liabilities -
Some of the Group’s assets and liabilities
are measured at fair value for financial reporting purposes. In estimating the fair
value of an asset or a liability, the Group uses market-observable data to the
extent it is available. The fair value of financial instruments that are not traded
in an active market is determined using valuation techniques. The group uses
its judgement to select a variety of methods and makes assumptions that are
mainly based on market conditions existing at the end of each reporting period.
•
Taxes
- Significant judgment is required in determining the provision for income
taxes. There are transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. The Group
recognizes liabilities for anticipated tax audit issues based on estimates of
whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will
impact the income tax in the period in which such determination is made.
Deferred tax assets are recognized for unused tax losses to the extent that it is
probable that taxable profit will be available against which the losses can be
utilized. Significant management judgement is required to determine the amount
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of deferred tax assets that can be recognized, based upon the likely timing and
the level of future taxable profits, together with future tax planning strategies.
Deferred tax liabilities predominantly relate to the investment property. These
are non-cash items that are largely tied to revaluation gains, and consider the
theoretical future property disposals in the form of asset deals with a tax rate
applied based on the nominal rate in the jurisdiction of the property.
•
Impairment of financial assets measured at amortized cost
- When measuring
expected credit loss (ECL) the Group uses reasonable and supportable forward-
looking information, which is based on assumptions for the future movement
of different economic drivers and how these drivers will affect each other. Loss
given default is an estimate of the loss arising on default. It is based on the
difference between the contractual cash flows due and those that the lender
would expect to receive, taking into account cash flows from collateral and
integral credit enhancements.
•
Property leases - estimating the incremental borrowing rate
- The Group cannot
readily determine the interest rate implicit in leases where it is the lessee,
therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.
The IBR is the rate of interest that the Group would have to pay to borrow over
a similar term, and with a similar security, the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Group ‘would have to pay’, which requires
estimation when no observable rates are available.
Impairment of non-financial assets (property, equipment and intangible assets)
-
When there is an indication that an asset may be impaired or when annual
impairment testing for an asset is required, the Group estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s
or Cash Generating Unit (CGU)’s fair value less costs of disposal and its value
in use. The recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pretax discount
rate that reflects current market assessments of the time value of money and
the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such transactions can
be identified, an appropriate valuation model is used. A previously recognized
impairment loss is reversed only if there has been a change in the assumptions
used to determine the asset’s recoverable amount since the last impairment loss
•
Impairment of goodwill -
Goodwill is not amortized but is reviewed for impairment
at least once a year. For the purpose of impairment testing, goodwill is allocated
to each of the Group’s CGUs (or groups of CGUs) expected to benefit from
the synergies of the business combination. CGUs to which goodwill has been
allocated are tested for impairment annually, or more frequently when there
is an indication that the unit may be impaired. If the recoverable amount of
the CGU is lower than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment loss recognized for goodwill is
non reversable in subsequent periods.
Legal claims
- In estimating the likelihood of outcome of legal claims filed against
the Company and its investees, the Group relies on the opinion of their legal
counsels. These estimates are based on the legal counsels’ best professional
judgment, taking into account the stage of proceedings and historical legal
precedents in respect of the different issues. Since the outcome of the claims
•
Property leases - estimating the incremental borrowing rate
- The Group cannot
readily determine the interest rate implicit in leases where it is the lessee,
therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.
The IBR is the rate of interest that the Group would have to pay to borrow over
a similar term, with a similar security and the funds necessary to obtain an asset
of a similar value to the right-of-use asset in a similar economic environment.
The IBR therefore reflects what the Group ‘would have to pay’, which requires
estimation when no observable rates are available.
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The Group’s consolidated financial statements are presented in euro, which is also the
Group’s functional currency, and reported in millions of euros rounded to one decimal
point, unless stated otherwise. For each investee, the Group determines the functional
currency and items included in the financial statements of each entity are measured
using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group’s entities at their
respective functional currency spot rates at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are translated at the functional
currency spot rates of exchange at the reporting date. Differences arising on settlement
or translation of monetary items are recognized in profit or loss, with the exception of
monetary items that are designated as part of the hedge of the Group’s net investment
of a foreign operation. These are recognized in other comprehensive income until the
net investment is disposed of, at which time, the cumulative amount is reclassified to
profit or loss. Tax charges and credits attributable to exchange differences on those
monetary items are also recognized in other comprehensive income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions. Non-monetary
items measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value is determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated in line with the recognition of gain
or loss on change in fair value of the item (i.e. translation differences on items whose fair
value gain or loss is recognized in other comprehensive income or profit or loss are also
recognized in other comprehensive income or profit or loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset,
liability, expense or income (or part of it) on the derecognition of a non-monetary
asset or non-monetary liability relating to advance consideration, the date of the
transaction is the date on which the Group initially recognizes the non-monetary asset
or non-monetary liability arising from the advance consideration. If there are multiple
payments or receipts in advance, the Group determines the transaction date for each
payment or receipt of advance consideration.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into euros
at the rate of exchange prevailing at the reporting date and their statements of profit or
loss are translated at the average exchange rates for the period, unless exchange rates
fluctuated significantly during the period, in which case the exchange rates prevailing at
the dates of the transactions are used. The exchange differences arising on translation
for consolidation are recognized in other comprehensive income under the header of
foreign operations – foreign currency translation difference, net of investment hedges of
foreign operations and accumulated in the equity as share premium and capital reserves.
Upon disposal of a foreign operation, the component of other comprehensive income
relating to that particular foreign operation is reclassified to profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition
are treated as assets and liabilities of the foreign operation and translated at the spot
rate of exchange at the reporting date.
As at December 31, 2024, the Group’s main foreign exchange rates versus the euro
were as follows:
EUR/GBP |
EUR/USD |
|
(“British Pound”) |
(“US Dollar”) |
|
December 31, 2024 |
0.829 |
1.039 |
December 31, 2023 |
0.869 |
1.105 |
Average rate during the year 2024 |
0.847 |
1.082 |
Average rate during the year 2023 |
0.870 |
1.081 |
Changes (in %): |
||
Year ended December 31, 2024 |
(4.6%) |
(6.0%) |
Year ended December 31, 2023 |
(2.0%) |
3.6% |
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The accounting policies adopted and methods of computation followed are consistent
with those of the previous financial year, except for items disclosed below.
There were some new and amendments to standards and interpretations which are
applicable for the first time in 2024, but either not relevant or do not have a material
impact on the consolidated financial statements of the Group.
The following amendments were adopted for the first time in these consolidated
financial statements, with effective date of January 1, 2024.
●
Amendments IFRS 16 Leases: Lease Liability in a Sale and Leaseback
In September 2022, the International Accounting Standards Board (IASB) issued
amendments to IFRS 16 to specify the requirements that a seller-lessee uses in
measuring the lease liability arising in a sale and leaseback transaction, to ensure
the seller-lessee does not recognize any amount of the gain or loss that relates to the
right of use it retains.
The amendments are effective for annual reporting periods beginning on or after
January 1, 2024, and must applied retrospectively to sale and leaseback transactions
entered into after the date of initial application of IFRS 16. Earlier application is
permitted, and that fact must be disclosed.
These amendments had no material impact on the consolidated financial statements
of the Group.
●
Amendments to IAS 1
Presentation of Financial Statements:
»
Classification of Liabilities as Current or Non-current (issued on January 23, 2020);
»
Classification of Liabilities as Current or Non-current - Deferral of Effective Date
(issued on July 15, 2020); and
»
Non-current Liabilities with Covenants (issued on October 31, 2022)
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69
to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-
current. The amendments clarify:
-
What is meant by a right to defer settlement
-
That a right to defer must exist at the end of the reporting period
-
That classification is unaffected by the likelihood that an entity will exercise
its deferral right
-
That only if an embedded derivative in a convertible liability is itself an equity
instrument would the terms of a liability not impact its classification
In addition, a requirement has been introduced to require disclosure when a liability
arising from a loan agreement is classified as non-current and the entity’s right to defer
settlement is contingent on compliance with future covenants within twelve months.
These amendments had no material impact on the consolidated financial statements
of the Group.
●
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments:
Disclosures: Supplier Finance Arrangements (issued on May 25, 2023)
The amendments relate to disclosure requirements in connection with supplier
financing arrangements - also known as supply chain financing, financing of trade
payables or reverse factoring arrangements.
The new requirements supplement those already included in IFRS standards and
include disclosures about:
-
Terms and conditions of supplier financing arrangements
-
The amounts of the liabilities that are the subject of such agreements, for which
part of them the suppliers have already received payments from the financiers,
and under which item these liabilities are shown in the balance sheet
-
The ranges of due dates
-
Information on liquidity risk
These amendments had no material impact on the consolidated financial statements
of the Group.
The Group has not early adopted any standard, interpretation or amendment that has
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The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at December 31, 2024. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
•
Power over the investee (i.e., existing rights that give the current ability to direct the
relevant activities of the investee)
•
Exposure, or rights, to variable returns from its involvement with the investee
•
The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights results in control. To
support this presumption and when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant facts and circumstances
in assessing whether it has power over an investee, including:
•
The contractual arrangement(s) with the other vote holders of the investee
•
Rights arising from other contractual arrangements
•
The Group’s voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary
and ceases when the Group loses control of the subsidiary. Assets, liabilities, income
and expenses of a subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains control until the
date it ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed
to the equity holders of the parent of the Group and to the non-controlling interests,
even if this results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies in line with the Group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Unrealized gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee.
Unrealized losses are eliminated in the same way as unrealized gains, but only to the
extent that there is no evidence of impairment.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted
for as an equity transaction. The carrying amounts of the Group’s interests and the non-
controlling interests are adjusted to reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or received is recognized
directly in equity attributed to owners of the Company.
When the Group loses control over a subsidiary, profit or loss on disposal is calculated
as the difference between (i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the previous carrying
amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests and other components of equity, and is recognized in the
consolidated statement of profit or loss under ‘Property revaluations and capital gains’.
When assets of the subsidiary are carried at revalued amounts or fair values and the
related cumulative gain or loss has been recognized in other comprehensive income
and accumulated in equity, the amounts previously recognized in other comprehensive
income and accumulated in equity are accounted for as if the Company had directly
disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly
to retained earnings as specified by applicable IFRS). The fair value of any investment
retained in the former subsidiary at the date when control is lost is regarded as the
fair value on initial recognition for subsequent accounting under IFRS 9 Financial
Instruments or IAS 28 Investments in Associates and Joint Ventures.
The accounting policies set out below have been applied consistently to all periods
presented in these consolidated financial statements and have been applied by all
entities in the Group.
Where necessary, adjustments are made to the financial statements of subsidiaries to
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3.3 Property acquisitions not part of business combination
Where property is acquired, via corporate acquisitions or otherwise, management
considers the substance of the assets and activities of the acquired entity in
determining whether the acquisition represents the acquisition of a business. Where
such acquisitions are not determined to be an acquisition of a business, they are not
treated as business combinations. Rather, the cost to acquire the corporate entity or
assets and liabilities is allocated between the identifiable assets and liabilities of the
entity based on their relative values at the acquisition date. Such a transaction or event
does not give rise to goodwill.
The Group determines that it has acquired a business when the acquired set of activities
and assets include an input and a substantive process that, together, significantly
contribute to the ability to create outputs. The acquired process is considered substantive
if it is critical to the ability to continue producing outputs, and the inputs acquired include
an organized workforce with the necessary skills, knowledge, or experience to perform
that process or it significantly contributes to the ability to continue producing outputs
and is considered unique or scarce or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing outputs.
Business combinations are accounted for using the acquisition method. The cost of
an acquisition is measured as the aggregate of the consideration transferred, which is
measured at acquisition date fair value, and the amount of any non-controlling interests
in the acquiree. For each business combination, the Group elects whether to measure
non-controlling interests in the acquiree that are present ownership interests and entitle
their holders to a proportionate share of the entity’s net assets in the event of liquidation,
at fair value or at the proportionate share of the acquiree’s identifiable net assets. Other
types of non-controlling interests are measured at fair value or, when applicable, on the
basis specified in another IFRS.
Acquisition-related costs are expensed as incurred and included in administrative and
other expenses in the consolidated statement of profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair
value at the acquisition date and included as part of the consideration transferred in a
business combination. Contingent consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within equity. Contingent consideration
classified as an asset or liability that is a financial instrument and within the scope of
IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value
recognized in the consolidated statement of profit or loss in accordance with IFRS 9.
Other contingent consideration that is not within the scope of IFRS 9 is measured at
fair value at each reporting date with changes in fair value recognized in profit or loss.
Changes in the fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against
goodwill. Measurement period adjustments are adjustments that arise from additional
information obtained during the ‘measurement period’ (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
When the Group acquires a business, it assesses the identifiable assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in host contracts by the acquiree.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognized at their fair value at the acquisition date, except that:
•
Deferred tax assets or liabilities and liabilities or assets related to employee
benefit arrangements are recognized and measured in accordance with IAS 12
Income Taxes and IAS 19 Employee Benefits, respectively;
•
Liabilities or equity instruments related to share-based payment arrangements
of the acquiree or share-based payment arrangements of the Group entered into
to replace share-based payment arrangements of the acquiree are measured in
accordance with IFRS 2 Share-based Payment at the acquisition date; and
•
Assets (or disposal groups) that are classified as held for sale in accordance
with IFRS 5 Non- current Assets Held for Sale and Discontinued Operations are
measured in accordance with that standard.
Any excess amount identified between the fair value of the asset or liability and their
carrying amount upon initial recognition is amortized in accordance with the accounting
treatment applicable to the respective underlying asset or liability.
Goodwill is initially measured at cost being the excess of the aggregate of the
consideration transferred over the net identifiable assets acquired and liabilities
assumed upon the business combination. If the fair value of the net assets acquired is
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in excess of the aggregate consideration transferred, the Group re-assesses whether it
has correctly identified all of the assets acquired and all of the liabilities assumed and
reviews the procedures used to measure the amounts to be recognized at the acquisition
date. If the reassessment still results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, the gain (defined as a “bargain purchase”)
is immediately recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the
reporting period in which the combination occurs, the Group reports provisional
amounts for the items for which the accounting is incomplete. Those provisional
amounts are adjusted during the measurement period, or additional assets or liabilities
are recognized, to reflect new information obtained about facts and circumstances
that existed at the acquisition date that, if known, would have affected the amounts
recognized at that date.
Goodwill acquired in a business combination is, from the acquisition date, allocated
to each of the Group’s CGUs or groups of CGUs that are expected to benefit from the
synergies of the combination, irrespective of whether other assets or liabilities of the
acquiree are assigned to those units. Each unit or group of units to which the goodwill
is allocated shall represent the lowest level within the entity at which the goodwill
is monitored for internal management purposes and not be larger than an operating
segment as defined by IFRS 8.
At the Group, each real estate property generally meets the requirements for
classification as a CGU. As part of internal management, the real estate properties are
grouped under managed portfolio clusters (TLG and GCP which is a public company,
and the rest). These portfolio clusters are the lowest level within the Group at which
goodwill is monitored for internal management purposes hence the impairment test
is performed at property portfolio level of the acquiree. Other cash-generating assets
that are expected to benefit from the synergies of the business combination and form
part of the recoverable amount (e.g., investment in financial assets) are included within
the same CGU.
Goodwill is subsequently measured at cost less any accumulated impairment losses
(that are non-reversable in following years) as described above in the Estimates and
assumptions section (part of note 2.3) and is not subject to amortization. An impairment
testing is performed on an annual basis and whenever events or circumstances indicate
on impairment arise.
Where goodwill has been allocated to a CGU or a group of CGUs and part of the
operation within that unit is disposed of, the goodwill associated with the operation
disposed of is included in the carrying amount of the operation when determining the
gain or loss on disposal. Goodwill disposed of in these circumstances is measured based
on the relative values of the operation disposed of and the portion of the CGU or group
of CGUs. A single real estate asset that forms part of the CGU under a managed portfolio
cluster that is monitored together for internal management purposes does not constitute
an operation within this group of CGUs. As such, disposals of single properties do not
The Group’s interest in equity-accounted investees comprise interests in associates
and joint ventures.
Associates are those entities in which the Group has significant influence and that
is neither a subsidiary nor an interest in a joint venture. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but
is not control or joint control over those policies. A joint venture is an arrangement in
which two or more parties have interest with joint control, and the Group has rights
to the net assets of the arrangement, rather than rights to its assets and obligations
for its liabilities.
Interests in associates and joint ventures are accounted for under the equity method.
They are initially recognized at cost, which includes transaction costs. Any excess of the
cost of acquisition over the Group’s share of the net fair value of the identifiable assets,
liabilities and contingent liabilities of an associate recognized at the date of acquisition
is recognized as an investment surplus, which is included within the carrying amount of
the investment. Subsequent to initial recognition, the consolidated financial statements
include the Group’s share of profit or loss and OCI of equity-accounted investees, until
the date on which significant influence or joint control ceases.
The results and assets and liabilities of associates and equity-accounted investees are
incorporated in these consolidated financial statements using the equity method of
accounting, except when the investment is classified as held for sale, in which case it is
accounted for in accordance with IFRS 5
Non-current Assets Held for Sale and Discontinued
Operations
. Under the equity method, an investment in an associate is initially recognized
in the consolidated statement of financial position at cost and adjusted thereafter to
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recognize the Group’s share of the consolidated statement of profit or loss and other
comprehensive income of the associate. When the Group’s share of losses of an associate
exceeds the Group’s interest in that associate (which includes any long term interests
that, in substance, form part of the Group’s net investment in the associate), the Group
discontinues recognizing its share of further losses. Additional losses are recognized
only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate. In the event of changes in the net assets of an
investee that are recognized directly in the investee’s equity, the Group accounts these
for as equity transaction in the consolidated financial statements.
The requirements of IAS 36 are applied to determine whether it is necessary to
recognize any impairment loss with respect to the Group’s investment in an associate.
In the event of impairment indicators, the entire carrying amount of the investment
(including the investment surplus) is tested for impairment in accordance with IAS 36
Impairment of Assets as a single asset by comparing its recoverable amount (higher
of value in use and fair value less costs of disposal) with its carrying amount; any
impairment loss recognized forms part of the carrying amount of the investment. Any
reversal of that impairment loss is recognized in accordance with IAS 36 to the extent
that the recoverable amount of the investment subsequently increases.
When an entity in the Group transacts with its associate, profits and losses resulting
from the transactions with the associate are recognized in the Group’s consolidated
financial statements, however only to the extent of interests in the associate that are
The Group’s key sources of income include:
•
Rental income
•
Revenue from contracts with customers – services to tenants including management
charges and other expenses recoverable from tenants
•
Other revenue
The accounting for each of these elements is discussed below:
Rental income
The Group earns revenue from acting as a lessor in operating leases which do not transfer
substantially all of the risks and rewards incidental to ownership of an investment property.
Rental income arising from operating leases on investment property is accounted for on
a straight-line basis over the lease term and is included in revenue in the consolidated
statement of profit or loss due to its operating nature, except for contingent rental
income which is recognized when it arises. Initial direct costs incurred in negotiating and
arranging an operating lease are capitalized to the investment property and recognized
as an expense over the lease term on the same basis as the lease income.
Lease incentives that are paid or payable to the lessee are deducted from lease payments.
Accordingly, tenant lease incentives are recognized as a reduction of rental revenue on
a straight-line basis over the term of the lease. The lease term is the non-cancellable
period of the lease together with any further term for which the tenant has the option to
continue the lease, where, at the inception of the lease, the Group is reasonably certain
that the tenant will exercise that option.
Revenue from services to tenants
For investment property held primarily to earn rental income, the Group enters as a lessor
into lease agreements that fall within the scope of IFRS 16. These agreements include
certain ancillary services offered to tenants (i.e., customers). The consideration charged to
tenants for these services includes fees and reimbursement of certain expenses incurred.
These services are specified in the lease agreements and separately invoiced. The Group
has determined that these services constitute distinct non-lease components (transferred
separately from the right to use the underlying asset) and are within the scope of IFRS 15.
The Group allocates the consideration in the contract to the separate lease and revenue
(non-lease) components on a relative stand-alone selling price basis.
In respect of the revenue component, these services represent a series of daily services
that are individually satisfied over time because the tenants simultaneously receive and
consume the benefits provided by the Group. The Group applies the time elapsed method
to measure progress.
The Group arranges for third parties to provide certain of these services to its tenants.
The Group concluded that it acts as a principal in relation to these services as it controls
the specified services before transferring them to the customer and therefore records
this revenue on a gross basis.
Other revenue
Other revenue includes mainly management fee, consulting fees as well as income
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Finance expenses comprise of interest expense on bank loans, third party borrowings
and bonds, and presented net from finance income that comprises of interest income on
funds invested including on cash deposits.
The interest portion of the lease payment is part of the “Interest and other financial
expenses paid, net” in the consolidated statements of cash flows.
Other financial results represent changes in the time value of provisions, changes in the fair
value of traded securities, gains or losses on derivative financial instruments, borrowing and
redemption costs, loan arrangement fees, dividend income and other one-time payments.
Financial expenses are recognized as they are incurred in the consolidated statement of
Interest and other financial expenses paid are presented in the cash flows arise from
financing activities, net of interest income received in cash.
Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to taxation authorities. The tax rates and tax laws used to compute
the amount are those that are enacted, or substantively enacted, at the reporting date in
the countries where the Group operates and generates taxable income.
Current income tax relating to items recognized directly in other comprehensive income
or equity is recognized in other comprehensive income or in equity and not in the
consolidated statement of profit or loss. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred tax is recognized in respect of temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.
Deferred tax is not recognized for:
●
temporary differences on the initial recognition of assets or liabilities in a transaction that:
-
is not a business combination; and
-
at the time of the transaction, affected neither accounting nor taxable profit or
loss and did not give rise to equal taxable and deductible temporary differences.
The amount of such unrecognized deferred tax on temporary differences arising
from initial recognition exemptions (“IRE Amount”) shall be examined in subsequent
periods. Upon reduction in the temporary difference of the underlying asset or
liability, the IRE Amount should decrease accordingly, but not permanently, and
therefore could reverse over time.
●
temporary differences related to investments in subsidiaries, associates and joint
arrangements to the extent that the Group can control the timing of the reversal of
the temporary differences and it is probable that the temporary differences will not
reverse in the foreseeable future; and
●
taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized for all deductible temporary differences, the
carryforward of unused tax credits and any unused tax losses to the extent that it is
probable that future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is insufficient to recognize
a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing
temporary differences, are considered, based on the business plans for individual
subsidiaries of the Group.
The carrying amount of deferred tax assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at each reporting date and are recognized to the
extent that it has become probable that future taxable profits will allow the deferred
tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date
in the relevant jurisdiction where the assumed theoretical settlement applies. The
measurement of deferred tax reflects the tax consequences that would follow from
the manner in which the Group expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities. For this purpose, the carrying amount of
investment property measured at fair value is presumed to be recovered through sale,
and the Group has not rebutted this presumption.
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In accounting for the deferred tax relating to the lease, the Group considers both the
lease asset and liability separately. The Group separately accounts for the deferred
taxation on the taxable temporary difference and the deductible temporary difference,
which upon initial recognition, are equal and offset to zero. Deferred tax is recognized
on subsequent changes to the taxable and temporary differences. Deferred tax relating
to items recognized outside profit or loss is recognized outside profit or loss. Deferred
tax items are recognized in correlation to the underlying transaction either in OCI or
directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria
for separate recognition at that date, are recognized subsequently if there is new
information about changes in facts and circumstances. The adjustment is either treated
as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred
during the measurement period or recognized in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if, and only if, it has a
legally enforceable right to set off current tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis, or to realize the
assets and settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
The Group has applied a temporary mandatory relief from deferred tax accounting for
Owner-occupied properties are measured at fair value less accumulated depreciation
and accumulated impairment losses recognized after the date of revaluation. Valuations
are performed with sufficient frequency to ensure that the carrying amount of a
revalued asset does not differ materially from its fair value.
A revaluation surplus is recorded in other comprehensive income and credited
to the asset revaluation surplus in equity. However, to the extent that it reverses a
revaluation deficit of the same asset previously recognized in profit or loss, the increase
is recognized in profit and loss. A revaluation deficit is recognized in the statement of
profit or loss, except to the extent that it offsets an existing surplus on the same asset
recognized in the asset revaluation surplus.
The rest of property and equipment items are measured at cost less accumulated
depreciation and impairment losses.
Equipment includes furniture, fixtures and office equipment and is measured at cost
less accumulated depreciation and impairment losses.
useful lives of each part of an item of equipment.
The annual depreciation rates used for the current and comparative periods are as
follows:
% | |
Furniture, fixtures and office equipment | 7-50 |
Buildings | 2-3 |
Depreciation methods, useful lives and residual values are reassessed at the reporting
Where the carrying amount of an asset is greater than its estimated recoverable
amount, the asset is written down immediately to its recoverable amount.
expenditure are included in the carrying amount of the asset when it is probable that
future economic benefits in excess of the originally assessed standard of performance
of the existing asset will flow to the Group. Major renovations are depreciated over the
remaining useful life of the related asset.
An item of equipment is derecognized upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of
The intangible assets of the Group consist of goodwill and software. Goodwill arising
on the acquisition of subsidiaries is measured at cost less accumulated impairment
losses and the applied accounting policy is elaborated in the business combinations
and goodwill section.
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Expenditure on research activities is recognized in profit or loss as incurred. Development
expenditure is capitalized only if the expenditure can be measured reliably, the product
or process is technically and commercially feasible, future economic benefits are probable
and the Group intends to and has sufficient resources to complete development and to
use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent
to initial recognition, development expenditure is measured at cost less accumulated
amortization and any accumulated impairment losses.
Other intangible assets that are acquired by the Group and have definite useful lives
are measured at cost less accumulated amortization and any accumulated impairment
losses. Subsequent expenditure is capitalized only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure is
recognized in profit or loss as incurred.
Amortization is calculated to write off the cost of intangible assets less their estimated
residual values using the straight-line method over their estimated useful lives and is
generally recognized in profit or loss.
The estimated useful lives for current and comparative periods are as follows:
% |
|
Software |
20 – 33 |
Amortization methods, useful lives and residual values are reviewed at each reporting
Deferred income represents income which relates to future periods.
●
Prepayments
The Group receives prepayments from tenants for ancillary services and other charges
(heating, water, insurance, cleaning etc.) on a monthly basis. These prepayments
received from tenants are mainly settled once a year against the operating cost
receivables. By the time of settlement, the prepayment and operating costs receivable
balances are presented gross in the consolidated statement of financial position.
●
Tenancy deposits
Tenancy deposits are paid to ensure the property is returned in a good condition. The
Investment property comprises completed property and property under development
or re-development that is held, or to be held, to earn rentals or for capital appreciation
or both. Property held under a lease is classified as investment property when it is held
to earn rentals or for capital appreciation or both, rather than for sale in the ordinary
course of business or for use in production or administrative functions.
Investment property comprises principally properties that are not occupied substantially
for use by, or in the operations of, the Group, nor for sale in the ordinary course of
business, but are held primarily to earn rental income and capital appreciation. These
buildings are substantially rented to tenants and not intended to be sold in the ordinary
course of business. Investment property that comprises a portion that is occupied for
use by, or in the operations of, the Group, and that can be sold separately or leased
under financial lease, shall be accounted for separately as owner-occupied property as
per IAS 16 or IFRS 16, depending on the case, and classified as property and equipment
in the consolidated statement of financial position.
Investment property is measured initially at cost, including directly attributable expenditure
such as transfer taxes, professional fees for legal services and other transaction costs.
Subsequent to initial recognition, investment property is stated at fair value, which reflects
market conditions at the reporting date. Gains or losses arising from changes in the fair
values of investment property are included in profit or loss in the period in which they arise,
including the corresponding tax effect.
Transfers are made to (or from) investment property only when there is evidence of a
change in use (such as commencement of development or inception of an operating
lease to another party). For a transfer from investment property to inventories, the
deemed cost for subsequent accounting is the fair value at the date of change in use.
If an inventory property becomes an investment property, the difference between the
fair value of the property at the date of transfer and its previous carrying amount is
recognized in profit or loss. The Group considers as evidence the commencement of
development with a view to sale (for a transfer from investment property to inventories)
or inception of an operating lease to another party (for a transfer from inventories
to investment property). For a transfer from investment property to owner-occupied
property, the deemed cost for subsequent accounting is the fair value at the date
of change in use. If owner-occupied property becomes an investment property, the
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Group accounts for such property in accordance with the policy stated under property,
equipment and intangible assets up to the date of change in use.
Investment property is derecognized either when has been disposed of (i.e. at the
date the recipient obtains control of the investment property in accordance with the
requirements for determining when a performance obligation is satisfied in IFRS 15)
or when it is permanently withdrawn from use and no future economic benefit is
expected from its disposal. The difference between the net disposal proceeds and
the carrying amount of the asset is recognized in ‘Property revaluations and capital
gains’ in the consolidated statement of profit or loss in the period of derecognition.
In determining the amount of consideration to be included in the gain or loss arising
from the derecognition of investment property, the Group considers the effects of
variable consideration, the existence of a significant financing component, non-cash
consideration, and consideration payable to the buyer (if any) in accordance with the
requirements for determining the transaction price in IFRS 15.
Refer to the note 3.14 “Non-current assets held for sale” on the accounting for investment
3.14 Non-current assets classified as held for sale
The Group classifies non-current assets (principally investment property) and disposal
groups as held for sale if their carrying amounts will be recovered principally through
a sale transaction rather than through continuing use. Non-current assets and disposal
groups classified as held for sale (except for investment property measured at fair
value) are measured at the lower of their carrying amount and fair value less costs to
sell. Costs to sell are the incremental costs directly attributable to the disposal of an
asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is
highly probable, and the asset or disposal group is available for immediate sale in
its present condition. Actions required to complete the sale should indicate that it is
unlikely that significant changes to the sale will be made or that the decision to sell
will be withdrawn. Management must be committed to the plan to sell the asset, and
the sale is expected to be completed within one year from the date of the classification.
Investment property held for sale continues to be measured at fair value. Assets and
liabilities classified as held for sale are presented separately in the consolidated
statement of financial position.
all of the assets and liabilities of that subsidiary are classified as held for sale when
the criteria described above are met, regardless of whether the Group will retain a
A financial instrument is any contract that gives right to a financial asset of one entity
and a financial liability or equity instrument of another entity.
Financial assets
(1) Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at
amortized cost, fair value through other comprehensive income, or fair value through
profit or loss.
The classification of financial assets at initial recognition depends on the financial
asset’s contractual cash flow characteristics and the Group’s business model for
managing them. With the exception of trade receivables that do not contain a
significant financing component or for which the Group has applied the practical
expedient, the Group initially measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which
the Group has applied the practical expedient are measured at the transaction price
determined under IFRS 15. See note 3.6.
In order for a financial asset to be classified and measured at amortized cost or fair
value through OCI, it needs to give rise to cash flows that are ‘solely payments of
principal and interest (SPPI)’ on the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages
its financial assets in order to generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time
frame established by regulation or convention in the marketplace (regular way
trades) are recognized on the trade date, i.e., the date that the Group commits to
purchase or sell the asset.
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(2) Subsequent measurement
For
the purposes of subsequent measurement, financial assets are classified in
four categories:
1.
Financial assets at amortized cost (debt instruments)
2.
Financial assets at fair value through OCI with recycling of cumulative gains
and losses (debt instruments)
3.
Financial assets designated at fair value through OCI with no recycling of
cumulative gains and losses upon de-recognition (equity instruments)
4.
Financial assets at fair value through profit or loss
Financial assets at amortized cost (debt instruments)
The Group measures financial assets at amortized cost if both of the following
conditions are met:
●
The financial asset is held within a business model with the objective to hold
financial assets in order to collect contractual cash flows, and
●
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
Financial assets at amortized cost are subsequently measured using the EIR method
and are subject to impairment. Gains or losses are recognized in profit or loss when
the asset is de-recognized, modified or impaired refer to expected credit loss model
in determined impairmen.
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the
following conditions are met:
●
The financial asset is held within a business model with the objective of both
holding to collect contractual cash flows and selling, and
●
The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange
revaluation and impairment losses or reversals are recognized in consolidated
statement of profit or loss and computed in the same manner as for financial assets
measured at amortized cost. The remaining fair value changes are recognized in
OCI. Upon de-recognition, the cumulative fair value change recognized in OCI is
recycled to profit or loss.
Financial assets at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity
investments as equity instruments designated at fair value through OCI when
they meet the definition of equity under IAS 32 and are not held for trading. The
classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss.
Dividends are recognized as other financial results in the consolidated statement
of profit or loss when the right of payment has been established, except when the
Group benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity instruments designated
at fair value through OCI are not subject to impairment assessment.
Financial assets at fair value through profit or loss include financial assets held
for trading, financial assets designated upon initial recognition at fair value
through profit or loss, or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired
for the purpose of selling or repurchasing in the near term. Derivatives, including
separated embedded derivatives, are also classified as held for trading unless they
are designated as effective hedging instruments. Financial assets with cash flows
that are not solely payments of principal and interest are classified and measured at
fair value through profit or loss, irrespective of the business model. Notwithstanding
the criteria for debt instruments to be classified at amortized cost or at fair value
through OCI, as described above, debt instruments may be designated at fair value
through profit or loss on initial recognition if doing so eliminates, or significantly
reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the consolidated
statement of financial position at fair value with net changes in fair value recognized
in the consolidate statement of profit or loss.
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A derivative embedded in a hybrid contract, with a financial liability or non-financial
host, is separated from the host and accounted for as a separate derivative if: the
economic characteristics and risks are not closely related to the host; a separate
instrument with the same terms as the embedded derivative would meet the
definition of a derivative; and the hybrid contract is not measured at fair value
through profit or loss. Embedded derivatives are measured at fair value with changes
in fair value recognized in profit or loss. Reassessment only occurs if there is either
a change in the term of the contract that significantly modifies the cash flows that
would otherwise be required or a reclassification of a financial asset out of the fair
value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is
not accounted for separately. The financial asset host together with the embedded
derivative is required to be classified entirely as a financial asset at fair value
through profit or loss
Financial asset (or, where applicable, part of a financial asset or part of a group of
similar financial assets) is primarily de-recognized (i.e., removed from the Group’s
consolidated statement of financial position) when:
●
The rights to receive cash flows from the asset have expired, or
●
The Group has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material
delay to a third party under a ‘pass-through’ arrangement; and either (a) the
Group has transferred substantially all the risks and rewards of the asset, or (b)
the Group has neither transferred nor retained substantially all the risks and
rewards of the asset but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if, and to what extent,
it has retained the risks and rewards of ownership. When it has neither transferred
nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Group continues to recognize the transferred asset to the
extent of its continuing involvement. In that case, the Group also recognizes an
associated liability. The transferred asset and the associated liability are measured
on the basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred
asset is measured at the lower of the original carrying amount of the asset and the
The Group recognizes an allowance for expected credit loss for all financial assets
not held at fair value through profit or loss. ECLs are based on the difference
between the contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.
ECLs are recognized in two stages. For credit exposures for which there has not
been a significant increase in credit risk since initial recognition, ECLs are provided
for credit losses that result from defaults events that are possible within the
next 12 months (a 12-month ECL). For those credit exposures for which there has
been a significant increase in credit risk since initial recognition, a loss allowance
is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL). The Group presumes
that the credit risk on a financial asset has increased significantly since initial
recognition when contractual payments are more than 30 days past due, unless the
Group has reasonable and supportable information that demonstrates otherwise.
Lifetime ECL represents the expected credit losses that will result from all
possible default events over the expected life of a financial instrument. In contrast,
12-month ECL represents the portion of lifetime ECL that is expected to result
from default events on a financial instrument that are possible within 12 months
after the reporting date.
For trade receivables, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk but instead recognizes
a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision that is based on its historical credit loss experience, adjusted
for forward-looking factors specific to the debtors and the economic environment.
The Group considers a financial asset to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
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held by the Group or when there is a breach of financial covenants by the debtor.
Irrespective of the above analysis, the Group considers that default has occurred when
a financial asset is more than 90 days past due unless the Group has reasonable and
supportable information to demonstrate that a more lagging default criterion is more
appropriate. A financial asset is written off when there is no reasonable expectation
Financial liabilities
(1) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair
value through profit or loss or at amortized cost.
All financial liabilities are recognized initially at fair value and, in the case of loans
and borrowings and payables, net of directly attributable transaction costs and are
subsequently expensed via EIR.
(2) Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Financial liabilities at fair value through profit or loss include financial liabilities
held for trading and financial liabilities designated upon initial recognition as at
fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Group that are not designated as hedging
instruments in hedge relationships as defined by IFRS 9. Separated embedded
derivatives are also classified as held for trading unless they are designated as
effective hedging instruments.
Gains or losses on liabilities held for trading are recognized in the consolidated
statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit
or loss are designated at the initial date of recognition, and only if the criteria in
IFRS 9 are satisfied. The Group has not designated any financial liability as at fair
This is the category most relevant to the Group. After initial recognition, interest-
bearing loans and borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized in profit or loss when the
liabilities are de-recognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on
A financial liability is de-recognized when the obligation under the liability is
discharged or cancelled or expires. When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification
is treated as the de-recognition of the original liability and the recognition of a
new liability. The difference in the respective carrying amounts is recognized in
(c)
Interbank Offered Rates (IBOR) Reform
IBOR reform Phase 2 requires, as a practical expedient, for changes to the basis for
determining contractual cash flows that are necessary as a direct consequence of IBOR
reform to be treated as a change to a floating rate of interest, provided the transition
from IBOR to a risk-free rate (RFR) takes place on a basis that is ‘economically equivalent’.
To qualify as ‘economically equivalent’, the terms of the financial instrument must be the
same before and after transition except for the changes required by IBOR reform. For
changes that are not required by IBOR reform, the Group applies judgement to determine
whether they result in the financial instrument being derecognized. Therefore, as financial
instruments transition from IBOR to RFRs, the Group applied judgement to assess
whether the transition had taken place on an economically equivalent basis. In making
this assessment, the Group considered the extent of any changes to the contractual cash
flows as a result of the transition and the factors that had given rise to the changes, with
consideration of both quantitative and qualitative factors. Factors of changes that are
economically equivalent include: changing the reference rate from an IBOR to a RFR;
changing the reset days between coupons to align with the RFR; adding a fallback to
automatically transition to an RFR when the IBOR ceases; and adding a fixed credit
spread adjustment based on that calculated by the International Swaps and Derivatives
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Association (ISDA) or which is implicit in the market forward rates for the RFR. The
transition has been completed as of December 31, 2023.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in
the consolidated statement of financial position if there is a currently enforceable legal
right to offset the recognized amounts and there is an intention to settle on a net basis,
Ordinary shares are classified as equity. Incremental costs directly attributable to the
3.17 Mandatory convertible notes
Mandatory convertible notes are classified as equity, and coupon related to the
noteholders is recognized in the consolidated statement of changes in equity. Both the
noteholders and the Company may convert the notes into Company’s shares using a fixed
ratio that does not vary with changes in fair value. At maturity, the unconverted notes
are mandatorily converted into shares. The Company may, at its sole discretion, elect to
defer the payment of interest on the notes (Arrears of Interest). Arrears of Interest are
presented as liability and must be paid by the Company upon conversion event and
should not compound interest. Issuance costs incurred are deducted from the initial
carrying amount of the notes.
When own shares are repurchased, the amount of the consideration paid including direct
acquisition costs is recognized as a deduction from equity. Repurchased own shares
are classified as treasury shares, presented in the treasury share reserve and are not
revaluated after the acquisition. When treasury shares are subsequently sold or delivered,
the amount received is recognized as an increase in equity and the resulting surplus or
3.19 Perpetual notes
Perpetual notes have no maturity date and may only be redeemed by the Group, at
its sole discretion, on certain dates. The perpetual notes are recognized as equity
attributable to its holders, which forms part of the total equity of the Group. The
Company may, at its sole discretion, elect to defer the payment of interest on the notes
(referred to as Arrears of Interest). Arrears of Interest must be paid by the Company upon
the occurrence of certain events, including but not limited to, dividends, distributions or
other payments made to instruments such as the Company’s ordinary shares, which rank
junior to the perpetual notes. Upon occurrence of such an event, any Arrears of Interest
would be re-classified as a liability in the Group’s consolidated financial statements.
The deferred amounts shall not bear interest.
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as forward currency contracts,
interest rate swap and cross-currency swap contracts, to hedge its foreign currency risks,
interest rate risks and fair value risks. Such derivative financial instruments are initially
recognized at fair value on the date on which a derivative contract is entered into and
are subsequently re-measured at fair value. Derivatives are carried as financial assets
when the fair value is positive and as financial liabilities when the fair value is negative.
For the purpose of hedge accounting, hedges are classified as:
●
Fair value hedges when hedging the exposure to changes in the fair value of a
recognized asset or liability or an unrecognized commitment.
●
Cash flow hedges when hedging the exposures to variability in cash flows that is
either attributable to a particular risk associated with a recognized asset or liability or
a highly probable forecast transaction or the foreign currency risk in an unrecognized
firm commitment.
●
Hedges of a net investment in foreign operations.
At the inception of a hedge relationship, the Group formally designates and documents
the hedge relationship to which it wishes to apply hedge accounting and the risk
management objective and strategy for undertaking the hedge.
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The documentation includes identification of the hedging instrument, the hedged item,
the nature of the risk being hedged and how the Group will assess whether the hedging
relationship meets the hedge effectiveness requirements (including the analysis of
sources of hedge ineffectiveness and how the hedge ration is determined). A hedging
relationship qualifies for hedge accounting if it meets all the following effectiveness
requirements:
●
There is ‘an economic relationship’ between the hedged item and the hedging instrument.
●
The effect of credit risk does not ‘dominate the value changes’ that result from that
economic relationship.
●
The hedge ratio of the hedging relationship is the same as that resulting from the
quantity of the hedged item that the Group hedges and the quantity of the hedging
instrument that the Group uses to hedge that quantity of hedge item.
Hedges that meet all the qualifying criteria for hedge accounting are accounted for
and further described below:
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognized in
OCI and accumulated in the hedge reserves, while any ineffective portion is recognized
immediately in the consolidated statement of profit or loss. The cash flow hedge reserve
is adjusted to the lower of the cumulative gain or loss on the hedging instrument and
the cumulative change in fair value of the hedged item.
The forward element is recognized in OCI and accumulated in a separate component of
equity under other reserve.
The amounts accumulated in OCI are accounted for, depending on the nature of the
underlying hedged transaction. If the hedged transaction subsequently results in the
recognition of a non-financial item, the amount accumulated in equity is removed from
the separate component of equity and included in the initial cost or other carrying
amount of the hedged asset or liability. This is not a reclassification adjustment and will
not be recognized in OCI for the period. This also applies where the hedged forecast
transaction of a non-financial asset or non-financial liability subsequently become a firm
commitment for which fair value hedge accounting is applied.
For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit
or loss as a reclassification adjustment in the same period or periods during which the
hedged cash flows affect profit or loss.
If cash flow hedge accounting is discontinued, the amount that has been accumulated in
OCI must remain in accumulated OCI if the hedged future cash flows are still expected
to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a
reclassification adjustment. After discontinuation, once the cash flows hedge occurs, any
amount remaining in accumulated OCI must be accounted for depending on the nature
of the underlying transaction as described above.
Fair value hedges
The change in the fair value of a hedging instrument is recognized in the consolidated
statement of profit or loss. The change in the fair value of the hedged item attributable
to the risk hedged is recorded as part of the carrying value of the hedged item and is
also recognized in the consolidated statement of profit or loss.
In cases that the Group designates only the spot element of swap contracts as a hedging
instrument, the forward element is recognized in OCI and accumulated in a component
of equity under cost of hedging reserve as time period related element and amortized to
the consolidated statement of profit or loss over the hedged period.
If the hedged item is derecognized, the unamortized fair value is recognized immediately
in profit or loss.
Hedge of net investments in foreign operations
Hedges of a net investment in a foreign operation, including a hedge of monetary item
that is accounted for as part of the net investment, are accounted for as follows:
●
The Group designates only the spot element of a non-derivative financial liability and
forward contracts as the hedging instrument. The forward element is recognized in
OCI and accumulated in a separate component of equity under cost of hedging reserve
as time period related element and amortized to the consolidated statement of profit
or loss over the hedged period.
●
Gains or losses on the hedging instrument relating to the effective portion of the
hedge are recognized as OCI while any gains or losses relating to the ineffective
portion are recognized in the consolidated statement of profit or loss.
●
On disposal of the foreign operation, the cumulative value of any such gains or losses
recorded in equity is transferred to the consolidated statement of profit or loss.
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Interbank offered rates (IBOR) reform
The Group applies the temporary reliefs provided by the IBOR reform Phase 1
amendments, which enable its hedge accounting to continue during the period of
uncertainty, before the replacement of an existing interest rate benchmark with a risk-
free rate (RFR). For the purpose of determining whether a forecast transaction is highly
probable, the reliefs require it to be assumed that the IBOR on which the hedged cash
flows are based is not altered as a result of IBOR reform. The reliefs end when the
Group judges that the uncertainty arising from IBOR reform is no longer present for
the hedging relationships that are referenced to IBORs. This applies when the hedged
Cash and cash equivalents in the consolidated statement of financial position and
in the consolidated statement of cash flow comprise cash at banks and on hand and
short-term highly liquid deposits with an original maturity of three months or less, that
are readily convertible to a known amount of cash and are subject to an insignificant
This item includes operating costs that can be recharged to the tenants and direct
management costs of the properties. Maintenance expenses for the upkeep of the
property in its current condition, as well as expenditure for repairs are charged to the
consolidated statement of profit or loss. Refurbishment that takes place subsequent to
the property valuation, thus excluded in its additional value, will also be stated in this
The Group’s reportable segments, as defined under IFRS 8, are based on the information
provided to the Chief Operating Decision Maker (CODM) for resource allocation and
performance assessment. These segments consist of the Commercial Portfolio, which
includes office, hotel, and other commercial properties primarily in Germany and the
Netherlands, and the GCP Portfolio, focused on residential real estate in densely populated
areas, predominantly in Germany and London. The Commercial Portfolio consists of assets
leased to business tenants and is influenced by economic conditions in the commercial
real estate market. The GCP Portfolio, focused on residential living solutions, operates
under distinct regulatory environments and is subject to different economic factors, with
a diverse tenant base and more granular lease structures. Each segment is managed
separately due to their differing operational characteristics, regulatory environments,
3.24 Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in
presentation in the current period and marked as “reclassified”.
Earnings per share are calculated by dividing the net profit attributable to owners of the
Company by the weighted average number of ordinary shares outstanding during the
period. Basic earnings per share only include shares that were outstanding during the
period. Potential ordinary shares (convertible securities such as convertible debentures,
warrants and share-based payments for employee) are only included in the computation
of diluted earnings per share when their conversion decreases earnings per share or
increases loss per share from continuing operations. Further, potential ordinary shares
that are converted during the period are included in diluted earnings per share only
until the conversion date and from that date in basic earnings per share. The Company’s
share in earnings of investees is included based on the diluted earnings per share of
The grant-date fair value of equity-settled share-based payment awards granted to
employees is generally recognized as an expense, with a corresponding increase in
equity, over the vesting period of the awards. The amount recognized as an expense
is adjusted to reflect the number of awards for which the related service and non-
market performance conditions are expected to be met, such that the amount ultimately
recognized is based on the number of awards that meet the related service and non-
Provisions are recognized when there is a present obligation, either legal or constructive,
vis-à-vis third parties as a result of a past event, if it is probable that a claim will be
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asserted, and the probable amount of the required provision can be reliably estimated.
Provisions are reviewed regularly and adjusted to reflect new information or changed
circumstances. Provisions include provisions for operating and administrative liabilities,
as well as accruals of interest on straight and convertible bonds which have not become
The Group assesses at contract inception whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets. The Group recognizes lease
liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
(a) Right-of-use assets
The Group recognizes right-of-use assets at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Initially, the right-of-use assets
are measured at cost and adjusted for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount of lease liabilities recognized, initial
direct costs incurred, and lease payments made at or before the commencement date
less any lease incentives received.
In addition, the Group leases properties that meet the definition of investment
property. These right-of-use assets are classified and presented as part of the line
item ‘Investment property’ in the consolidated statement of financial position and
subsequently measured at fair value.
(b) Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities
measured at the present value of lease payments to be made over the lease term.
The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating the
lease, if the lease term reflects the Group exercising the option to terminate. Variable
lease payments that do not depend on an index or a rate are recognized as expenses
in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental
borrowing rate at the lease commencement date because the interest rate implicit
in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments resulting from a change in an index
or rate used to determine such lease payments) or a change in the assessment of
an option to purchase the underlying asset. IFRS 16 requires certain adjustments
to be expensed, while others are added to the cost of the related right-of-use asset.
The Group presents the cash payments for interest portion of lease liability under
“interest and other financial expenses, net” and the cash payments for principal
portion of lease liability under “Amortization of loans from financial institutions and
others” in the consolidated statement of cash flows.
(c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to short-term leases
of equipment (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease
of low-value assets recognition exemption to leases of office equipment that are
considered to be low value. Lease payments on short-term leases and leases of low-
value assets are recognized as expense on a straight-line basis over the lease term.
Group as a lessor
229
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3.29 Standards issued but not yet effective
The amended standards and interpretations that are issued and adopted by the EU,
but not yet effective, up to the date of issuance of the Group’s consolidated financial
statements are presented below, if they are relevant to the Group’s consolidated
financial statements. The Group intends to adopt these new and amended standards
and interpretations, if applicable, when they become effective.
●
Amendments to IAS 21 The effects of Changes in Foreign Exchange Rates: Lack of
Exchangeability (issued on August 15, 2023)
In August 2023, the IASB amended IAS 21 to help entities to determine whether a
currency is exchangeable into another currency, and which spot exchange rate to use
when it is not.
These amendments are not expected to have a material impact on the consolidated
financial statements of the Group.
The Group has not early adopted any standard, interpretation or amendment that has
Berlin
230
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4.1 Fair value hierarchy
The following table presents the Group’s financial assets and liabilities measured and
presented at fair value as at December 31, 2024, and as at December 31, 2023, on a
recurring basis under the relevant fair value hierarchy. Also presented are the Group’s
financial assets and liabilities measured at amortized cost for which the carrying
amount materially differs from the fair value.
| As at December 31, 2024 |
As at December 31, 2023 |
|||||||||
Fair value measurement using | Fair value measurement using | |||||||||
Quoted prices |
Significant |
Significant |
Quoted prices |
Significant |
Significant |
|||||
in active |
observable |
unobservable |
in active |
observable |
unobservable |
|||||
Carrying |
Total fair |
market |
inputs |
inputs |
Carrying |
Total fair |
market |
inputs |
inputs |
|
amount |
value |
(Level 1) |
(Level 2) |
(Level 3) |
amount |
value |
(Level 1) |
(Level 2) |
(Level 3) |
|
| in € millions |
in € millions |
|||||||||
| FINANCIAL ASSETS |
||||||||||
Financial assets at fair value through profit or loss (1) |
623.9 |
623.9 |
296.8 |
282.2 |
44.9 |
418.7 |
418.7 |
240.6 |
135.2 |
42.9 |
Derivative financial assets |
302.3 |
302.3 |
- |
302.3 |
- |
386.1 |
386.1 |
- |
386.1 |
- |
Total financial assets |
926.2 |
926.2 |
296.8 |
584.5 |
44.9 |
804.8 |
804.8 |
240.6 |
521.3 |
42.9 |
| FINANCIAL LIABILITIES |
||||||||||
Loans and borrowings (2) |
2,501.1 |
2,526.5 |
- |
2,526.5 |
- |
2,204.1 |
2,221.3 |
- |
2,221.3 |
- |
| Straight bonds (3) |
12,010.9 |
11,556.3 |
11,372.5 |
183.8 |
- |
12,038.0 |
10,373.8 |
10,157.2 |
216.6 |
- |
Derivative financial liabilities |
399.0 |
399.0 |
- |
399.0 |
- |
441.0 |
441.0 |
- |
441.0 |
- |
Total financial liabilities |
14,911.0 |
14,481.8 |
11,372.5 |
3,109.3 |
- |
14,683.1 |
13,036.1 |
10,157.2 |
2,878.9 |
- |
(1)
including non-current financial assets at fair value through profit or loss see note 17(3).
(2)
includes current and non-current balances and portion classified as held for sale
(3)
the carrying amount excludes accrued interest
231
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Level 1:
the fair value of financial instruments traded in active markets (such as debt and
equity securities) is based on quoted market prices at the end of the reporting period.
Level 2:
the fair value of financial instruments that are not traded in an active market
(for example, over-the-counter derivatives) is determined using valuation techniques
which maximize the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant input required to fair value of financial
instrument are observable, the instrument is included in level 2.
Level 3:
if one or more of the significant inputs is not based on observable market data,
the instrument is included in level 3.
The Group’s policy is to recognize transfers into and transfers out of fair value hierarchy
levels as at the end of the reporting period.
When the fair value of financial assets and financial liabilities recorded in the
consolidated statement of financial position cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation techniques
including the discounted cash flow (DCF) model. The inputs to these models are taken
from observable markets where possible, but where this is not feasible, a degree of
judgement is required in establishing fair values. Judgements include considerations
of input such as liquidity risk, credit risk and volatility. Changes in assumptions relating
to these factors could affect the reported fair value of financial instruments and is
discussed further below.
4.2 Valuation techniques used to determine fair values
The following methods and assumptions were used to estimate the fair values:
●
The fair values of the quoted bonds are based on price quotations at the reporting
date. The fair value of unquoted bonds is measured using the discounted cash flow
method with observable inputs.
●
There is an active market for the Company’s listed equity investments and quoted
debt instruments.
●
For the fair value measurement of investments in unlisted funds, the net asset value
is used as a valuation input and an adjustment is applied for lack of marketability and
restrictions on redemptions as necessary. This adjustment is based on management
judgment after considering the period of restrictions and the nature of the underlying
investments.
●
The Company enters into derivative financial instruments with various counterparties,
principally financial institutions with investment grade credit ratings. Interest rate and
foreign exchange swap and forward contracts are valued using valuation techniques,
which employ the use of market observable inputs. The most frequently applied
valuation technique includes forward pricing and swap models using present value
calculations. The models incorporate various inputs including the credit quality of
counterparties, foreign exchange spot and forward rates, yield curves of the respective
currencies, currency basis spreads between the respective
currencies, interest rate
5.1 Reportable segments
Products and services from which reportable segments derive their data
Information reported to the Group’s Chief Operating Decision Maker (CODM) for the
purposes of resource allocation and assessment of segment performance is based on
Aroundtown’s commercial portfolio and GCP’s portfolio, and contains the segments’
revenue, net operating income and property revaluation and capital gains. The Group’s
reportable segments under IFRS 8 are therefore as follows:
Commercial
portfolio
The commercial portfolio includes predominantly office and hotel properties as well
as other commercial property types (e.g., retail & logistics). This portfolio is well-
diversified and located across top tier cities in Europe, primarily in Germany and the
Netherlands. The portfolio assets exhibit similar economic characteristics, including
revenue generation patterns, operational risks, capital investment strategies and
dependencies on economic conditions affecting commercial real estate. Furthermore,
in terms of nature of products and services, the segment assets are leased to business
tenants for use in commercial activities, where offices tenants provide business spaces
primarily to their employees, while hotel tenants offer space for accommodation to
the business community and tourists. The demand for these assets is subject to the
economic market environment.
GCP portfolio
GCP is a specialist in residential real estate, investing in value-add opportunities in
densely populated areas predominantly in Germany and in London. GCP’s portfolio
consists of approximately 61 thousand units, located in densely populated areas
with a focus on Berlin, North Rhine-Westphalia, the metropolitan regions of Dresden,
Leipzig and Halle, and other densely populated areas including London.
232
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The GCP portfolio comprises primarily of properties intended for residential use. This
segment is distinctly classified based on its primary customer base, being individuals
and families, as well as its operational approach focused on residential living solutions,
that is dependent on different economic conditions than those affecting commercial
real estate and is subject to a distinctive regulatory environment. In this segment,
rents may be regulated, properties are mostly multi-tenant properties with granular
lease structures, and tenants benefit from stronger regulatory protections. As a result,
such properties require a comprehensive administration that can manage the highly
diverse and granular tenant base, as well as the distinct regulatory environments, and
is therefore managed and reported separately to the Group’s CODM.
5.2 Segment revenues and net operating income
The following is an analysis of the Group’s revenue and results by reportable segment:
| Year ended December 31, 2024 | ||||||
| in € millions | ||||||
Total | ||||||
Commercial | GCP | reportable | ||||
Note | portfolio | portfolio | segments | Adjustments | Total | |
Segment revenue | 6 | 946.9 | 597.0 | 1,543.9 | (1.6) | 1,542.3 |
Net operating income | 670.6 | 343.3 | 1,013.9 | (1.6) | 1,012.3 | |
Property revaluations and capital | ||||||
gains | 7 | (169.4) | 44.0 | (125.4) | - | (125.4) |
Impairment of goodwill | 14 | (31.6) | (14.4) | (46.0) | - | (46.0) |
Share of results from investment | ||||||
in equity-accounted investees | 16 | (42.5) | ||||
Administrative and other expenses | 9 | (65.7) | ||||
Depreciation and amortization | 14, 15 | (20.2) | ||||
Finance expenses | 10 | (235.2) | ||||
Other financial results | 10 | (31.0) | ||||
Profit before tax | 446.3 | |||||
Current tax expenses | 11.2 | (124.5) | ||||
Deferred tax expenses | 11.4 | (12.5) | ||||
Profit for the year | 309.3 | |||||
| Year ended December 31, 2023 | ||||||
| in € millions | ||||||
Commercial | GCP | Total | ||||
Note | portfolio | portfolio | segments | Adjustments | Total | |
Segment revenue | 6 | 996.8 | 607.7 | 1,604.5 | (1.7) | 1,602.8 |
Net operating income | 655.3 | 328.7 | 984.0 | (1.7) | 982.3 | |
Property revaluations and | ||||||
capital losses | 7 | (2,327.5) | (890.0) | (3,217.5) | - | (3,217.5) |
Impairment of goodwill | 14 | (76.7) | (60.3) | (137.0) | - | (137.0) |
Share of profit from equity- | ||||||
accounted investees | 16 | (149.8) | ||||
Administrative and other expenses | 9 | (64.7) | ||||
Depreciation and amortization | 14, 15 | (17.9) | ||||
Finance expenses | 10 | (230.1) | ||||
Other financial results | 10 | (14.4) | ||||
Loss before tax | (2,849.1) | |||||
Current tax expenses | 11 | (120.4) | ||||
Deferred tax income | 11 | 543.1 | ||||
Loss for the year | (2,426.4) | |||||
Segment revenue, net operating income, revaluation and capital gains represent
the results earned by each segment without allocation of the depreciation and
amortization, administration expenses, share of results from equity-accounted investees,
finance expenses, and tax expenses. These are the measures reported to the Group’s
CODM for the purpose of resource allocation and assessment of segment performance.
The geographical disaggregation is not considered by the Group’s CODM on how the
operating results are monitored. For the geographical distribution of revenue and
233
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AROUNDTOWN
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Net rental income | 1,180.9 | 1,192.8 |
Operating and other income | 361.4 | 410.0 |
Total | 1,542.3 | 1,602.8 |
Geographical distribution of revenue
Year ended December 31, | ||
Country | 2024 | 2023 |
in € millions | ||
Germany | 1,127.7 | 1,198.0 |
The Netherlands | 154.6 | 176.6 |
United Kingdom | 158.7 | 148.7 |
Belgium | 32.4 | 27.3 |
Others | 68.9 | 52.2 |
Total | 1,542.3 | 1,602.8 |
The Group is not exposed to significant revenue derived from an individual customer.
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Pro perty revaluations | (127.2) | (3,174.8) |
Ca pital gains / (losses) | 1.8 | (42.7) |
Total | (125.4) | (3,217.5) |
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Ancillary expenses and purchased services | (348.3) | (409.8) |
Maintenance and refurbishment | (55.0) | (49.3) |
Personnel expenses | (63.0) | (62.7) |
Depreciation and amortization | (20.2) | (17.9) |
Other operating costs (*) | (63.7) | (98.7) |
Total | (550.2) | (638.4) |
receivables in the total amount of €55.2 million (2023: €65.9 million, also containing an allowance for
average, the Group had 1,651 employees (2023: 1,745 employees) for which the personnel
expenses are presented in the property operating expenses and the administrative and
The amount of direct operating expenses (including maintenance and refurbishment)
arising from investment property that generates net rental income during the year
amounted to €538.3 million (2023: €628.3 million). The amount of direct operating
expenses (including maintenance and refurbishment) arising from investment property
that did not generate net rental income during the year amounted to €6.7 million (2023:
234
Consolidated Financial Statements
|
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AROUNDTOWN
Year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
Personnel expenses |
(31.0) |
(30.9) |
Legal and professional fees |
(13.8) |
(13.4) |
Audit and accounting expenses |
(7.6) |
(7.1) |
Marketing and other administrative expenses |
(13.3) |
(13.3) |
Total |
(65.7) |
(64.7) |
presented in the audit and accounting expenses above, as well as tax and other services
rendered by KPMG audit firm network and by other audit firms:
| Year ended December 31, |
||||
2024 |
2023 |
|||
| in € millions |
||||
KPMG |
Other |
KPMG |
Other |
|
Network |
audit firms |
Network |
audit firms |
|
Audit services |
3.2 |
3.0 |
3.4 |
3.1 |
Audit-related services |
0.7 |
0.7 |
0.3 |
0.3 |
Tax and other services |
0.1 |
1.5 |
0.2 |
0.7 |
Total |
4.0 |
5.2 |
3.9 |
4.1 |
FINANCE EXPENSES AND OTHER FINANCIAL RESULTS
Year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
Finance expenses |
||
Interest to financial institutions, bonds and |
||
third parties, net |
(221.9) |
(213.3) |
Finance expenses on lease liabilities |
(13.3) |
(16.8) |
Total |
(235.2) |
(230.1) |
Other financial results |
||
Changes in fair value of financial assets and |
||
liabilities, buybacks and early repayment costs, net |
(0.8) |
14.8 |
Finance-related costs |
(30.2) |
(29.2) |
Total |
(31.0) |
(14.4) |
235
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AROUNDTOWN
11.1 Tax rates applicable to the Group
The Company is subject to taxation under the laws of Luxembourg. The general
corporation tax rate for Luxembourg companies in 2024 is 24.94% (2023: 24.94%).
In 2024, Luxembourg announced a reduction in the corporate income tax rates. The tax
rate for companies with taxable income up to €175 thousand will decrease from 15% to
14%, and for companies with taxable income exceeding €200 thousand, it will decrease
from 17% to 16%. These changes will impact the measurement of deferred tax assets
and liabilities, as well as tax provisions. The Company has proactively evaluated the
potential effect of these changes and has adjusted its deferred tax balances accordingly
for future periods. The newly enacted tax legislation will be effective from January 1,
2025, and the new corporate tax rate for Luxembourg companies will be 23.87%.
The German subsidiaries containing real estate property are subject to taxation under
the laws of Germany. Income taxes are calculated using a federal corporate tax of 15%
for December 31, 2024 (2023: 15%), plus an annual solidarity surcharge of 5.5% (2023:
5.5%) on the amount of federal corporate taxes payable (aggregated tax rate: 15.825%).
When applicable, an additional effective rate of approximately 14.5% is imposed as
German trade tax (Gewerbesteuer). German property taxation includes taxes on the
holding of real estate property based on the location and size of the property.
The Cypriot subsidiaries are subject to taxation under the laws of Cyprus. The general
corporation tax rate for Cypriot companies is 12.5% (2023: 12.5%). Under certain
conditions interest income of the Cypriot companies may be subject to special defense
contribution at the rate of 17% (2023: 30%). In such cases this interest will be exempt
from corporation tax. In certain cases, dividends received from abroad may be subject to
special defense contribution at the rate of 17% (2023: 17%). In such case, this dividend
income will be exempt from Cyprus income (corporation) tax. Under certain conditions,
dividend income earned from Cyprus tax resident companies is exempt from special
defense contribution and Cyprus income (corporation) tax.
The Dutch subsidiaries are subject to taxation under the laws of the Netherlands. The
Dutch corporation tax rate for the financial year 2024 is 25.8% (reduced rate of 19%
applies to taxable income up to €200 thousand) (2023: 25.8% and 19%, respectively).
The United Kingdom subsidiaries containing real estate property, are subject to taxation
under the laws of the United Kingdom. Income taxes are calculated using a corporate
tax rate (also for capital gains) of 25% (reduced rate of 19% applies to taxable income
up to GBP 250 thousand) for December 31, 2024 (2023: 25% and 19%, respectively).
Where there are United Kingdom group subsidiaries this threshold is divided by the
number of United Kingdom group entities.
Subsidiaries in other jurisdictions are subject to corporate tax rate of up to 27.9%
(2023: 27.9%).
11.2 Current tax expenses
Year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
Corporate income tax |
(77.5) |
(72.1) |
Property tax |
(47.0) |
(48.3) |
Total |
(124.5) |
(120.4) |
11.3 Global minimum top-up tax
The OECD’s Pillar Two framework, which introduces a global minimum tax of 15%,
became effective in 2024 in several jurisdictions where the Group operates. The Group
falls within the scope of these rules as its consolidated revenue exceeds €750 million,
meeting the applicability threshold.
In line with the amendments to IAS 12 (Income Taxes) issued in May 2023, the Group
has applied the temporary exception to recognizing deferred taxes related to Pillar Two.
Among the jurisdictions in which the Group operates, Cyprus currently has a statutory
corporate tax rate of 12.5%, hence below the 15% minimum threshold. Based on the
Group’s assessment, the impact of Pillar Two on 2024 annual results is expected at
around €8 million. The Group continues to monitor legislative developments and will
provide further disclosures in future reporting periods as additional guidance and
implementation details become available.
236
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11.4 Movements in the deferred tax assets and liabilities
Derivative |
|||
financial |
|||
instruments and |
Fair value gains |
||
other deferred |
on investment |
||
tax liabilities |
property |
Total |
|
in € millions |
|||
Balance as at December 31, 2022 |
42.0 |
2,620.3 |
2,662.3 |
Charged to: |
|||
Consolidated statement of profit or loss |
(3.7) |
(542.5) |
(546.2) |
Other comprehensive income |
(17.7) |
(2.0) |
(19.7) |
Disposed of through deconsolidations |
- |
(10.3) |
(10.3) |
Transfer from liabilities held for sale and others |
- |
18.7 |
18.7 |
Movement in netting of deferred taxes (*) |
- |
1.7 |
1.7 |
Balance as at December 31, 2023 |
20.6 |
2,085.9 |
2,106.5 |
Charged to: |
|||
Consolidated statement of profit or loss |
(6.9) |
56.5 |
49.6 |
Other comprehensive income |
2.1 |
- |
2.1 |
Disposed of through deconsolidations |
0.3 |
(28.6) |
(28.3) |
Transfer from liabilities held for sale and others |
- |
(1.2) |
(1.2) |
Movement in netting of deferred taxes (*) |
- |
(30.7) |
(30.7) |
Balance as at December 31, 2024 |
16.1 |
2,081.9 |
2,098.0 |
Excess of deferred tax liabilities as at December 31, 2023 |
2,040.7 |
||
Excess of deferred tax liabilities as at December 31, 2024 |
2,037.4 |
As at December 31, 2024, the Group did not recognize cumulative deferred tax liabilities
amounting to €549.7 million (2023: €555.8 million) on fair value gains on investment
property due to the initial recognition exemption on acquisitions that did not meet the
definition of business combination.
Deferred tax assets
Derivative |
|||
financial |
|||
instruments and |
|||
other deferred |
Losses carried |
||
tax assets |
forward |
Total |
|
| in € millions |
|||
Balance as at December 31, 2022 |
31.7 |
33.4 |
65.1 |
Charged to: |
|||
Consolidated statement of profit or loss |
3.0 |
(6.1) |
(3.1) |
Disposed of through deconsolidations |
- |
(1.8) |
(1.8) |
Transfer from assets held for sale and others |
- |
3.9 |
3.9 |
Movement in netting of deferred taxes (*) |
- |
1.7 |
1.7 |
Balance as at December 31, 2023 |
34.7 |
31.1 |
65.8 |
Charged to: |
|||
Consolidated statement of profit or loss |
(1.3) |
38.4 |
37.1 |
Disposed of through deconsolidations |
- |
(7.5) |
(7.5) |
Transfer from assets held for sale and others |
- |
(4.1) |
(4.1) |
Movement in netting of deferred taxes (*) |
(6.7) |
(24.0) |
(30.7) |
Balance as at December 31, 2024 |
26.7 |
33.9 |
60.6 |
(*)
deferred tax assets and liabilities are netted against each other when the same taxable entity and the
same taxation authority are involved, as well as the realization period and tax nature legally allow to set
off current tax assets against current tax liabilities. As a result, as at December 31, 2024, a cumulative
amount of €196.2 million was netted (2023: €165.5 million)
As of December 31, 2024, the Group had not recognized cumulative deferred tax assets
amounting to €447.2 million (2023: €385.2 million) on carried forward losses, carried
forward interest amounts and other tax attributes (“Carried Forward Items”), as it was
not considered probable that there would be taxable profits available in the relevant
entities in the foreseeable future. Set forth below is the breakdown of the unrecognized
amounts per expiry date for the Carried Forward Items as of December 31, 2024.
237
Consolidated Financial Statements
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AROUNDTOWN
Year of expiration | Carried Forward Items | Unrecognized deferred tax assets |
| in € millions | ||
2025-2036 | 90.5 | 22.3 |
2037-2041 | 938.7 | 234.1 |
Unlimited | 1,111.4 | 190.8 |
Total | 2,140.6 | 447.2 |
11.5 Reconciliation of effective tax rate
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Profit / (loss) before tax | 446.3 | (2,849.1) |
Tax using domestic rate | 24.94% | 24.94% |
Tax computed at the statutory tax rate | 111.3 | (710.6) |
Changes in taxes on income resulting from the | ||
following factors: | ||
Group’s share in earnings from companies accounted | 10.6 | 37.4 |
for as equity-accounted investees | ||
Effect of different tax rates of subsidiaries operating | (31.4) | 225.1 |
in other jurisdictions | ||
Income and expenses on which the Group did not | 46.5 | 25.4 |
recognize deferred tax and others | ||
Total current and deferred tax expenses (income) | 137.0 | (422.7) |
Effective tax rate (in %) | 30.7 | 14.8 |
238
Consolidated Financial Statements
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AROUNDTOWN
NET EARNINGS PER SHARE ATTRIBUTABLE TO THE
OWNERS OF THE COMPANY
12.1 Basic earnings (loss) per share
The calculation of basic earnings per share for the year ended December 31, 2024, is
based on the profit attributable to the owners of €52.9 million (2023: loss of €1,987.6
million), and a weighted average number of ordinary shares outstanding of 1,093.5
million (2023: 1,093.0 million), calculated as follows:
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Profit (loss) for the year, attributable to the owners | ||
of the Company (basic) | 52.9 | (1,987.6) |
Year ended December 31, | ||
2024 | 2023 | |
in millions of shares | ||
Issued ordinary shares on January 1, net of treasury shares | 1,093.1 | 1,065.0 |
Share incentive effect (*) | 0.4 | 0.3 |
Mandatory convertible notes effect | - | 27.7 |
Weighted average number of ordinary shares | 1,093.5 | 1,093.0 |
Basic profit (loss) per share (in €) | 0.05 | (1.82) |
(*)
weighted average
amount
12.2 Diluted earnings (loss) per share
The calculation of diluted earnings per share for the year ended December 31, 2024,
is based on diluted profit attributable to the owners of €52.9 million (2023: loss of
€1,985.5 million), and a weighted average number of ordinary shares outstanding after
adjustment for the effects of all dilutive potential ordinary shares of 1,094.8 million
(2023: 1,094.5 million), calculated as follows:
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Profit (loss) for the year, attributable to the owners | 52.9 | (1,987.6) |
| of the Company (basic) | ||
Dilutive effect of the Company’s share of profit in investees | - | 2.1 |
Profit (loss) for the year, attributable to the owners | ||
| of the Company (diluted) | 52.9 | (1,985.5) |
Year ended December 31, | ||
2024 | 2023 | |
in millions of shares | ||
Issued ordinary shares on January 1, net of treasury shares | 1,093.1 | 1,065.0 |
Share incentive effect (*) | 1.7 | 1.8 |
Mandatory convertible notes effect | - | 27.7 |
Weighted average number of ordinary shares | 1,094.8 | 1,094.5 |
Diluted profit (loss) per share (in €) | 0.05 | (1.82) |
(*)
weighted average
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13.1. Reconciliation of investment property
Year ended December 31, |
||
2024 |
2023 |
|
(*) Level 3 |
(*) Level 3 |
|
in € millions |
||
Balance as at January 1 |
24,632.4 |
27,981.0 |
Plus: investment property classified as held for sale |
408.3 |
909.1 |
Total investment property |
25,040.7 |
28,890.1 |
Additions |
421.0 |
211.5 |
Modernization, pre-letting modification and capital expen |
- |
|
ditures |
345.8 |
334.6 |
Disposals (see note 13.2.1) |
(738.5) |
(1,273.1) |
Effect of foreign currency exchange differences |
125.3 |
52.4 |
Fair value adjustments |
(127.2) |
(3,174.8) |
Total investment property |
25,067.1 |
25,040.7 |
Less: investment property classified as held for sale (see note |
||
13.2.2) |
(691.8) |
(408.3) |
Balance as at December 31 |
24,375.3 |
24,632.4 |
(*) classified in accordance with the fair vale hierarchy. Since one or more of the significant inputs is not based
on observable market data, the fair value measurement is included in level 3 (see note 4 for definition)
The Group acquired investment property in the amount of €421.0 million that consisted
of hotels, residential and office properties primarily in the UK, Germany and Israel.
These acquisitions were made through initial consolidations of €330.2 million of
investment property value that by takeover had been accounted for at equity and as
asset-backed loans for which the underlying property was taken over, complemented by
€90.8 million of asset deals. The cash amount invested during 2024 in acquisitions of
investment property, capital expenditures and modernization activities and advanced
paid amounted to €471.8 million (2023: €345.6 million).
As at December 31, |
||
G eographical distribution |
||
of investment property (*) |
2024 |
2023 |
in € millions |
||
Germany |
17,432.7 |
18,079.7 |
United Kingdom |
2,539.7 |
2,299.5 |
The Netherlands |
2,046.9 |
2,101.4 |
Belgium |
711.5 |
609.9 |
Other locations |
1,644.5 |
1,541.9 |
Total |
24,375.3 |
24,632.4 |
(*) excluding investment property classified as held for sale
No investment property is located in Luxembourg, the Company’s country of domicile.
13.2 Disposals of investment property and disposal group
classified as held for sale
13.2.1 Disposals of investment property
The following table describes the amounts of assets and liabilities disposed as part
of deconsolidation of companies and asset deals took place during 2024 and 2023:
As at December 31, |
||
2024 |
2023 |
|
in € millions |
||
Investment property |
738.5 |
1,273.1 |
Other assets, net |
(55.6) |
11.5 |
Deferred tax liabilities, net |
(16.6) |
(18.0) |
Total net assets disposed of |
666.3 |
1,266.6 |
Non-controlling interests deconsolidated |
5.3 |
2.9 |
| Total consideration (*) |
662.8 |
1,221.0 |
Capital gains / (losses) |
1.8 |
(42.7) |
(*)
the total cash amount received for disposals of investment property during 2024, including prepayment for
signed future deals and proceeds from sales made in prior periods, was €712.2 million, net (2023: €959.3
million, net). The sales consideration in 2024 included vendor loans granted by the Group as a seller in the
volume of €69.5 million (2023: €228.1 million), presented as part of other non-current assets or trade and
other receivables (for the current portion thereof) in the consolidated statement of financial position.
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Disposal group classified as held for sale
The Group resolved an intention to sell several properties. These properties were
identified by the Group as either non-core, primarily due to the location or asset
type of the properties, or mature properties which upside mainly has been lifted. The
intention of the Group to dispose of non-core and / or mature properties is part of its
capital recycling plan and is following a strategic decision to increase the quality of
its portfolio and utilize the disposal proceeds into debt repayments.
Some properties are expected to be disposed through sale of subsidiaries. Accordingly,
assets and liabilities relating to these subsidiaries (“Disposal Group”) and some
properties which are expected to be disposed of through asset deals are presented
as assets held for sale and as liabilities held for sale in the consolidated statement
of financial position. As at December 31, 2024, the Group has signed contracts to
sell ca. €345 million of investment property and selling efforts of the rest classified
properties are undergoing and expected to be completed within twelve months. See
note 30 for sales completed after the reporting period.
The major classes of assets and liabilities comprising the Disposal Group classified
as held for sale are as follows:
| As at December 31, |
||
2024 |
2023 |
|
in € millions |
||
Investment property |
691.8 |
408.3 |
Cash and cash equivalents |
1.2 |
0.2 |
Other assets |
10.4 |
1.0 |
Total assets classified as held for sale |
703.4 |
409.5 |
Loans and borrowings |
56.5 |
- |
Deferred tax liabilities |
22.9 |
18.6 |
Other liabilities |
12.6 |
7.0 |
Total liabilities associated with assets held for sale |
92.0 |
25.6 |
The fair value of the properties of the Group is determined at least once a year by external,
independent and certified valuers, who are specialist in valuing real estate properties. The
prime valuers, responsible for a major part of the portfolio are Jones Lang LaSalle, Savills,
PwC and CBRE (the “Appraisers”), they are considered as the market leading valuers in the
European real estate market. The fair value of the properties was prepared in accordance
with the Royal Institute of Chartered Surveyors (RICS) Valuation – Global Standards
(current edition) as well as the standards contained within The European Group of Valuers
Associations (TEGoVA) European Valuations Standards, and in accordance with International
Valuation Standards Council (IVSC) International Valuation Standard (IVS), the International
Accounting Standard (IAS) of the IFRS as well as the current guidelines of the European
Securities and Market Authority (ESMA) based on the Market Value. This is included in
the General Principles and is adopted in the preparation of the valuations reports of the
Appraisers. Therefore, the valuation is based on internationally recognized standards.
As part of the engagement, the Company and the valuers confirm that there is no actual
or potential conflict of interest that may have influenced the valuers’ status as external
and independent. The valuation fee is determined on the scope and complexity of the
valuation report.
As at December 31, 2024, 96% (2023: 91%) of investment property has been valued using
the discounted cash flows method, 3% using the residual value approach (2023: 3%) and
1% using the comparable approach (2023: 6%).
Discounted cash flow method
Under the DCF method, fair value is estimated using assumptions regarding the benefits
and liabilities of ownership over the asset’s life including an exit or terminal value. This
method involves the projection of a series of cash flows on a real property interest. To
this projected cash flow series, an appropriate, market derived discount rate is applied
to establish the present value of the income stream associated with the asset. The exit
yield is normally separately determined and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are
determined by events such as rent reviews, lease renewal and related re-letting,
redevelopment, and refurbishment. The appropriate durations are typically driven by
market behavior that is a characteristic of the class of real property. Key unobservable
241
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input parameters for capitalization rate are determined based on historical similar
transaction evidence for yield, modified to the specific characteristic of the appraised
property (e.g., age, location and condition), pursuant to which other parameters such as
long-term vacancy are also determined. Determination of the discount rate is effectively
comprised of inflation (long term trend as of valuation date) plus a risk premium
attributed to the level of risk attached to the realization of the projected cash flows.
Periodic cash flows are typically estimated as gross income less vacancy, non-
recoverable expenses, collection losses on future rents, lease incentives, maintenance
cost, agent and commission costs and other operating and management expenses. The
series of periodic net operating income, along with an estimate of the terminal value
●
Comparable approach
Under the market comparable approach, a property’s fair value is estimated based on
comparable transactions. The market comparable approach is based upon the principle
of substitution under which a potential buyer will not pay more for the property than
it will cost to buy a comparable substitute property. The unit of comparison applied
by the Group is the price per square meter.
Determination of the key input is made, inter alia, through enquiries that have been
made by the valuers and examination of public databases, local sale offices and recent
transactions. The main components of the valuation are the location of the property,
the condition of the property with its units; provision of concierge and tenants’
facilities, provision and layout of accommodation, as well as market sentiment and
how the individual units would be received by the market. The most recent sales data
for individual units within the subject property and comparable evidence within the
immediate area will be considered and adjusted by premium according to the specifics
of the property and its units. The achieved market sales price per square meter will be
multiplied by the area of the property to achieve the property specific market value.
●
Residual value approach
The residual value assesses the various factors associated with a conversion or a new
development of a property. The goal of this method is to calculate an objective value
for the site, which is either undeveloped or sub-optimally utilized.
The residual value is determined by first calculating the net capital value of the
property after completion of the planned development project. This figure is derived by
subtracting the non-recoverable operating costs (e.g., maintenance and management
costs) from the potential gross sale value. To determine the net capital value, the
purchaser’s costs have to be deducted. The costs for the assumed development are
subtracted from the net capital value, resulting in the remainder (residuum). These
costs include building fees as well as other required fees, which are necessary for the
construction of a building, depending on its type of use. The additional construction
costs are also part of the total development costs. The following additional costs are
common for constructions: planning, construction, official review and approval costs
as well as financing required immediately for construction. The amount of additional
construction costs depends on the type of building, its finishes and the location. All
the construction and additional building costs as well as other project costs including
financing costs and developer’s profit are subtracted from the calculated gross sale
value of the completed development. The difference of the gross sale value and the
development costs results in the remainder (residuum). To acquire the residual value,
financing and additional purchasing costs for the property are deducted from this
remainder. The residual value represents the amount, which an investor would spend
for the development of the property under specific economic conditions.
Determination of the key input for applying the residual approach are similar to those
served in the DCF approach, with further reference to collecting market data (either
through public or limited databases) for adequate developer profit margin as well as
recent data for costs to develop and plausible sale prices.
242
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The key assumptions used to determine the fair value of the investment property are further
discussed below:
As at December 31, | |||
2024 | 2023 | ||
Significant | |||
Valuation technique | unobservable inputs | Range (weighted average) | |
Rent growth p.a. (%) | 0.0 – 3.1 (1.9) | 0.1 – 3.0 (2.0) | |
DCF method | Discount rate (%) | 2.8 – 14.0 (6.3) | 3.3 – 13.3 (6.1) |
Capitalization rate (%) | 2.1 – 15.0 (5.1) | 2.1 – 16.3 (5.1) | |
| Market comparable | Price per sqm (in €) | 1,100 – 13,900 (5,900) | 2,000 – 13,200 (4,100) |
approach | |||
Rent price per sqm (in €) | 17.8 – 62.7 (28.2) | 7.7 – 59.3 (25.8) | |
| Residual value | Sales price per sqm (in €) | 3,100 – 14,800 (7,300) | 1,550 – 14,000 (7,100) |
| approach | Development cost per sqm (in €) | 1,100 – 7,000 (3,700) | 800 – 7,200 (3,700) |
Developer margin (%) | 5.0 – 21.0 (14.5) | 7.5 – 20.0 (13.0) | |
Significant increases (decreases) in estimated rental value and rent growth per annum in
isolation would result in a significantly higher (lower) fair value of the properties. Significant
increases (decreases) in the long-term vacancy rate and discount rate (and exit yield) in
isolation would result in a significantly lower (higher) fair value.
Generally, a change in the assumption made for the estimated rental value is accompanied by
a directionally similar change in the rent growth per annum and discount rate (and exit yield),
and an opposite change in the long-term vacancy rate.
The table below presents the weighted average and range of the discount rate and capitalization
rate for nearly all the portfolio, per asset type:
| As at December 31, | |||||
2024 | 2023 | ||||
Discount | Capitalization | Discount | Capitalization | ||
Asset type | Parameter | rate | rate | rate | rate |
Office | Range | 3.7% - 11.2% | 3.5% - 11.9% | 4.0% - 11.8% | 3.6% - 11.5% |
Average | 6.4% | 5.4% | 6.3% | 5.4% | |
| Hotel | Range | 3.9% - 14.0% | 3.6% - 12.0% | 3.8% - 13.3% | 3.5% - 11.1% |
Average | 7.1% | 5.7% | 7.4% | 5.9% | |
| Residential | Range | 2.8% - 9.0% | 2.1% - 7.5% | 4.0% - 8.4% | 2.1% - 7.8% |
Average | 5.4% | 4.2% | 5.2% | 4.0% | |
| Retail | Range | 3.8% - 9.4% | 3.6% - 11.5% | 4.3% - 9.8% | 3.6% - 10.4% |
Average | 6.4% | 6.0% | 6.7% | 6.1% | |
Logistics/ | Range | 3.0% - 9.9% | 3.6% - 15.0% | 3.3% - 9.9% | 3.0% - 16.3% |
wholesale/ | Average | 6.9% | 6.4% | 5.7% | 5.1% |
other | |||||
●
Highest and best use
As at December 31, 2024, the current use of all investment property is considered the highest
and best use, except for 5.7% (2023: 5.3%) of the investment property, for which the Group deter
-
mined that fair value based on the development and sale of such properties is the highest and
best use. These properties are currently being used to earn rental income, in line with the Group’s
business model of buying and holding investment property to earn rental income. By achieving
increased rental value and implementing development projects, the value of these properties
is expected to grow further and reflect the value expected for realization of the investments.
●
Climate-related considerations
The Group’s external appraisers assess certain physical climate-related risks (e.g., flood risk)
as part of their valuation methodology. Where relevant, these risks are implicitly reflected in
the determination of risk premiums included in capitalization rates, which in turn affect the
calculated fair values of investment properties. Other physical risks, such as heavy storms,
heat waves, earthquakes, and wildfires, have not been incorporated into valuations, as the
probability and frequency of occurrence were determined to be negligible based on current
risk assessments. The Group acknowledges that transition risks, including regulatory changes
related to energy efficiency and carbon reduction targets, may have a material impact on asset
valuations over the next several years. However, due to uncertainties regarding how relevant
EU Directives will be implemented at the national level in the Group’s operating countries, a
quantified impact on fair values is not yet available.
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While the Group actively monitors climate risks, data limitations make it challenging to
translate natural hazard projections from official climate models into precise financial
impacts on asset valuations. Most climate-related physical risks are mitigated through
GOODWILL AND INTANGIBLE ASSETS
Computer | |||
software and | |||
other intangible | |||
Goodwill | assets | Total | |
| in € millions | |||
COST | |||
Balance as at December 31, 2022 | 1,699.0 | 33.9 | 1,732.9 |
Additions, net | - | 1.4 | 1.4 |
Balance as at December 31, 2023 | 1,699.0 | 35.3 | 1,734.3 |
Additions, net | - | 2.7 | 2.7 |
Balance as at December 31, 2024 | 1,699.0 | 38.0 | 1,737.0 |
IMPAIRMENT / AMORTIZATION | |||
Balance as at December 31, 2022 | 408.8 | 16.0 | 424.8 |
Amortization for the year | - | 6.8 | 6.8 |
Impairment for the year | 137.0 | - | 137.0 |
Balance as at December 31, 2023 | 545.8 | 22.8 | 568.6 |
Amortization for the year | - | 2.8 | 2.8 |
Impairment for the year | 46.0 | - | 46.0 |
Balance as at December 31, 2024 | 591.8 | 25.6 | 617.4 |
CARRYING AMOUNTS | |||
Balance as at December 31, 2023 | 1,153.2 | 12.5 | 1,165.7 |
Balance as at December 31, 2024 | 1,107.2 | 12.4 | 1,119.6 |
In July 2021, following the business combination with GCP, goodwill in the amount of
€862.9 million was recognized. This followed the goodwill recognition of €822.0 million
in 2020 arising from the business combination with TLG. The goodwill initially recognized
in both business combination transactions is attributable mainly to deferred tax liabilities
initially consolidated therein; while most of the identifiable assets and assumed liabilities
were initially recognized at their fair value, the deferred tax liabilities were calculated
pursuant to IAS 12 principles and reflected the nominal tax values of the variance
between the real estate portfolios’ carrying amount for tax purposes and their fair value.
The Group considers the operational real estate portfolios under TLG and GCP as each
one being a single CGU for internal management purposes to which the full amount of
goodwill is allocated. For GCP, there are some additional assets allocated to the CGU
that are expected to benefit from the business combination. The Company assesses
on an annual basis the impairment of each of the goodwill items by comparing the
carrying amount of the CGU (together with the attributed goodwill and adjusted for the
amount of the deferred tax liability based on temporary differences initially recognized
in the business combination but not reversed at the date of the impairment test) to their
recoverable amount. The recoverable amount of a CGU is calculated as the higher of (a)
fair value less costs of disposal and (b) value in use.
During the year 2024, the goodwill on GCP and TLG was impaired in a total amount of
€46.0 million, and as of December 31, 2024, amounted to €525.4 million and €572.4
million, respectively.
For testing of the goodwill on GCP, the examination of the carrying amount had to include
all the business units and activities within the group of GCP to which the goodwill relates
(i.e., the CGU assets, being the investment property, goodwill, specific additional financial
assets and deferred tax liabilities recognized during the business combination but not
yet reversed) and amounted to €8,900.0 million as at December 31, 2024 (2023: €8,921.8
million). The carrying amount was compared to the recoverable amount being the fair
value of the CGU less assumed costs of disposal that amounted to €8,885.6 million (2023:
recoverable amount of €8,861.5 million, being the fair value less costs of disposal) and
therefore concluded an impairment of €14.4 million on the goodwill on GCP for 2024
(2023: €60.3 million) to a residual amount of €525.4 million. The Company assumed the
fair value less costs of disposal as of December 31, 2024, was higher than the value in
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use, mainly due to the increased cost of capital that would affect the discounted cash
flows model on which the value in use is based.
For testing of the goodwill on TLG, the carrying CGU amount as at December 31, 2024,
amounted to €2,524.9 million (2023: €2,725.2 million) (being the investment property,
goodwill and deferred tax liabilities recognized during the business combination but not
yet reversed). The carrying amount was compared to the recoverable amount being the
fair value of the CGU less assumed costs of disposal that amounted to €2,493.3 million
(2023: recoverable amount of €2,648.5 million, being the fair value less costs of disposal)
and therefore concluded with an impairment of €31.6 million on the goodwill on TLG for
2024 (2023: €76.7 million) to a residual amount of €572.4 million. The Company assumed
the fair value less costs of disposal as of December 31, 2024, was higher than the value
in use, mainly due to the increased cost of capital that would affect the discounted cash
flows model on which the value in use is based.
The fair value of the investment property used in the impairment tests of TLG and
GCP are included in the investment property valuations of the Company and whose key
parameters are elaborated in note 13.3. The assumed costs of disposal parameter utilized
in the impairment assessments was 75 basis points. Any change of +/- 10 basis points in
the assumed costs of disposal would lead to a further / less impairment of €11.1 million
Owner- | Furniture, | ||
occupied | fixtures and office | ||
properties (*) | equipment | Total | |
in € millions | |||
COST | |||
Balance as at December 31, 2022 | (**) 138.2 | (**) 95.7 | 233.9 |
Additions, net | 14.9 | 13.1 | 28.0 |
Revaluations | (***) (2.8) | - | (2.8) |
Classified as held for sale | - | (0.3) | (0.3) |
Balance as at December 31, 2023 | (**) 150.3 | (**) 108.5 | 258.8 |
Additions, net | 1.8 | 14.9 | 16.7 |
Initial consolidations | 28.2 | 7.0 | 35.2 |
Revaluations | (***) 0.4 | - | 0.4 |
Deconsolidations | (38.9) | (0.2) | (39.1) |
Balance as at December 31, 2024 | 141.8 | 130.2 | 272.0 |
DEPRECIATION | |||
Balance as at December 31, 2022 | 4.9 | 29.3 | 34.2 |
Depreciation for the year | 3.3 | 7.8 | 11.1 |
Balance as at December 31, 2023 | (**) 8.2 | (**) 37.1 | 45.3 |
Depreciation for the year | 2.1 | 15.3 | 17.4 |
Balance as at December 31, 2024 | 10.3 | 52.4 | 62.7 |
CARRYING AMOUNTS | |||
Balance as at December 31, 2023 | (**) 142.1 | (**) 71.4 | 213.5 |
Balance as at December 31, 2024 | 131.5 | 77.8 | 209.3 |
(*)
owner-occupied properties are measured at fair value and are classified in accordance with the fair value hierarchy
(see note 4). Since one or more of the significant input parameters is not based on observable market data, the fair
value measurement is included in level 3. The revaluation amount presented is before tax
(**)
reclassified
(***) amount excluding deferred tax effect
Property and equipment as at December 31, 2024 included right-of-use assets of €29.6
million (2023: €67.1 million) related to leased properties that do not meet the definition
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16.1 Reconciliation of investment in equity-accounted investees
Year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
Balance as at January 1 |
1,086.5 |
1,291.9 |
(Disposals) / additions, net |
(8.4) |
117.4 |
Dividends received |
(53.3) |
(39.2) |
Share of results from investees |
(42.5) |
(149.8) |
Changes through OCI and other equity reserves |
(0.8) |
1.3 |
Changes in investees and initial consolidations |
(55.8) |
(135.1) |
Balance as at December 31 |
925.7 |
1,086.5 |
(a)
during 2024, the cash invested in equity-accounted investments amounted to €21.1 and cash received
from equity-accounted investments amounted to €17.8 million (2023: €50.1 million and €11.1 million,
respectively).
(b)
in 2024, the Group obtained control over real estate portfolio and initially consolidated investment
property with value of €53.0 (2023: €196 million) and owner-occupied property with value of €6.8 million
16.2 Details of material equity-accounted investees
All the investments included in the equity-accounted investee balance are accounted
for using the equity method in these consolidated financial statements as set out in the
Group’s accounting policies in note 3.
Details of each of the Group’s material equity-accounted investees as at December 31,
2024 and 2023 are as follow:
Rate of effective |
|||||
Main place of |
ownership interest |
||||
Principal |
Place of |
principal |
by the Group as at |
||
Name of investee |
activity |
incorporation |
activities |
December 31, |
|
2024 | 2023 |
||||
in % |
|||||
Globalworth Real |
|||||
Estate Investments |
|||||
Limited (through 50% |
|||||
| in Tevat Limited that |
Real estate |
Guernsey |
Poland and |
30.43 | 30.38 |
| is a joint venture in |
Romania |
||||
which the Group has |
|||||
joint control) |
|||||
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16.3 Summarized financial information in respect of each of the
Group’s material joint ventures is set out below:
As at and for the year ended December 31 |
||
Globalworth Real Estate |
||
Investments Limited (“GWI”) |
2024 |
2023 |
in € millions |
||
Current assets |
429.0 |
480.1 |
Of which cash and cash equivalents |
333.6 |
396.3 |
Non-current assets |
2,620.7 |
2,965.1 |
Of which investment property |
2,585.3 |
2,843.1 |
Current liabilities |
201.2 |
101.3 |
Non-current liabilities |
1,329.6 |
1,741.3 |
Of which loans, borrowings and bonds |
1,178.3 |
1,574.8 |
Equity attributable to the owners |
1,519.0 |
1,601.1 |
Revenue |
238.3 |
240.4 |
Finance expenses, net |
68.5 |
33.9 |
Current and deferred tax income |
3.0 |
7.7 |
Net loss attributed to the owners |
(77.8) |
(54.2) |
Total comprehensive loss attributed to the owners |
(81.5) |
(54.2) |
Quoted market price per share (in €) |
2.7 |
2.6 |
Group’s share of loss in the joint venture |
(19.7) |
(13.6) |
Dividends received in the Group from the joint venture (*) |
16.5 |
20.1 |
Impairment of investment |
(4.8) |
(26.2) |
(*) for all interim dividends announced in March 2024, August 2024, March 2023 and August 2023, GWI
offered a scrip dividend alternative to its shareholders, so instead of cash dividend, the shareholder
would get new shares in GWI at agreed prices). The Group accepted the scrip option for those dividends
and consequently received new 8.2 million of GWI shares in 2024 (9.4 million in 2023), instead of cash
dividend, that increased its proportional stake to 30.43% as at December 31, 2024.
Reconciliation of the above summarized financial
information to the carrying amount:
As at and for the year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
Equity attributable to the owners |
1,519.0 |
1,601.1 |
Group’s interest |
30.43% |
30.38% |
Group’s share |
462.2 |
486.4 |
Surplus on investment |
0.3 |
0.2 |
Total carrying amount of equity-accounted investee |
462.5 |
486.6 |
16.4 Aggregate information of investment in equity-accounted
investees that are not individually material
Information referring to Associates
As at and for the year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
The Group’s share of (loss) / profit |
(3.6) |
(84.0) |
The Group’s share of other comprehensive income |
(2.0) |
3.0 |
The Group’s share of total comprehensive income |
(5.6) |
(81.0) |
Dividends received in the Group from the investees |
34.4 |
14.1 |
Aggregate carrying amount of the Group’s interests |
||
| and loans in these investments |
260.4 |
415.5 |
Information referring to Joint Ventures
As at and for the year ended December 31, |
||
2024 |
2023 |
|
in € millions |
||
The Group’s share of (loss) / profit |
(14.4) |
(26.0) |
The Group’s share of other comprehensive income |
1.2 |
(1.7) |
The Group’s share of total comprehensive income |
(13.2) |
(27.7) |
Dividends received in the Group from the investees |
2.4 |
5.0 |
Aggregate carrying amount of the Group’s interests |
||
| and loans in these investments |
202.8 |
184.4 |
247
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As at December 31, |
|||
2024 |
2023 |
||
in € millions |
|||
Tenancy deposits |
(1) |
66.0 |
65.3 |
Trade receivables |
(2) |
46.6 |
50.5 |
Investment in non-current financial assets |
(3) |
1,042.7 |
1,325.9 |
Other balances |
6.5 |
16.4 |
|
Total |
1,161.8 |
1,458.1 |
|
1. tenancy deposits mainly include several months net rent from the tenants which is paid at the beginning
of the lease. The deposits are considered a security payment by the tenant. The Group can primarily use
these funds, when the tenant has unpaid debts or causes damages to the property. Experience shows that
the majority of the leases are long term and therefore the deposits are presented as long term assets
2. consists of mainly the revenue straight-lining effect arising from the rent-free granted to tenants
3. consists of mainly non-current investments in loans connected with future real-estate transactions (with
maturities primarily by 2027 and an annual interest rate of up to 10% p.a.), long-term deposits and the
non-current portion of the loans provided by the Group as a seller (vendor loans). The vendor loans have
maturities between 2025 and 2026, carrying weighted average interest rates of ca. 5% p.a. and are secured
against the properties sold at an LTV in the range of 40%-70%. An amount of €192.6 million (2023: €161.0
million) is accounted for at fair value through profit or loss and includes mainly investment in various
As at December 31, |
|||
2024 |
2023 |
||
in € millions |
|||
Rent and other receivables |
77.2 |
114.6 |
|
Operating costs receivables |
(1) |
467.9 |
499.0 |
Prepaid expenses |
29.8 |
28.8 |
|
Tax receivable from authorities |
130.6 |
132.8 |
|
Other short-term financial assets |
(2) |
329.6 |
233.1 |
Total |
1,035.1 |
1,008.3 |
|
1. Operating costs receivables represent an unconditional right to consideration in exchange for services that
the Group has transferred to tenants. The Group recognizes an operating income based on contractual rights
for providing ancillary services and for other charges billed to tenants, as the performance obligations are
satisfied, that is, as services are rendered. Mainly once a year, the operating cost receivables are settled
against prepayments received from tenants on operating costs.
2. The balance mainly includes the current portion of vendor loans granted by the Group as part of the sale
transactions and of loans in connection with future real estate transactions.
The Group recognized an allowance for expected credit losses and other impairments on
trade and other receivables in the total amount of €55.2 million (2023: €65.9 million)
248
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19.1 Equity attributable to the owners of the Company
Share capital
| As at December 31, |
||||
2024 |
2023 |
|||
Number of shares |
in € millions |
Number of shares |
in € millions |
|
Authorized |
||||
Ordinary shares of |
||||
| €0.01 each |
3,000,000,000 |
30.0 |
3,000,000,000 |
30.0 |
Issued and fully paid |
||||
Balance as at January 1 |
1,537,025,609 |
15.4 |
1,537,025,609 |
15.4 |
Balance at the end of |
||||
| the year |
1,537,025,609 |
15.4 |
1,537,025,609 |
15.4 |
Issued capital
Treasury shares
2024 |
2023 |
|
Number of shares |
||
Balance as at January 1 |
443,887,213 |
471,981,352 |
Delivered as part of mandatory convertible |
- |
(27,691,319) |
notes settlement (see note 19.1.4) |
||
Delivered as part of share-based payment |
(455,150) |
(402,820) |
Balance as at December 31 |
443,432,063 |
443,887,213 |
Rate from the total share capital of the |
||
Company (in %) |
28.85 |
28.88 |
The treasury shares were acquired by the Group via tender offers and buyback
programs (pursuant to resolutions taken by the Company’s Board of Directors
that followed the authorization received by the ordinary general meeting held
in May 2020 to buying back of own shares) and have been serving the Company
in settling of scrip dividends and other share-based transactions.
The treasury shares are accounted for at their original purchase price and are not
subsequently revaluated. Carrying amount as at December 31, 2024 was €2,891.0
million (2023: €2,893.3 million). Upon sale or delivery, the amount received is
recognized as an increase in equity and the resulting surplus or deficit on the
transaction is presented in the share premium.
The shares bought back, and which are held in treasury by the Company and the
Company’s wholly owned affiliates are suspended from voting and dividend rights.
In other cases, shares held in treasury are also suspended from voting rights but
The capital reserves include share premium derived directly from the capital
increases that took place since the date of incorporation (including the proceeds
received by placing the mandatory convertible note) and from conversions
of convertible bonds into ordinary shares and can be distributed at any time.
The account also consists of the share-based payment reserve and the other
comprehensive income components arising from the hedge accounting and the
foreign currency translations, which temporarily cannot be distributed.
Legal reserve
The Company is required to allocate a minimum of 5% of its annual net
increase to a legal reserve after deduction of any losses brought forward, until
this reserve equals 10% of the subscribed share capital. The appropriation to
legal reserve is affected after approval of the annual general meeting of the
shareholders. This reserve is presented under Share premium and capital reserves
in the consolidated statement of changes in shareholders equity and cannot be
19.1.4
Mandatory convertible notes
In March 2023, the Company delivered to the mandatory convertible notes’
investors 27,691,319 of its own shares from the Company’s treasury shares to
settle the mandatory convertible notes originally issued in March 2020, according
to which the notes shall be mandatorily converted into shares of the Company in
the following three years after issuance, using a preset conversion price (dividend
adjusted). The delivered treasury shares amounted to €138.5 million which was
the historical cost upon their buyback by the Company.
19.2 Equity attributable to perpetual notes investors
19.2.1
Overview of the Group’s perpetual notes
As described in the material accounting policies, these notes are accounted for as
equity instruments – the issuer may, at its sole discretion, elect to defer the payment of
coupons on the notes. These unpaid coupon arrears must be paid by the issuer upon the
occurrence of certain events, including but not limited to dividends, distributions or other
payments made to instruments such as the Company’s (or GCP’s) ordinary shares, which
rank junior to the perpetual notes. Any such deferred amounts shall not be compounded.
The principal value of the notes may be redeemed at the issuer’s sole discretion and on
certain dates as detailed below under “Next possible Call Date”. If the Group decides not
to redeem a perpetual note, the annual coupon rates for following periods are updated
according to the “Next Reset Margin” (updated every 5 years from the time when the
perpetual note is not called by the Group, presented as the “Next Reset Date”), and the
next possible call date shall be in each subsequent year.
Set out below are the outstanding nominal values as of December 31, 2024 (the
carrying amounts as of December 31, 2024 and 2023 are €4,540.6 million and €4,756.9
million, respectively):
Annual coupon | |||||||||
Note / | Nominal amount in | Nominal | rate until Next | Next possible | Next | Next | |||
Issuer | ISIN | footnote | Currency | original currency | amount in euro | Reset Date | Call Date | Reset Date | Reset Margin |
in millions | in € millions | % | % | ||||||
Aroundtown SA | XS2027946610 | 19.2.2, 19.2.3 | EUR | 61.5 | 61.5 | 2.875 | 01/2025 | 01/2025 | 3.460 + 5Y Mid-Swap |
Grand City Properties S.A. | XS2271225281 | EUR | 700.0 | 700.0 | 1.500 | 03/2026 | 06/2026 | 2.184 + 5Y Mid-Swap | |
Aroundtown SA | XS2287744721 | EUR | 578.8 | 578.8 | 1.625 | 04/2026 | 07/2026 | 2.419 + 5Y Mid-Swap | |
ATF Netherlands B.V. | XS1508392625 | 19.2.2 | EUR | 90 | 90 | 7.078 | 01/2025 | 01/2028 | 4.625 + 5Y Mid-Swap |
Grand City Properties S.A. | XS1491364953 | 19.2.2 | EUR | 48.4 | 48.4 | 6.332 | 01/2025 | 01/2028 | 3.887 + 5Y Mid-Swap |
AT Securities B.V. | XS1634523754 | (a), (b), 19.2.2 | USD | 67.4 | 62.9 | 5.756 | 07/2025 | 07/2028 | 3.796 + 5Y Mid-Swap |
Grand City Properties S.A. | XS1811181566 | 19.2.2 | EUR | 25.1 | 25.1 | 5.901 | 10/2025 | 10/2028 | 2.682 + 5Y Mid-Swap |
Aroundtown SA | XS1752984440 | 19.2.2, 19.2.3 | EUR | 93.7 | 93.7 | 4.542 | 01/2025 | 01/2029 | 2.250 + 5Y Mid-Swap |
Aroundtown Finance S.à.r.l. | XS2799493825 | (c) | EUR | 618.4 | 618.4 | 5.000 | 04/2029 | 07/2029 | 2.349 + 5Y Mid-Swap |
Aroundtown SA | XS2017788592 | (a), (b), 19.2.3 | GBP | 19.3 | 22.9 | 6.850 | 06/2025 | 06/2029 | 4.627 + 5Y Mid-Swap |
Aroundtown Finance S.à.r.l. | XS2812484215 | (b), (c) | GBP | 344.8 | 403.9 | 6.950 | 05/2029 | 08/2029 | 4.493 + 5Y Mid-Swap |
Aroundtown Finance S.à.r.l. | XS2812484728 | (b), (c) | USD | 493.7 | 462.0 | 5.836 | 08/2029 | 11/2029 | 3.163 + 5Y Mid-Swap |
Aroundtown SA | XS2055106210 | 19.2.3 | EUR | 155.3 | 155.3 | 6.193 | 12/2025 | 12/2029 | 4.230 + 5Y Mid-Swap |
Aroundtown Finance S.à.r.l. | XS2799494120 | (c) | EUR | 722.2 | 722.2 | 7.125 | 01/2030 | 04/2030 | 4.508 + 5Y Mid-Swap |
Grand City Properties Finance S.à.r.l. | XS2799494633 | (c) | EUR | 431.7 | 431.7 | 6.125 | 01/2030 | 04/2030 | 3.508 + 5Y Mid-Swap |
(a)
the euro amount is based on the historical rate as of placement of the notes
(b)
effective euro coupon rate using cross-currency swap
(c)
issued as part of the Perpetual Notes Offers in 2024 – see note 19.2.2
249
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19.2.2
Exchange and tender offers
In April 2024, following resolutions taken by the Board of Directors of both the
Company and GCP, each, the Company and GCP, executed voluntary exchange and
tender offers (the “April Offers”) to the holders of a total of eight outstanding
perpetual notes (including those issued by the Company’s subsidiaries) that were
not called in 2023 and 2024, and for those with first call dates approaching in
the next 12 months.
Under the April Offers, holders of the relevant existing perpetual notes had the
opportunity to exchange existing eligible holdings to one of either:
(i)
new perpetual notes at a relevant exchange ratio and a cash amount for
participating in the exchange; or
(ii) new perpetual notes at a relevant exchange ratio, a cash amount for
participating in the exchange, and 15-20% redemption of their exchanged notes
for cash at discount forming a small premium over the market prices prevailing
prior to the April Offers
In September 2024, another exchange and tender offer (the “September Offers”,
and together with April Offers – the “Perpetual Notes Offers”) was executed by
the Company and GCP, under which the holders could choose between:
(i)
new perpetual notes at a relevant exchange ratio; or
(ii) new perpetual notes at a relevant exchange ratio, and 20% redemption of their
exchanged notes for cash at discount forming a small premium over the market
prices prevailing prior to the September Offers.
Set out below are the Perpetual Notes Offers’ results:
Principal amount | Thereof principal | Thereof principal | ||||
outstanding prior to the | Principal amount | amount redeemed at | Principal amount | amount redeemed at | ||
Perpetual notes series tendered | Original currency | Perpetual Notes Offers | accepted | discount | accepted | discount |
(ISIN) | (in millions of original currency) | (in € millions) | ||||
XS1508392625 | EUR | 368.9 | 278.9 | 15.7 | 278.9 | 15.7 |
XS2055106210 | EUR | 600.0 | 443.7 | 24.8 | 443.7 | 24.8 |
XS1752984440 | EUR | 394.5 | 300.8 | 21.4 | 300.8 | 21.4 |
XS2027946610 | EUR | 500.0 | 438.2 | 44.0 | 438.2 | 44.0 |
XS1491364953 (1) | EUR | 200.0 | 151.6 | 13.2 | 151.6 | 13.2 |
XS1811181566 (1) | EUR | 350.0 | 322.8 | 22.5 | 322.8 | 22.5 |
XS1634523754 | USD | 641.5 | 572.1 | 61.8 | 500.4 (2) | 54.1 (2) |
XS2017788592 | GBP | 400.0 | 380.7 | 34.9 | 426.2 (2) | 39.1 (2) |
Total principal amount accepted in the Perpetual Notes Offers and of which redeemed at discount (in € millions): | 2,862.6 | 234.7 | ||||
(1)
within GCP group
(2)
exchanged / redeemed nominal values at historical rate as of original placement of the notes
250
Consolidated Financial Statements
|
SA
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251
Consolidated Financial Statements
|
SA
AROUNDTOWN
The Perpetual Notes Offers resulted in a high average acceptance rate of ca.
85% of the tendered nominal values (being ca. €2.9 billion aggregate nominal
value of existing perpetual notes). Consequently, the Group issued €2.6 billion
of new perpetual notes across 5 different series (detailed in the table below)
with extended dates for reset of margins when not called by the Group and
simultaneously redeemed at discount €234.7 million nominal value of existing
perpetual notes as presented in the table above.
The total cash paid in the Perpetual Notes Offers (including for settling accrued
coupons attributed to the accepted notes and net of transaction costs incurred
in placing the new notes), as well as in buybacks performed in the secondary
market, amounted to €363.8 million (in 2023, secondary market cash buybacks
of €8.0 million), in addition to the €122.0 million of coupons paid in 2024 (in
2023: €118.2 million).
19.2.3. Decision not to exercise options to call
During 2023, following a resolution made by the board of directors of the
Companies’, the Company announced the decision not to exercise the option to
voluntarily redeem $641.5 million perpetual notes with first call date in July 2023
issued by AT Securities B.V. (a wholly owned subsidiary of the Company) and the
€350 million perpetual notes with first call date in October 2023 issued by GCP.
Consequently, the coupons on these perpetual notes starting from July 2023 and
October 2023 were set to be 5-year Mid-Swap rate plus a margin of 3.546% p.a.
(total coupon rate of 7.75% p.a., swapped into a euro coupon of 5.756% p.a.), and
5-year Mid-Swap rate plus a margin of 2.432% p.a. (total coupon rate of 5.9% p.a.).
In December 2023, a similar resolution was made, pursuant to which the Company
decided not to voluntarily redeem €394.5 million outstanding nominal value of
its 2.125% perpetual notes with first call date on January 17, 2024. As stipulated
in the terms and conditions of this perpetual note series, the coupon rate starting
January 2024 was set to be at 5-year Mid-Swap rate plus margin of 2.0% p.a. (total
coupon rate of 4.542% p.a.), with the next coupon rate reset date in January 2029.
In May 2024, a similar resolution was made for the Company’s £20.4 million
outstanding nominal value (after the Perpetual Notes Offers described in note
19.2.2, nominal value of £19.3 million was left outstanding) of its 4.75% perpetual
notes with first call date on June 25, 2024 (the “GBP Notes”). As stipulated in the
terms and conditions of the GBP Notes, the coupon rate starting from June 2024
was set to be at 5-year Mid-Swap rate plus margin of 4.377% p.a. (total coupon
rate of 8.521% p.a., subsequently swapped into 6.85% p.a. on a fixed euro notional
amount) with the next coupon rate reset date in June 2029.
In November 2024, the Company announced the decision not to voluntarily
redeem its €155.3 million and €61.5 million outstanding nominal value of its
3.375% and 2.875% perpetual notes with first call date on December 23, 2024,
and January 12, 2025, respectively (the “EUR Notes”). As stipulated in the terms
and conditions of these EUR Notes, the coupon rate starting from December 2024
and January 2025 was set to be at 5-year Mid-Swap rate plus margin of 3.98% p.a.
(total coupon rate of 6.193%) and 5-year Mid-Swap rate plus margin of 3.46% p.a.
(total coupon rate of 5.871%), with the next coupon rate reset date in December
2029 and January 2030, respectively.
The Group has the option to redeem the EUR Notes and GBP Notes, same for any
other perpetual note for which the first call date to voluntarily redeem has passed,
at every future coupon payment date, and these have been and will continue
being accounted for as equity instruments in the consolidated statement of
financial position.
252
Consolidated Financial Statements
|
SA
AROUNDTOWN
19.3.1
Reconciliation of non-controlling interest:
in € millions | ||
Balance at December 31, 2022 | 3,490.4 | |
Share of loss for the year | (592.2) | |
Share of OCI for the year | 1.2 | |
Transactions and dividend with/to NCI, and initial consolidations | (1) | (149.9) |
Balance as at December 31, 2023 | 2,749.5 | |
Share of profit for the year | 53.0 | |
Share of OCI for the year | 6.2 | |
Transactions and dividend with/to NCI, and initial consolidations | (2) | 30.2 |
Balance as at December 31, 2024 | 2,838.9 |
(1) Transactions in 2023
An amount of €0.2 million of NCI increased due to: initial consolidations of €3.1 million that
took place during 2023, offset by €2.9 million of deconsolidated NCI.
During 2023, the Company changed its holding rate in subsidiaries within the Group, thereof
mainly an increase in GCP (increase in holding rate from 60.11% to 62.68% as at December 31,
2023), that led to a total decrease of €90.1 million in the NCI amount (the negative cash effect
of these acquisitions amounted to €33.8 million). The effect on the shareholders’ equity was
increase of €56.9 million that reflected the variance between the NCI book value and acquisition
price). Furthermore, the Group subsidiaries distributed dividends to the NCI in the amount of
€60.0 million, thereof €50.6 million paid in cash.
(2) Transactions in 2024
An amount of €37.5 million of NCI increased due to: initial consolidations of €42.8 million that
took place during 2024, offset by €5.3 million of deconsolidated NCI.
During 2024, the Company changed its holding rate in subsidiaries within the Group, including a
transaction made in December 2024, whereby GCP sold most of its own shares held in treasury to
several investors, leading to a total increase of €44.4 million in the NCI amount (the cash effect
of these acquisitions amounted to proceeds of €47.3 million). The effect on the shareholders’
equity was increase of €8.6 million that reflected the variance between the NCI book value and
acquisition / selling price). Furthermore, the Group subsidiaries distributed dividends to the NCI
in the amount of €51.7 million, thereof €50.3 million paid in cash.
253
Consolidated Financial Statements
|
SA
AROUNDTOWN
The following are subsidiaries that have material NCI reflected in the consolidated
financial statements of the Group:
19.3.2 TLG Immobilien AG
TLG Immobilien AG is an Aktiengesellschaft (stock corporation, delisted from
trade in December 2021) incorporated in Germany with its registered office at 1,
Alexanderstraße, 10178 Berlin, Germany. It holds commercial real estate portfolio
in Germany that consists of office, retail and hotel properties.
Summary of the financial information of the subsidiary, including business
combination adjustments (together: “Financial Information”), and holding rate
from the Group’s point of view:
As at and for the year ended | ||
December 31, | ||
2024 | 2023 | |
NCI percentage (also reflects the voting rights) | 11.75% | 11.89% |
as at the year-end | ||
in € millions | ||
Accumulated amount of NCI presented in the Group | 333.2 | 352.1 |
Loss allocated to NCI presented in the Group | (0.3) | (39.4) |
Dividend paid to NCI | 12.5 | 11.7 |
Financial Information of TLG: | ||
Current assets | 638.8 | 672.1 |
Of which cash and cash equivalents | 264.3 | 389.6 |
Non-current assets | 4,100.1 | 4,239.5 |
Of which investment property | 2,406.3 | 2,613.2 |
Current liabilities | 326.1 | 173.0 |
Non-current liabilities | 1,722.1 | 1,992.9 |
Of which loans, borrowings and bonds | 980.3 | 1,189.5 |
Total equity | 2,690.7 | 2,745.7 |
Net asset attributable to NCI | 316.2 | 326.5 |
Revenue | 142.0 | 173.9 |
Net profit / (loss) | 43.7 | (329.1) |
Cash flows from operating activities | 62.6 | 60.6 |
Cash flows from investing activities | 132.6 | 411.3 |
Cash flows used in financing activities | (320.7) | (223.3) |
Net change in cash and cash equivalents | (125.5) | 248.6 |
254
Consolidated Financial Statements
|
SA
AROUNDTOWN
19.3.3. Grand City Properties S.A.
Grand City Properties S.A. was incorporated in Grand Duchy of Luxembourg as a
Société anonyme (public limited liability company). Its registered office is at 37,
Boulevard Joseph II, L-1840 Luxembourg.
GCP is a specialist in residential real estate, investing in value-add opportunities
in densely populated areas, predominantly in Germany as well as London. GCP’s
strategy is to improve its properties through intensive tenant management and
create value by subsequently raising occupancy and rental levels. GCP’s shares
are listed on the Prime Standard of the Frankfurt Stock Exchange.
Summary of the financial information of the subsidiary, excluding business
combination adjustments, and holding rate from the Group’s point of view:
As at and for the year ended | ||
December 31, | ||
2024 | 2023 | |
NCI percentage (also reflects the voting rights) as at the | 38.14% | 37.32% |
year-end | ||
in € millions | ||
Accumulated amount of NCI presented in the Group | 1,480.1 | 1,405.2 |
Profit / (loss) allocated to NCI presented in the Group | 80.2 | (279.4) |
OCI allocated to NCI presented in the Group | 6.1 | 1.2 |
Dividend paid to NCI | 17.1 | 17.0 |
Financial Information of GCP: (*) | ||
Current assets | 2,201.9 | 1,840.5 |
Of which cash and cash equivalents | 1,372.9 | 1,129.2 |
Non-current assets | 9,017.0 | 9,077.6 |
Of which investment property | 8,629.0 | 8,629.1 |
Current liabilities | 705.3 | 653.7 |
Non-current liabilities | 5,099.3 | 5,034.3 |
Of which loans, borrowings and bonds | 4,160.8 | 4,133.6 |
Total equity | 5,414.2 | 5,230.1 |
Net asset attributable to Perpetual notes investors | 1,212.4 | 1,236.7 |
Net asset attributable to NCI in GCP | 501.6 | 515.8 |
Revenue | 597.0 | 607.7 |
Net profit / (loss) | 242.1 | (638.1) |
Total OCI net of tax | 11.8 | (3.4) |
Total comprehensive income | 253.9 | (641.5) |
Cash flows from operating activities | 284.5 | 249.4 |
Cash flows from in investing activities | 52.0 | 147.8 |
Cash flows from (used) in financing activities | (93.4) | 405.3 |
Net change in cash and cash equivalents | 243.1 | 802.5 |
(*) comparative figures are adjusted to the GCP financial results published rather than to those containing the
255
Consolidated Financial Statements
|
SA
AROUNDTOWN
SHARE-BASED PAYMENT AGREEMENTS
20.1 Description of share-based payment arrangements
As at December 31, 2024, the Group has the following share-based payment arrangements:
Share incentive plan
The annual general meeting has approved to authorize the Board of Directors to
issue up to 8.5 million shares for an incentive plan for the Board of Directors, key
management and senior employees. The incentive plan has a vesting period of up to
4 years with specific milestones to enhance management’s long-term commitment to
Aroundtown’s strategic targets.
The key terms and conditions related to program are as follows:
| Number of shares |
Contractual life of |
|
| Grant date |
(in thousands) |
the incentive |
April 2021 – September 2028 |
4,771 |
Up to 4 years |
20.2 Reconciliation of outstanding share options
The number of shares under the share incentive program and replacement awards
were as follows:
2024 |
2023 |
|
Number of shares |
Number of shares |
|
in thousands |
||
Outstanding on January 1 |
3,636 |
2,552 |
Granted during the year, net |
1,471 |
2,620 |
Exercised during the year (*) |
(336) |
(1,536) |
Outstanding on December 31 |
4,771 |
3,636 |
(*) in accordance with the terms and conditions of the incentive share plan, 455 thousand shares (2023: 403
thousand) were delivered from the Group’s treasury shares to employees across the Group, and the rest
amounts were either settled in cash or withheld at source to reflect the tax impact
During the year, the total amount recognized as share-based payment was €5.2 million
(2023: €5.3 million). The amount was presented as administrative and other expenses
and property operating expenses in the consolidated statement of profit or loss and as
LOANS, BORROWINGS AND BONDS
21.1 Composition
As at December 31, |
||||
2024 |
2023 |
|||
Weighted average |
||||
interest rate (*) as at |
||||
December 31, 2024 |
Maturity |
in € millions |
||
Non-current |
||||
Bank loans |
2.8% |
2026-2082 |
2,134.1 |
2,124.2 |
Straight bonds |
1.9% |
2026-2039 |
10,629.0 |
11,698.0 |
Total non-current |
12,763.1 |
13,822.2 |
||
Current |
||||
Bank loans (**) |
2.8% |
2025 |
29.8 |
26.2 |
Loan redemptions (**) |
4.2% |
2025 |
280.7 |
53.7 |
Straight bonds |
0.9% |
2025 |
1,381.9 |
340.0 |
Total current |
1,692.4 |
419.9 |
||
(*) including hedging impact where applicable
(**) current maturities and accrued interest
21.2 Bank loans
In 2024, the Group raised from financial institutions a net amount of ca. €350 million.
The debt drawdowns had average maturities and margin of over the Euribor of 5
years and 1.7%, respectively. The Group repaid bank loans of ca. €50 million during
the year. Additional amount of €56.5 million is presented on December 31, 2024, as
liability associated with assets held for sale.
The bank loans get the underlying real estate assets as security (as at December 31,
2024 and 2023, €200 million are unsecured). As at December 31, 2024, ca. €7.4 billion
of the investment property is encumbered (2023: ca. €6.7 billion).
The Group as a sponsor is in compliance with its noncurrent obligations (including
loan covenants) to the financing banks under the existing loan agreements that
include, inter alia, ranges for minimum debt service coverage ratio (DSCR) of 105%-
220% and loan to value minimal ratio (LTV) of 50%-75%.
256
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21.3 Straight bonds
Set out below, is an overview of the Group’s straight bonds as at December 31, 2024, and December 31, 2023:
Note / | Nominal amount in | Nominal amount | Contractual | Carrying amount as at | Carrying amount as at | |||
Series | footnote | Currency | original currency | in euro | Coupon rate (p.a.) | maturity | December 31, | December 31, |
as at December 31, 2024 | % | 2024 | 2023 | |||||
in millions | in € millions | in € millions | ||||||
Non-current portion | ||||||||
Series H | (a) (b) (c) | USD | 400.0 | 372.4 | 1.365 | 03/2032 | 373.9 | 349.4 |
Series NOK | (a) (b) (c) | NOK | 750.0 | 79.3 | 0.818 | 07/2027 | 63.2 | 66.2 |
Series I | 21.3.1 | EUR | 178.9 | 178.9 | 1.88 | 01/2026 | 178.0 | 205.0 |
Series J | (b) (c) (l) | GBP | 483.5 | 578.8 | 1.48 | 10/2029 | 573.6 | 545.6 |
Series K | EUR | 266.3 | 266.3 | 1.00 | 01/2025 | - | 476.7 | |
Series L | (b) (c) (e) | USD | 150.0 | 125.2 | 4.846 | 02/2038 | 121.1 | 115.4 |
Series M | CHF | 239.8 | 214.4 | 0.73 | 01/2025 | - | 258.7 | |
Series N | 21.3.1 | EUR | 795.0 | 795.0 | 1.63 | 01/2028 | 786.2 | 788.4 |
Series O | EUR | 296.8 | 296.8 | 2.00 | 11/2026 | 295.4 | 294.5 | |
Series P | (c) (f), 21.3.1 | AUD | - | - | - | - | - | 118.6 |
Series R | CAD | 62.4 | 41.0 | 3.00 | 09/2025 | - | 116.8 | |
Series T | (h) | EUR | 150.0 | 150.0 | 3.00 | 09/2030 | 149.9 | 149.9 |
Series U | EUR | 75.0 | 75.0 | 2.97 | 09/2033 | 73.8 | 73.7 | |
Series V | EUR | 50.0 | 50.0 | 2.70 | 10/2028 | 49.8 | 49.7 | |
Series W | EUR | 76.0 | 76.0 | 3.25 | 11/2032 | 75.0 | 74.9 | |
Series X | (c) | CHF | 99.8 | 91.3 | 1.72 | 03/2026 | 106.0 | 107.6 |
Series 28 | (b) (c) (i), 21.3.1 | USD | 496.5 | 439.3 | 5.167 | 03/2029 | 438.9 | 453.2 |
Series 29 | (b) (c) (j) | NOK | 1,735.0 | 179.0 | 3.00 | 03/2029 | 125.7 | 132.2 |
Series 30 | (b) (c) (k), 21.3.1 | GBP | 387.7 | 454.1 | 3.00 | 04/2031 | 396.1 | 382.9 |
Series 31 | (c) | JPY | 7,000.0 | 61.3 | 1.42 | 05/2029 | 42.8 | 44.6 |
Series 32 | EUR | 518.2 | 518.2 | 0.63 | 07/2025 | - | 599.9 | |
Series 33 | EUR | 600.0 | 600.0 | 1.45 | 07/2028 | 594.8 | 593.4 | |
Series 34 | NOK | 500.0 | 45.9 | 1.055 | 07/2025 | - | 44.4 | |
Series 36 | 21.3.1 | EUR | 475.5 | 475.5 | 1.50 | 05/2026 | 478.0 | 528.3 |
Series 38 | EUR | 727.8 | 727.8 | 0.00 | 07/2026 | 723.1 | 720.1 | |
Series 39 | EUR | 1,027.9 | 1,027.9 | 0.375 | 04/2027 | 1,016.4 | 1,011.6 | |
Series 40 | (q) | EUR | 650.0 | 650.0 | 4.80 | 07/2029 | 632.3 | - |
GCP series E | EUR | 178.9 | 178.9 | 1.50 | 04/2025 | - | 198.0 | |
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Note / | Nominal amount in | Nominal amount | Contractual | Carrying amount as at | Carrying amount as at | ||||
Series | footnote | Currency | original currency | in euro | Coupon rate (p.a.) | maturity | December 31, | December 31, | |
as at December 31, 2024 | % | 2024 | 2023 | ||||||
in millions | in € millions | in € millions | |||||||
Non-current portion (continued) | |||||||||
GCP series G | 21.3.1 | EUR | 407.3 | 407.3 | 1.38 | 08/2026 | 414.9 | 594.0 | |
GCP series H | EUR | 255.0 | 255.0 | 2.00 | 10/2032 | 274.3 | 276.8 | ||
GCP series I | (b) (c) (m) | HKD | 900.0 | 92.6 | 4.15 | 02/2028 | 106.4 | 100.3 | |
GCP series J | 21.3.1 | EUR | 583.3 | 583.3 | 1.50 | 02/2027 | 596.1 | 690.4 | |
GCP series K | (c) | CHF | 125.0 | 132.8 | 0.96 | 09/2026 | 134.2 | 137.2 | |
GCP series L | (b) (c) | JPY | 7,500.0 | 75.5 | 1.20 | 06/2038 | 44.1 | 46.6 | |
GCP series M | (b) (n) | EUR | 47.0 | 47.0 | 2.18 | 07/2033 | 47.9 | 48.0 | |
GCP series N | (b) | EUR | 88.0 | 88.0 | 1.71 + Euribor (3M) | 02/2039 | 81.0 | 79.8 | |
GCP series O | (b) | EUR | 15.0 | 15.0 | 1.68 + Euribor (3M) | 02/2034 | 13.9 | 13.8 | |
GCP series P | (b) (c) (o) | HKD | 290.0 | 32.8 | 4.30 | 03/2029 | 33.7 | 32.1 | |
GCP series R | EUR | 40.0 | 40.0 | 2.50 | 06/2039 | 45.6 | 46.0 | ||
GCP series U | EUR | 80.0 | 80.0 | 0.75 | 07/2025 | - | 80.8 | ||
GCP series V | (b) (p) | EUR | 70.0 | 70.0 | 2.29 | 08/2034 | 68.4 | 69.6 | |
GCP series X | EUR | 1,000.0 | 1,000.0 | 0.13 | 01/2028 | 987.2 | 982.9 | ||
GCP series Y | (r) | EUR | 500.0 | 500.0 | 4.38 | 01/2030 | 487.3 | - | |
Total non-current portion | 10,629.0 | 11,698.0 | |||||||
Current portion | |||||||||
Series K | 21.3.1 | EUR | 266.3 | 266.3 | 1.00 | 01/2025 | 266.2 | - | |
Series M | (c) | CHF | 239.8 | 214.4 | 0.73 | 01/2025 | 254.7 | - | |
Series R | (b) (c) (g) 21.3.1 | CAD | 62.4 | 41.0 | 3.00 | 09/2025 | 41.7 | - | |
Series 32 | 21.3.1 | EUR | 518.2 | 518.2 | 0.63 | 07/2025 | 517.0 | - | |
Series 34 | (b) (c) | NOK | 500.0 | 45.9 | 1.055 | 07/2025 | 42.4 | - | |
GCP series E | 21.3.1 | EUR | 178.9 | 178.9 | 1.50 | 04/2025 | 179.6 | - | |
GCP series U | EUR | 80.0 | 80.0 | 0.75 | 07/2025 | 80.3 | - | ||
Series 27 | 21.3.1 | HKD | - | - | - | 03/2024 | - | 49.8 | |
GCP series Q | 21.3.1 | CHF | - | - | - | 06/2024 | - | 140.7 | |
GCP series W | 21.3.1 | EUR | - | - | - | 04/2024 | - | 149.5 | |
Total current portion | 1,381.9 | 340.0 | |||||||
Total accrued interest on straight bonds | (d) | 132.2 | 116.3 | ||||||
Total straight bonds and accrued interest | 12,143.1 | 12,154.3 | |||||||
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(a)
coupon and principal are linked to Consumer Price Index (CPI) through derivative instruments
(b)
effective coupon in euro
(c)
the Company / GCP hedged the currency risk of the principal amount until maturity
(d)
presented as part of the provisions for other liabilities and accrued expenses in the consolidated
statement of financial position
(e)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.75% p.a., semi-annually until Q1-2023, and 1.78%
p.a. plus Euribor (6M), semi-annually for the following years until maturity. The company fixed the
variable interest to 4.846% p.a. from April 2024 until February 2028
(f)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.605% p.a., semi-annually until Q2-2023, and 1.244%
p.a. plus Euribor (6M), semi-annually for the following years until maturity (and eventually early
repayment)
(g)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.7% p.a., semi-annually until Q3-2023, and 2.72% p.a.
plus Euribor (6M), semi-annually for the following years until maturity. The company fixed the
variable interest to 3.0% p.a. from March 2024 until maturity
(h)
the Company hedged the interest rate risk, the effective annual euro coupon is 2.0% until Q3-2023,
and a semi-annual coupon of 2.266% p.a. plus Euribor (6M) for the following years until maturity.
The company fixed the variable interest to 3.0% p.a. from March 2024 until September 2027
(i)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.75% p.a., semi-annually until Q1-2023, and 2.636%
p.a. plus Euribor (6M), semi-annually for the following years until maturity. The company fixed the
variable interest to 5.167% p.a. from March 2024 until March 2026
(j)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.75% p.a. until Q1-2023, and 2.52% p.a. plus Euribor
(6M), semi-annually for the following years until maturity. The company fixed the variable interest
to 3.0% p.a. from March 2024 until maturity
(k)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.75% p.a. until Q2-2023, and 2.11% p.a. plus Euribor
(6M), semi-annually for the following years until maturity. The company fixed the variable interest
to 3.0% p.a. from April 2024 until April 2028
(l)
the Company hedged the currency risk of the principal amount and coupon with a cross-currency
swap; the effective annual euro coupon is 1.48% p.a. from July 2024 until maturity
(m)
GCP hedged the currency risk of the principal amount and coupon with a cross-currency swap;
the effective annual euro coupon is 1.00% p.a. until Q1-2023, and 1.1725% p.a. plus Euribor (6M),
semi-annually for the following years until maturity. GCP fixed the variable interest to 4.147% p.a.
from April 2024 until maturity
(n)
GCP hedged the interest rate risk, the effective annual euro coupon is 1.7% until Q3-2023, and
a semi-annual coupon of 1.39% p.a. plus Euribor (6M) for the following years until maturity. GCP
fixed the variable interest to 2.18% p.a. from April 2024 until July 2028
(o)
GCP fixed the variable interest (1.38% + Euribor (3M)) to 4.301% p.a. from June 2024 until March
2028
(p)
GCP hedged the interest rate risk, the effective annual euro coupon is 1.5% until Q3-2024, and
a semi-annual coupon of 1.47% p.a. plus Euribor (6M) for the following years until maturity. GCP
fixed the variable interest to 2.29% p.a. until February 2028
(q)
In July 2024, the Company successfully completed the placement of €650 million nominal value
series 40 bonds for a net price of ca. 97.1% of its nominal value, maturing in July 2029 and carrying
a 4.8% annual coupon. The bonds were issued under the EMTN Programme
(r)
In July 2024, GCP successfully completed the placement of €500 million nominal value GCP series
Y bonds for a net price of ca. 97.2% of its nominal value, maturing in January 2030 and carrying a
4.375% annual coupon. The bonds were issued under the EMTN Programme of GCP
259
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21.3.1
Buyback and redemption of bonds
During 2023 and 2024, the Company and its subsidiaries bought back some of the Group’s
straight bonds through tenders as well as in the secondary market. The purpose of the
early repayments follows the utilization of the real estate disposal proceeds and is part of
the Group’s pro-active debt optimization strategy with the aim to extend the average debt
maturity and reduce the cost of debt. The bonds buybacks in 2024 were in an average
price of nearly 99% of the nominal value (2023: around 80% of the nominal value) and
resulted in recognizing a gain of €11.1 million that is presented as other financial results
in the consolidated statement of profit or loss (2023: gain of €243.6 million).
Set forth below are the amounts bought back and redeemed upon maturity during the
year 2024:
Straight bond | Contractual | Outstanding nominal value | |||
series | Currency | maturity | Nominal value bought back | as at December 31, 2024 | |
in millions | in millions | ||||
(original currency) | in € millions | (original currency) | |||
Series 27 | HKD | 03/2024 | 430.0 | 48.3 | Fully redeemed |
GCP Series W | EUR | 04/2024 | 148.8 | 148.8 | Fully redeemed |
GCP Series Q | CHF | 06/2024 | 130.0 | 119.4 | Fully redeemed |
Series K | EUR | 01/2025 | 212.6 | 212.6 | 266.3 |
GCP Series E | EUR | 04/2025 | 15.5 | 15.5 | 178.9 |
Series P | AUD | 05/2025 | 202.0 | 127.3 | Fully redeemed |
Series 32 | EUR | 07/2025 | 85.6 | 85.6 | 518.2 |
Series R | CAD | 09/2025 | 119.4 | 78.5 | 62.4 |
Series I | EUR | 01/2026 | 28.0 | 28.0 | 178.9 |
Series 36 | EUR | 05/2026 | 44.0 | 44.0 | 475.5 |
GCP Series G | EUR | 08/2026 | 170.1 | 170.1 | 407.3 |
GCP Series J | EUR | 02/2027 | 84.3 | 84.3 | 583.3 |
Series N | EUR | 01/2028 | 5.0 | 5.0 | 795.0 |
Series 28 | USD | 03/2029 | 44.3 | 39.2 | 496.5 |
Series 30 | GBP | 04/2031 | 1.0 | 1.2 | 387.7 |
Total nominal value bought back / | |||||
| redeemed | 1,207.8 | ||||
Set forth below are the amounts bought back and redeemed upon maturity during
the year 2023:
Straight bond/ | Outstanding nominal | ||||
schuldschein | Original | Nominal value bought back / | value as at December | ||
series | Currency | maturity | redeemed | 31, 2023 | |
in millions | in millions | ||||
(original currency) | in € millions | (original currency) | |||
Series S | EUR | 08/2023 | 100.0 | 100.0 | Fully redeemed |
GCP Series W | EUR | 04/2024 | 55.9 | 55.9 | 148.8 |
Series K | EUR | 01/2025 | 211.2 | 211.2 | 478.9 |
Series M | CHF | 01/2025 | 10.3 | 10.5 | 239.8 |
GCP Series E | EUR | 04/2025 | 11.2 | 11.2 | 194.4 |
Series P | AUD | 05/2025 | 48.0 | 29.3 | 202.0 |
Series 32 | EUR | 07/2025 | 180.2 | 180.2 | 603.8 |
Series R | CAD | 09/2025 | 68.2 | 46.8 | 181.8 |
Series I | EUR | 01/2026 | 44.1 | 44.1 | 206.9 |
Series X | CHF | 03/2026 | 0.2 | 0.2 | 99.8 |
Series 36 | EUR | 05/2026 | 80.5 | 80.5 | 519.5 |
Series 38 | EUR | 07/2026 | 272.2 | 272.2 | 727.8 |
GCP Series G | EUR | 08/2026 | 22.6 | 22.6 | 577.4 |
Series O | EUR | 11/2026 | 8.4 | 8.4 | 296.8 |
Series 39 | EUR | 04/2027 | 222.1 | 222.1 | 1,027.9 |
Series 28 | USD | 03/2029 | 59.2 | 53.3 | 540.8 |
Series J | GBP | 10/2029 | 16.5 | 19.3 | 483.5 |
Series 30 | GBP | 04/2031 | 11.3 | 13.3 | 388.7 |
Total nominal value bought back / | |||||
| redeemed | 1,381.1 | ||||
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21.4 Reconciliation of movement of liabilities to cash flow arising
from financing activities
The table below details changes in the Group’s liabilities from financing activities,
including both cash and non-cash changes. Liabilities arising from financing activities
are those for which cash flows, or future cash flows will be classified in the Group’s
consolidated statement of cash flows from financing activities.
Financing cash flows | Non-cash changes | ||||||||
Finance | Acquisition | Change in | |||||||
expenses paid | (disposal) of | Foreign exchange | liabilities | Other | Other | ||||
31.12.2023 | in cash (1) | Other cash flows | subsidiaries, net | effect | held for sale | non-cash (2) | changes (3) | 31.12.2024 | |
| in € millions | |||||||||
Straight bonds (4) | 12,154.3 | (197.5) | (76.1) | - | 61.4 | - | (13.1) | 214.1 | 12,143.1 |
Loans and borrowings (5) | 2,204.1 | (89.2) | 281.6 | 24.4 | - | (56.5) | (0.4) | 80.6 | 2,444.6 |
Lease liability | 311.8 | (12.5) | (1.8) | (73.8) | 1.2 | 3.9 | 4.9 | 14.3 | 248.0 |
Net derivative financial liabilities and | |||||||||
| others | 54.9 | - | 50.4 | - | 44.7 | - | (53.3) | - | 96.7 |
Total | 14,725.1 | (299.2) | 254.1 | (49.4) | 107.3 | (52.6) | (61.9) | 309.0 | 14,932.4 |
Financing cash flows | Non-cash changes | ||||||||
Finance | Acquisition | Change in | |||||||
expenses paid (1) | (disposal) of | Foreign exchange | liabilities | Other (2) | Other (3) | ||||
31.12.2022 | in cash | Other cash flows | subsidiaries, net | effect | held for sale | non-cash | changes | 31.12.2023 | |
in € millions | |||||||||
Straight bonds (4) | 13,531.1 | (203.1) | (1,128.6) | - | (20.7) | - | 4.1 | (28.5) | 12,154.3 |
Loans and borrowings (5) | 1,288.9 | (54.1) | 798.0 | 1.8 | - | 109.5 | (0.5) | 60.5 | 2,204.1 |
Lease liability | 248.0 | (10.8) | (1.7) | 51.3 | 1.5 | 5.3 | 5.6 | 12.6 | 311.8 |
Net derivative financial liabilities and | |||||||||
others | 192.0 | - | (249.0) | - | 121.3 | - | (9.4) | - | 54.9 |
Total | 15,260.0 | (268.0) | (581.3) | 53.1 | 102.1 | 114.8 | (0.2) | 44.6 | 14,725.1 |
(1)
excluding the finance income on deposits received in cash (€65.9 million in 2024 and €53.8 million in 2023)
(2) other non-cash changes include discount and issuance cost amortization for the bonds, unrealized revaluation gains and remeasurement of lease liabilities
(3) other changes include interest accruals and results on early repayment of debt and results on linked derivatives
(4) including accrued interest see note 21.3.
(5) including current portion of bank loans, loan redemptions and credit facility
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21.5 Covenants and negative pledge as defined in the bonds’ Terms
and Conditions
This note provides an overview of certain covenants of the Company under its series
of bonds (other than the perpetual notes, which do not contain financial covenants)
which are outstanding as at December 31, 2024. The complete terms and conditions
of each series of bonds are set forth in the relevant bond documentation. Capitalised
terms used in this note have the meanings set forth in the terms and conditions of the
relevant series of bonds.
Save for one of the Company’s outstanding series of bonds (Series 36), which contains
a similar provision, the Company undertakes that it will not, and will procure that
none of its Subsidiaries will, up to (and including) the Final Discharge Date, incur any
Indebtedness (other than any Refinancing Indebtedness) if, immediately after giving
effect to the incurrence of such additional Indebtedness and the application of the net
proceeds of such incurrence: the sum of:
(a)
(i) the Consolidated Indebtedness (less Cash and Cash Equivalents) as at the Last
Reporting Date; and (ii) the Net Indebtedness (less Cash and Cash Equivalents)
incurred since the Last Reporting Date would exceed 60 per cent. (depending
on the relevant series of bonds) of the sum of (without duplication): (i) the Total
Assets (less Cash and Cash Equivalents) as at the Last Reporting Date; and (ii)
the value of all assets acquired or contracted for acquisition by the Group as
determined at the relevant time in accordance with IFRS and the accounting
principles applied by the Company in the latest Financial Statements as certified
by the auditors of the Company since the Last Reporting Date (or, as the case
may be, the purchase price of any Real Estate Property acquired or contracted for
acquisition by the Group since the Last Reporting Date); and (iii) the proceeds of
any Indebtedness incurred since the Last Reporting Date (but only to the extent
that such proceeds were not used to acquire Real Estate Property or to reduce
Indebtedness); and
(b)
(i) the Consolidated Secured Indebtedness (excluding the GCP Series E Bonds, as
the case may be, and in each case less Cash and Cash Equivalents) as at the Last
Reporting Date; and (ii) the Net Secured Indebtedness (excluding the GCP Series
E Bonds, as the case may be, and in each case less Cash and Cash Equivalents)
incurred since the Last Reporting Date shall not exceed 45 per cent. of the sum
of (without duplication): (i) the Total Assets (less Cash and Cash Equivalents) as
at the Last Reporting Date; (ii) the value of all assets acquired or contracted for
acquisition by the Group as determined at the relevant time in accordance with
IFRS and the accounting principles applied by the Company in the latest Financial
Statements as certified by the auditors of the Company since the Last Reporting
Date (or, as the case may be, the purchase price of any Real Estate Property
acquired or contracted for acquisition by the Group since the Last Reporting Date);
and (iii) the proceeds of any Indebtedness incurred since the Last Reporting Date
(but only to the extent that such proceeds were not used to acquire Real Estate
Property or to reduce Indebtedness).
In most of the Company’s outstanding series of bonds (excluding Series 36), the
Company undertakes that the sum of: (i) the Unencumbered Assets (less Cash and
Cash Equivalents) as at the Last Reporting Date; and (ii) the Net Unencumbered Assets
(less Cash and Cash Equivalents) newly recorded since the Last Reporting Date will at
no time be less than 125 per cent. of the sum of: (i) the Unsecured Indebtedness (less
Cash and Cash Equivalents) at the Last Reporting Date; and (ii) the Net Unsecured
Indebtedness (less Cash and Cash Equivalents) incurred since the Last Reporting Date.
The Company undertakes that, on each Reporting Date, the Interest Coverage Ratio will
be at least 1.8 (excluding one series of standalone bonds, for which the Consolidated
Coverage Ratio will be at least 2.0).
Save for two of the Company’s series of bonds, which contains similar provisions, the
Company’s outstanding series of bonds contain a customary negative pledge clause
that prohibits the Company, so long as any of the Senior Notes remain outstanding,
from creating or having outstanding any Security Interest (other than a Permitted
Security Interest) upon any of its present or future business, undertaking, assets or
revenues (including any uncalled capital) to secure any Capital Markets Indebtedness,
unless the Company promptly takes any and all action necessary to ensure that:
(i)
all amounts payable by it under the Senior Notes and the Trust Deed are secured
by the Security Interest equally and rateably with the Capital Markets Indebtedness
to the satisfaction of the Trustee; or
(ii)
such other Security Interest or other arrangement is provided either (i) as the Trustee
in its absolute discretion deems not materially less beneficial to the interests of
the Senior Noteholders or (ii) as is approved by an Extraordinary Resolution of the
Senior Noteholders.
The exposure of the Company to interest rate risk in relation to financial instruments is
reported in note 25.3.1.1 to the financial statements. There have been no breaches in
covenants during the year and up to the date of approval of these consolidated financial
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LONG TERM FINANCIAL LIABILITIES AND OTHER
PAYABLES
As at December 31, | ||
2024 | 2023 | |
in € millions | ||
Tenancy deposits | 75.3 | 73.4 |
Lease liability (see note 22.1) | 248.0 | 311.8 |
Non-current payables | 220.6 | 249.9 |
Total | 543.9 | 635.1 |
22.1 Lease liability
Set out below are the carrying amounts of lease liabilities of the Group and the
movements during the year:
As at December 31, | ||
2024 | 2023 | |
in € millions | ||
As at January 1 | 311.8 | 248.0 |
Additions (disposals), net | (66.7) | 54.2 |
Interest expenses | 13.3 | 16.8 |
Payments (*) | (14.3) | (12.5) |
Transferred to liabilities held for sale | 3.9 | 5.3 |
Balance at December 31 | 248.0 | 311.8 |
(*) the cash payments for interest portion are presented under “Interest and other financial expenses paid, net”
and the cash payments for principal portion under “Amortizations of loans from financial institutions and
Hannover
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RELATED PARTY TRANSACTIONS
Related parties are companies or individuals which have the ability to control or
exercise significant influence over the Group entities, or which the Group entities
control or exercises significant influence over. Related persons are the members of the
Board of Directors and the Chief Officers of the Company.
Related party transactions (as defined in IAS 24 Related Party Disclosures) performed
by / with the Company and its affiliated undertakings and key management personnel
are set out below, as well as the identity and nature of the related party and transaction.
The remuneration for the member of the Board of Directors and for the Chief Officers
refers to the relevant person or to a company under their control.
The Company has aligned the Board of Directors’ and Chief Officers’s remuneration
package (consisting of base salary, consultancy fees and allowances, as well as short-term
bonus and long-term incentive remuneration) with the provisions of the Remuneration
Policy of the Company. According to the Remuneration Policy, the variable remuneration,
in particular, (consisting of short-term remuneration and long-term remuneration) is tied
to the achievement of certain pre-defined performance measures.
Chief Officers
Mr. Barak Bar-Hen, the Company’s Chief Executive Officer (Co-CEO) and Chief Operating
Officer, was entitled to a total remuneration of €1,540 thousand, of which €796 thousand
refers to fixed salary, consultancy fees and supplementary payments, €150 thousand to
short-term remuneration, and €594 thousand to long-term remuneration.
Mr. Eyal Ben David, the Company’s Chief Financial Officer, was entitled to a total remuneration
of €1,540 thousand, of which €817 thousand refers to fixed salary, consultancy fees and
supplementary payments, €150 thousand was in short-term remuneration, and €573
thousand to long-term remuneration.
Ms. Limor Bermann, the Company’s Chief Sustainability Officer, appointed in May 2024, was
entitled to a total remuneration of €297 thousand, of which €254 thousand refers to fixed
salary, consultancy fees and supplementary payments, and €42 thousand was in the form of
long-term remuneration.
Mr. Oschrie Massatschi, the Company’s former Chief Capital Markets Officer (stepping down
in December 2024), was entitled to a fixed salary, consultancy fees and supplementary
payments of €353 thousand. Mr. Massatschi waived his entitlement for any accumulated
short- and long-term remuneration from the Company and instead will receive a final
compensation in the amount of €450 thousand which will be paid in 3 yearly installments.
Balances with Executive Directors and Chief Officers
As at 31 December 2024, the Company had outstanding loans in the amount of €7.1 million
to Executive Directors and Chief Officers. The loans are payable from 2025 and until 2029
and bear annual accrued interest rate of up to 3% plus Euribor.
Year ended December 31, 2024 |
||||||||
Non-executive |
||||||||
Executive directors |
director |
Independent directors |
||||||
in € thousands |
||||||||
Fixed remuneration |
Mr. Frank |
Ms. Jelena |
Mr. Ran |
Mr. Markus |
Ms. Simone |
Mr. Markus |
||
Roseen (3) |
Afxentiou |
Laufer (3) |
Leininger (4) |
Runge-Brandner (4) |
Kreuter |
Mr. Daniel Malkin |
Total |
|
Salary, consultancy fees and supplementary payments (1) |
280 |
330 |
145 |
175 |
187 |
125 |
137 |
1,379 |
Variable incentive remuneration |
||||||||
Short-term remuneration |
80 |
50 |
- |
- |
- |
- |
- |
130 |
Long-term remuneration (2) |
322 |
145 |
- |
- |
- |
- |
- |
467 |
Total Remuneration |
682 |
525 |
145 |
175 |
187 |
125 |
137 |
1,976 |
(1)
based on employer’s costs, excluding VAT
(2)
multi-year fixed and variable share incentive program
(3)
also includes the remuneration for the position as a director in TLG
(4)
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23.2 Other related party transactions
The transactions and balances with related parties are as follows:
Year ended December 31, | ||
2024 | 2023 | |
in € millions | ||
Revenue from rental income and services rendered | 2.7 | 1.0 |
Interest income on loans to associates and joint | ||
ventures | 18.8 | 22.1 |
The purchased services in the consolidated statement of profit or loss for 2024 include
an amount of ca. €0.2 million (for 2023: €0.75 million) for facility management services
(caretaker etc.) between the Group and a facility management service company
(“FMSC”). Until March 2024, the registered shareholder of the FMSC was a related
party of the Group, who in the Group’s opinion, did not exercise any control over FMSC.
During the year, the Group acquired an asset-backed loan from an associate for €53.0
million. The loan was secured by a property, which the Group subsequently took over.
As at December 31, | ||
2024 | 2023 | |
in € millions | ||
Loans to associates and joint ventures (*) | 268.5 | 316.1 |
(*)
the loans given to associates carry interest rate in the range between 4% and 15% p.a. (2023: range
between 4% and 15% p.a.), measured at amortized cost and presented as part of the investment in equity-
TRADE AND OTHER PAYABLES
As at December 31, | ||
2024 | 2023 | |
in € millions | ||
Trade and other payables | 147.1 | 176.2 |
Prepayments received from tenants on operating costs | 413.8 | 407.6 |
Deferred income | 70.1 | 59.9 |
Other current liabilities | 58.4 | 27.8 |
Total | 689.4 | 671.5 |
Amsterdam
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FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Set out below, is an overview of financial assets, held by the Group as at December 31,
2024, and December 31, 2023:
As at December 31, |
|||
2024 |
2023 |
||
Note / |
|||
| footnote |
in € millions |
||
Financial assets at amortized cost: |
|||
Trade and other receivables |
(1) |
1,042.4 |
1,009.6 |
Cash and cash equivalents |
(1) |
3,129.6 |
2,641.3 |
Short-term deposits |
81.2 |
127.1 |
|
Loans to associates and joint ventures |
23.2 |
268.5 |
316.1 |
Long term financial investments and other assets |
(1) |
1,164.5 |
1,458.1 |
Financial assets at fair value through profit or loss: |
|||
Financial assets at fair value through profit or loss |
(2) |
431.3 |
257.7 |
Derivative financial assets |
(3), 25.4.1 |
242.7 |
259.9 |
Total financial assets |
6,360.2 |
6,069.8 |
|
(1)
(2)
(3)
Including amounts presented in assets held for sale
Those financial assets consist of bonds, shares, alternative investments and other tradable debt securities
Excluding derivative financial assets designated as hedging instruments in hedge relationships in the
amount of €59.6 million (2023: €126.2 million).
25.2 Financial liabilities
Set out below, is an overview of financial liabilities, held by the Group as at December
31, 2024, and as at December 31, 2023:
As at December 31, |
|||
2024 |
2023 |
||
Note / |
|||
| footnote |
in € millions |
||
Financial liabilities at amortized cost: |
|||
Trade and other payables |
(1) |
694.2 |
672.3 |
Tax payable |
(1) |
98.3 |
72.5 |
Loans and borrowings |
(2) |
2,501.1 |
2,204.1 |
Bonds and schuldscheins |
12,010.9 |
12,038.0 |
|
Accrued interest on bonds and schuldscheins |
132.2 |
116.3 |
|
Long term financial liabilities and other payables |
(1) |
551.4 |
640.1 |
Financial liabilities at fair value through profit or loss: |
|||
Derivative financial liabilities |
(3), 25.4.1 |
170.1 |
193.2 |
Total financial liabilities |
16,158.2 |
15,936.5 |
|
(1)
Including amount presented in liabilities associated with assets held for sale
(2)
Including liabilities associated with assets held for sale, loan redemptions and accrued interest
(3)
Excluding derivative financial liabilities designated as hedging instruments in hedge relationships in the
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25.3 Risks management objectives and polices
The Group’s principal financial liabilities, other than derivatives, comprise loans and
borrowings, convertible, straight bonds and schuldscheins, trade and other payable,
tax payable and non-current liabilities. The Group’s principal financial assets include
trade and other receivables, cash and cash equivalent and other non-current assets.
The Group also holds investments in debt and equity instruments and enters into
derivative transactions.
The Group is exposed to market risk, credit risk and liquidity risk. The Board of Directors
has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The Board of Directors is supported by a risk committee that
advises on financial risks and the appropriate financial risk governance framework
for the Group. The Group’s risk management policies are established to identify and
analyze the risks faced by the Group, to set appropriate risk limits and controls, and
monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and in the Group’s activities.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices. Market risk comprises three types
of risk: interest rate risk, currency risk and other price risk, such as equity price risk.
25.3.1.1
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates
primarily to the Group’s long-term debt obligations with floating interest
rates (mainly to EURIBOR rates). The Group manages its interest rate risk
by hedging long-term debt with floating rate using swap, collar and cap
contracts.
As at December 31, 2024, after considering the effect of the hedging, the
interest profile of the Group’s interest-bearing debt was as follows:
As at December 31, |
||
2024 |
2023 |
|
in € millions |
||
Fixed rate |
13,810.7 |
10,980.4 |
Capped rate |
287.3 |
1,055.8 |
Floating rate |
357.5 |
2,205.9 |
Total |
14,455.5 |
14,242.1 |
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible
change in interest rates on that portion of long-term debt affected, after the
impact of hedging. With all other variables held constant, the Group’s profit
before tax and pre-tax equity are affected through the impact on floating
rate long-term debt, as follows:
| As at December 31, |
Increase / decrease in |
Effect on profit before tax |
basis points |
and pre-tax equity |
|
| in € millions |
||
2024 |
+100 |
(2.5) |
-100 |
3.3 |
|
2023 |
+100 |
(26.1) |
-100 |
29.0 |
|
The Group had no long-term debt for which the benchmark rate had been
replaced with an alternative benchmark rate as at December 31, 2024 and
2023.
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The Group’s exposure to the risk of changes in foreign exchange rates
relates primarily to the Group’s net investment in foreign subsidiaries and
to several straight bonds issued in a foreign currency.
The Company used cross-currency swap and forward contracts to hedge
the fair value and cash flow risk derived from the changes in exchange
rates and interest rates as explained in note 25.4.2.1 and 25.4.2.2.
Due to the hedging above there is no material residual foreign currency risk.
In addition, the Company used forward contracts to hedge the currency
risk of its net investment in foreign operation which is denominated in
25.3.1.3. Equity price risk
The Group’s listed and non-listed equity investments are susceptible to market
price risk arising from uncertainties about future values of the investment
securities. The Group manages the equity risk through diversification and
by placing limits on individual and total equity instruments. Reports on
the equity portfolio are submitted to the Group’s senior management on a
Credit risk is the risk that a counterparty will not meet its obligations under
a financial instrument or customer contract, leading to a financial loss. The
Group is exposed to credit risk from its operating activities (primarily trade
and other receivables, loans as a seller and loans connected with future real-
estate transactions) and from its financing activities, including cash and cash
equivalents held in banks, derivatives and other financial instruments. The
Group’s maximum credit risk is represented by the financial assets’ carrying
amount (see note 25.1).
Trade and other receivables
Customer credit risk is managed by the property managers subject to the
Group’s established policy and control procedures relating to customer credit
risk management. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date using a provision
to measure expected credit loss. The calculation reflects the probability-
weighted outcome, the time value of money and reasonable and supportable
information that is available at the reporting date about past events, current
conditions and forecasts of future economic conditions. The assessment of
the correlation between historical observed default rates, forecast economic
conditions and ECLs is a significant estimate. The amount of ECLs is sensitive
to changes in circumstances and of forecast economic conditions. The Group’s
historical credit loss experience and forecast of economic condition may also
not be representative of customer’s actual default in the future.
The Group has no significant concentration of credit risk.
The aging of rent receivables at the end of the year that were not impaired
was as follows:
As at December 31, | ||
2024 | 2023 | |
in € million | ||
Not past due and past due 1–30 days | 35.6 | 46.2 |
Past due 31–90 days | 11.7 | 28.3 |
Past due above 90 days | 11.9 | 11.6 |
Total | 59.2 | 86.1 |
Management believes that the unimpaired amounts that are past due by
more than 30 days are still collectible in full, based on the historical payment
behavior and extensive analysis of customer credit risk, including underlying
customers’ credit ratings if they are available.
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Credit risk from balances with banks and financial institutions is managed
by the Group’s treasury department in accordance with the Group’s policy.
Investments of surplus funds are made only with approved counterparties
and within credit limits assigned to each counterparty. The limits are set
to minimize the concentration of risks and therefore mitigate financial loss
through a counterparty’s potential failure to make payments.
The Group’s investment in equity and debt instruments at fair value through profit
or loss consists of quoted securities that are graded in the investment category.
The Group holds its cash and cash equivalents and its derivative instruments
with highly rated (mostly between A- to A+ by the leading global rating
agencies) banks and financial institutions located mainly in Switzerland,
Germany, Luxembourg and the Netherlands. Concentration risk is mitigated by
not limiting the exposure to a single counter party. The Company has performed
an expected credit loss (“ECL”) calculation on the cash and cash equivalents
accounts and presented the current balance net of the ECL provision that
amounted to €3.4 million as at December 31, 2024 (2023: €3.3 million).
The composition of cash and cash equivalents was as follows:
As at December 31, | ||
2024 | 2023 | |
in € million | ||
Cash at banks | 1,490.0 | 1,186.7 |
Cash deposits of up to three months | 1,638.4 | 1,454.5 |
Total cash and cash equivalents | 3,128.4 | 2,641.2 |
None of the cash and cash equivalents items are restricted. Most of the cash at
Credit line
The Group ensures accessible additional liquidity by maintaining active revolving
credit facilities (“RCF”) from various well established financial institutions. As at
December 31, 2024, the Group had ca. €1.1 billion (2023: €1.0 billion) RCF with
average maturity of three years, all undrawn.
The main terms and conditions including covenants, pledge and negative
pledge of the RCF are similar to those of the bonds’ detailed in note 21.5, with
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Liquidity risk is the risk that arises when the maturity of assets and liabilities
does not match. An unmatched position potentially enhances profitability but
can also increase the risk of loss. The Group has procedures with the objective
of minimizing such losses such as maintaining sufficient cash and other highly
liquid current assets and by having available an adequate amount of available
committed credit facilities as described above in the credit line section.
The following are the remaining contractual maturities of financial liabilities,
including estimated interest payments, the impact of derivatives and excluding
the impact of netting agreements as at December 31, 2024, and as at December
31, 2023:
As at December 31, 2024
Contractual cash flows including interest | |||||||
Carrying amount | Total | 2 months or less | 2-12 months | 1-2 years | 2-3 years | More than 3 years | |
in € millions | |||||||
Non-derivative financial liabilities | |||||||
Loans and borrowings (*) | 2,444.6 | 2,852.2 | 5.4 | 366.5 | 197.0 | 433.4 | 1,849.9 |
Straight bonds (**) | 12,143.1 | 13,303.4 | 546.8 | 1,011.7 | 2,516.4 | 1,872.4 | 7,356.1 |
Lease liability | 248.0 | 3,234.8 | 1.7 | 11.9 | 13.8 | 13.8 | 3,193.6 |
Trade and other payables | 147.1 | 147.1 | 24.5 | 122.6 | - | - | - |
Total | 14,982.8 | 19,537.5 | 578.4 | 1,512.7 | 2,727.2 | 2,319.6 | 12,399.6 |
(*)
includes loan redemptions and accrued interest
(**) includes accrued interest
As at December 31, 2023
Contractual cash flows including interest | |||||||
Carrying amount | Total | 2 months or less | 2-12 months | 1-2 years | 2-3 years | More than 3 years | |
in € millions | |||||||
Non-derivative financial liabilities | |||||||
Loans and borrowings (*) | 2,204.1 | 2,664.8 | 3.9 | 148.2 | 256.6 | 203.4 | 2,052.7 |
Straight bonds and schuldscheins (**) | 12,154.3 | 13,422.9 | 44.0 | 495.2 | 2,080.1 | 2,738.4 | 8,065.2 |
Lease liability | 311.8 | 3,330.3 | 2.4 | 11.9 | 14.5 | 14.6 | 3,286.9 |
Trade and other payables | 176.2 | 176.2 | 29.4 | 146.8 | - | - | - |
Total | 14,846.4 | 19,594.2 | 79.7 | 802.1 | 2,351.2 | 2,956.4 | 13,404.8 |
(*)
includes loan redemptions and accrued interest
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25.3.4. Operating risk
Operational risk is the risk that derives from the deficiencies relating to the
Group’s information technology and control systems as well as the risk of human
error and natural disasters.
The Group’s systems are evaluated, maintained and
upgraded continuously.
25.3.5. Other risks
The general economic environment prevailing internationally may affect the
Group’s operations to a great extent. Economic conditions such as inflation,
unemployment, and development of the gross domestic product are directly
linked to the economic course of every country and any variation in these and
the economic environment in general may create chain reactions in all areas,
hence affecting the Group.
The Group’s portfolio is located in major cities and strong markets throughout
Germany, The Netherlands, United Kingdom and others. The current regional
distribution structure enables the Group on one hand to benefit of economic
scale, and on the other provides a diverse, well allocated and risk-averse
portfolio.
Geopolitical situation involving Russia and Ukraine
On February 24, 2022, Russia initiated a full-scale invasion of Ukraine and escalating
the “Russo-Ukrainian War” (“the War”) and hostilities have continued since then. The
War has received widespread international condemnation and in reaction to Russian
hostilities many nations and organizations, including Germany and the European
Union, have announced sanctions against Russia, Russian companies, and individuals
in and from Russia. The Group is not directly impacted by the War, as neither its
portfolio nor its operations have direct exposure to Ukraine or Russia. However, the
group is impacted by the indirect consequences of the War. As a result of the War,
inflationary pressures have increased, specifically heating and energy costs, which
have an impact on the operating costs of the group. Such pressures may also have
an impact on the ability of the Group’s tenants to pay rent and/or for the group to
recover expenses related to recoverable expenses from tenants. Furthermore, the
increased energy costs have led to a wider inflationary pressure. Higher levels of
inflation have impacted interest rates and borrowing costs, while increased volatility
in the capital markets have reduced the Group’s ability to raise capital at attractive
prices, resulting in an increase in its cost of capital and potentially limiting its
growth opportunities. While much of the volatility has reduced and price levels have
reduced in recent periods, risk of renewed price volatility remains, which could have
negative financial impacts on the Group.
As a result of the large number of refugees that have entered the European Union
and Germany following the War. This has resulted in an increased strain on the
residential real estate market in Germany. This further exacerbates the supply and
demand mismatch, increase political pressure for home construction or market
intervention. The full effects are currently still unclear and will depend significantly
on the duration and final outcome of the invasion as well as the distribution of
refugees across the European Union.
While the War is currently limited to Ukraine on one side and Russia and several
of its allies on the other, continued escalation may result in other countries joining
the conflict and at this stage the Group is unable to assess the full impact of such a
scenario on its operations, and the likelihood of its occurrence.
Lingering and/or renewed inflationary risk
In recent years, several consecutive events, such as the COVID-19 pandemic, supply
chain disruptions, the high amount of cash injected into the market as a monetary
response and the geopolitical situation around Russia and Ukraine, among others, have
resulted in a high inflationary environment. Inflationary pressure has been particularly
strong in energy prices, for oil and gas, caused by the War, and material prices. While in
pressures have eased risks remain that may result in inflationary pressures increasing
once more. This may also result in tenant’s inability to bear the costs that are passed
through to them as part of the lease agreements. It cannot be ruled out that losses of
rent will occur in the future or that the Group will be unable to collect operating costs
from tenants and that the Group will lose considerable rental income. To mitigate the
risk, the Company continues to provide information to its tenants to support them in
reducing their consumption of energy.
Higher levels of inflation particularly for energy and materials may have an impact on
the Group’s ability to acquire materials for capex measures at a reasonable price and
increase utility costs or result in delays across the Group’s operations. Furthermore,
higher levels of inflation across the economy may result in higher personnel expenses
and expenses related to external services, which could have a negative impact on the
Group’s profitability. In addition, higher levels of inflation have resulted in rapid and
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significant increases in interest rates and consequently resulted in significant volatility
in capital markets, which has a negative impact on the cost and availability of new
financing for the Group on one hand and have put upward pressure on discount rates
and cap rates. While in recent periods the momentum has shifted, renewed interest
rate pressures, if prolonged, could consequently have a further adverse impact on the
fair value of the Group’s assets and share price performance.
Uncertain interest rate environment
In order to battle the increased inflation levels, the European Central Bank (ECB) has
raised interest rate levels rapidly and has declared that it would maintain high interest
levels at least until inflation slows down and it reached the desired level. This has led
to a significant rise in interest rates in Germany and throughout the Eurozone and led
to a decrease in real estate valuations and investments, resulting in lower transaction
level and lower demand for real estate, among other effects. Starting mid-2024 the
ECB started easing rates, and as a result pressures have eased. However, rates remain
above the level seen in recent years and a renewed increase in interest rates could
adversely impact the Group’s business in a number of ways, including:
The discount and cap rates used to calculate the value of the Group’s investment
property recorded on the Company’s balance sheet in accordance with IAS 40 tends
to increase in an environment of rising interest rates, which in turn could result in the
Group’s properties having a lower fair value.
Although the Group’s current debt structure primarily involves debt at fixed interest
rates or, where variable interest rates apply, is predominantly subject to interest rate
hedging agreements, the increase in interest rates may have a negative impact on the
Group’s ability to refinance existing debt or incur additional debt on favorable terms.
Financial institutions such as banks may seek to reduce their exposure to the real
estate sector and might be subject to increased equity requirements and balance sheet
regulations resulting in restraints to lend out money to customers which could make it
more difficult for the Group to obtain bank financing at desired terms. In general, rising
interest rates (or market expectations regarding future increases in interest rates)
would make financing required by the Group for its refinancing, acquisition, capital
expenditure and/or other real estate activities more expensive, which could reduce
the Group’s profits.
When negotiating financing agreements or extending such agreements, the Group
depends on its ability to agree to terms and conditions that will provide for interest
payments that will not impair its profit targets, and for amortization schedules that
do not restrict its ability to pay intended dividends. Further, the Group may be unable
to enter hedging instruments transactions that may become necessary if variable
interest rates are agreed upon or may only be able to do so at significant costs. If the
current environment in which high rates prevail will remain for a prolonged period,
the Group’s financing costs, including costs for hedging instruments, may increase,
which would likely reduce the Group’s profits.
The Group’s total equity includes a material number of perpetual notes. Such notes
include in their terms a reset of their respective interest rates every five years (reset
date), starting from the first call date, based on a specified margin plus a 5-year swap
rate (reset rate). If a reset date falls in a period of high interest rates, it is likely that
such notes will carry a materially higher interest going forward, thereby reducing the
profits available to shareholders. Furthermore, the Company generally aims to replace
its perpetual notes issues on their first voluntary call date by a new issue. In times of
elevated interest rates, the rates that the Company would pay on a new issuance may
differ materially from the reset rate, it may therefore be uneconomical for the Company
to call the respective notes and issue new notes, as has been the case in the past.
The willingness of purchasers to acquire real estate in an environment of rising
interest rates may be negatively affected, thereby restricting the Group’s ability to
dispose of its properties on favorable terms when desired. Most purchasers finance
their acquisitions with lender provided financing through mortgages and comparable
security (in Germany so-called land charges). Lack of availability of such financing at
attractive rates therefore reduces demand for properties. Any of the foregoing factors
may have a material adverse effect on the Group’s business, net assets, financial
condition, cash flows and results of operations.
Climate-related risks
The significant impact of human activity on ecosystems and the climate have become
apparent in recent years. As a result, the Company does not only face changing physical
climate risks but also transitional climate risks resulting from changes in investor and
consumer demand, from regulatory changes as well as from other societal factors. The
Company faces several physical climate-related risks. The Company actively attempts
to identify these risks and implement measures to mitigate the impact of such risks
to the Company, for example through insurance. To better understand the Company’s
exposure to physical risks, the Company has adopted a tool for asset-level assessment
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of physical risk develop. This analysis will serve the Company in determining which
risks are material to develop adaptation solutions. Furthermore, increased occurrence
of severe weather events will likely result in higher insurance premiums.
In addition to physical climate-related risks, the Company also faces transitional risks.
As a result of the more apparent impact of climate changes in recent years regulators
have increased their efforts to mitigate current as well as potential future impacts
of climate change through a wide range of emerging regulations in the Group’s
regions pursuing a phase-out of fossil fuels and improved energy efficiency present
technological risks to the company which requires careful attention when planning
maintenance and capex measures. At the EU level, the EU Council and EU Parliament
reached an agreement in December 2023 on the recast of the Energy Performance of
Buildings Directive (EPBD) to include new minimum energy performance requirements
for buildings that progressively increase over time, although the specific requirements
can only be known once national-level implementation commences among member
states who will define their own target pathways. Noncompliance with the energy
requirements under the new EPBD would result in an inability to let the assets
and requires increased capital expenditures to become compliant. The Company
continuously monitors changes in regulations and aims to minimize the financial risk
through pro-active carbon reduction and energy efficiency policies and programs.
Furthermore, the Group’s sustainability strategy incorporates self-set targets for
material environmental, social and corporate governance matters (ESG). If any of these
self-set ESG goals are not met, this could damage the Group’s reputation. Considering
the increasing focus of market participants and lenders on sustainability and “green
financing”, this could have a negative impact on the Group’s refinancing and access
to further financing, for example, via the capital market or by taking out loans, at all
or on attractive terms. If the Group fails to meet expectations and trends related to
sustainability aspects in a timely manner or at all, there could be a decline in demand
from tenants.
Furthermore, this could also lead to investors divesting from the Group’s bonds or
shares, as they also expect ESG goals to be met. From a regulatory perspective, failure
to achieve the sustainability goals may also have a negative impact on the Group. To
take on a proactive approach, the Company has developed a CO2 pathway to guide the
investment in on-site renewable energy and building energy efficiency improvements
needed to achieve it’s 2030 emission reduction target while enabling further emission
reductions down the line. In order mitigate risks related to CO2 emissions, and to
reach the Company’s environmental targets, the Group is developing an investment
program, which covers a wide variety of activities involving both energy efficiency
improvements and renewable energy projects. The size and scope of the investment
program depends on the availability of governmental subsidies and grants, as is also
subject to increasing cost of material. Furthermore, potential new requirements set by
the regulators or set as a market standard, could increase the amount the Company
would need to invest and potentially accelerate the execution time of the investment
program. In 2022, the company began the process of aligning to the Task Force on
Climate-Related Financial Disclosures (TCFD) Recommendations framework. Although
the TCFD has been disbanded and integrated into the International Sustainability
Standards Board (ISSB), the framework’s core principles for corporate climate-related
risk disclosures have also been adopted by the European Sustainability Reporting
Standards (ESRS) E1 Standard. The early decision to align to best practices on
climate-related risk disclosures leaves the Company in a good position for ensuring
compliance, although it is a process requiring continuous effort. As part of this process,
the Company continuously updates its climate-related risk assessment each year.
The Building Resilience Task Force, an interdepartmental team dedicated to this effort,
continues to further develop control mechanisms and risk mitigation measures for
climate-related risks.
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25.4 Hedging activities and derivatives
25.4.1. Derivative financial instruments
As at December 31, | |||
2024 | 2023 | ||
Note | in € millions | ||
Derivative financial assets | |||
Derivatives that are designated as hedging | |||
| instruments in cash flow hedge | 25.4.2.1 | 40.8 | 22.6 |
Derivatives that are designated as hedging | |||
| instruments in fair value hedge | 25.4.2.2 | 18.8 | 103.2 |
Derivatives that are designated as hedging | |||
| instruments in net investment hedge | 25.4.2.3 | - | 0.4 |
Derivatives that are not designated as hedge | |||
| accounting relationships | 25.4.3 | 41.7 | 60.9 |
Other derivative financial instruments | 25.4.4 | 201.0 | 199.0 |
Total | 302.3 | 386.1 | |
Derivative financial liabilities | |||
Derivatives that are designated as hedging | |||
| instruments in cash flow hedge | 25.4.2.1 | 101.0 | 21.3 |
Derivatives that are designated as hedging | |||
| instruments in fair value hedge | 25.4.2.2 | 57.5 | 189.2 |
Derivatives that are designated as hedging | |||
| instruments in net investment hedge | 25.4.2.3 | 70.4 | 37.3 |
Derivatives that are not designated as hedge | |||
| accounting relationships | 25.4.3 | 40.1 | 78.3 |
Other derivative financial instruments | 25.4.4 | 130.0 | 114.9 |
Total | 399.0 | 441.0 | |
25.4.2. Hedge accounting relationships
25.4.2.1. Cash flow hedges
As at December 31, 2024, the Company had foreign exchange rate and interest
rate swap derivative agreements in place, designated as hedging instruments in
cash flow hedges, as follows:
Company | ||||
receives | ||||
(in notional | Company | |||
Hedging | currency | pays – in € | ||
Hedged item | instrument | Notional currency | millions) | millions |
Bond series H | Cross Currency | United States Dollar | 400.0 | 372.4 |
Swap | ||||
Bond series NOK | Cross Currency | Norwegian Krone | 750.0 | 79.3 |
Swap | ||||
Bond series J | Cross Currency | British Pound | 483.5 | 578.8 |
Swap | ||||
Bond series L | Cross Currency | United States Dollar | 150.0 | 125.2 |
Swap | ||||
Bond series R | Cross Currency | Canadian Dollar | 62.4 | 41.0 |
Swap | ||||
Bond series 28 | Cross Currency | United States Dollar | 496.5 | 493.3 |
Swap | ||||
Bond series 29 | Cross Currency | Norwegian Krone | 1,735.0 | 179.0 |
Swap | ||||
Bond series 30 | Cross Currency | British Pound | 387.7 | 454.1 |
Swap | ||||
Bond series 34 | Cross Currency | Norwegian Krone | 500.0 | 45.9 |
Swap |
In addition, the Company has entered into several interest rate swap agreements.
For further information regarding the effective coupon rate see note 21.3.
Under cross-currency swap contracts, the Group agrees to exchange cash flows
in different currencies calculated on agreed notional principal amounts. Such
contracts enable the Group to mitigate the risk of changing foreign exchange
rates on its cash flows.
The fair value of cross-currency swaps at the reporting date is determined by
discounting the future cash flows using the curves at the reporting date and the
credit risk inherent in the contract and is disclosed below.
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As the critical terms of the cross-currency swap contracts and their
corresponding hedged items are the same, the Group performs a qualitative
assessment of effectiveness and it is expected that the value of the cross-
currency swap contracts and the value of the corresponding hedged items will
systematically change in opposite direction in response to movements in the
underlying interest rates. The main sources of hedge ineffectiveness in these
hedge relationships are minor initial fair values of the hedging instruments and
the effect of the counterparty and the Group’s own credit risk on the fair value
of the cross-currency swap contracts, which is not reflected in the fair value of
the hedged item attributable to the change in foreign exchange rates.
As at December 31, 2024, the Company had interest rate swap and cap
agreements in place, as follows:
Carrying amount of hedged item | |||
as at December 31, | |||
2024 | 2023 | ||
Hedged item | Hedging instrument | (in € million) | |
Loans and borrowin gs | Swap and cap derivatives | 778.7 | 375.3 |
The swap and cap agreements are being used to hedge the exposure to variability
in cash outflows of the Group’s bank loans which arise from interest rate risks.
There is an economic relationship between the hedged items and the hedging
instruments.
The Group designated the intrinsic value of the swap and cap contracts as the
hedging instrument. The terms of the hedging instruments match the terms of
the hedged items, as described. The Group has established a hedge ratio of 1:1
for the hedge relationships, as the underlying risk being the interest rate and
the swap and cap derivatives are designed to mitigate the exposure.
To test the hedge effectiveness, the Group uses the hypothetical derivative
method and compares the changes in the fair value of the hedging instruments
against the changes in fair value of the hedged items attributable to the hedged
risk. The hedge ineffectiveness can arise from:
●
Different foreign exchange and interest rates’ curve applied to the hedge items
and hedging instruments.
●
Differences in timing of cash flows of the hedged items and hedging instruments.
●
The counterparties’ credit risk differently impacting the fair value movements of
the hedging instruments and hedged items.
The impact of the hedging instruments (Cross-Currency Swap, Interest Rate Swap
and Cap derivatives) on the consolidated statement of financial position is, as
follows:
Carrying amount | ||||
Net change in | ||||
fair value used | ||||
Line item in the | for measuring | |||
consolidated | ineffectiveness | |||
Risk category | Assets | Liabilities | financial statements | for the year |
in € millions | in € millions | |||
As at December 31, 2024 | ||||
Foreign exchange rate | Derivative | |||
and interest rate | 40.8 | 101.0 | financial assets / | (1.5) |
liabilities | ||||
As at December 31, 2023 | ||||
Foreign exchange rate | Derivative | |||
and interest rate | 22.6 | 21.3 | financial assets / | (93.5) |
liabilities | ||||
The impact of the hedged items on the consolidated statement of financial
position is, as follows:
Net change in | |||
Line item in the | fair value used | ||
consolidated | for measuring | ||
Carrying | financial | ineffectiveness for | |
Hedged item | amount | statements | the year |
in € millions | in € millions | ||
As at December 31, 2024 | |||
Straight bonds | 2,582.9 | Straight bonds | (6.3) |
Loans and borrowings | 778.7 | Loans and borrowings | 8.8 |
As at December 31, 2023 | |||
Straight bonds | 509.8 | Straight bonds | 93.9 |
Loans and borrowings | 375.3 | Loans and borrowings | (0.3) |
The ineffectiveness recognized in the consolidated statement of profit or loss
was a profit of €1.0 million (2023: profit of €0.1 million).
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25.4.2.2. Fair value hedges
As at December 31, 2024, the Company had foreign exchange rate and
interest rate swap derivative agreements in place, designated as hedging
instruments in fair value hedges, as follows:
Company receives | Company | |||
Hedging | (in notional | pays (in € | ||
Hedged item | instrument (*) | Notional currency | currency millions) | millions) |
Bond series M | FX Forward | Swiss Franc | 239.8 | 214.4 |
Bond series X | FX Forward | Swiss Franc | 99.8 | 91.3 |
Bond series 31 | FX Forward | Japanese Yen | 7,000.0 | 61.3 |
Cross- | ||||
GCP series I | Currency | Hong Kong Dollar | 900.0 | 92.6 |
Swap | ||||
Cross- | ||||
GCP series L | Currency | Japanese Yen | 7,500.0 | 75.5 |
Swap | ||||
Cross- | ||||
GCP series P | Currency | Hong Kong Dollar | 290.0 | 32.8 |
Swap |
(*)
all swaps are linked to bonds’ maturities
In addition, the Company has entered into several interest rate swap
agreements. For further information regarding the effective coupon rate
see note 21.3.
The swaps are being used to hedge the exposure to changes in fair value
of the Company’s straight bonds which arise from foreign exchange rate
and interest rate risks.
There is an economic relationship between the hedged items and the
hedging instruments as the terms of foreign exchange rate swaps match the
terms of the hedged items. The Group has established a hedge ratio of 1:1 for
the hedging relationships as the underlying risk of the foreign exchange rate
swaps is identical to hedged risk component. To test the hedge effectiveness,
the Group uses the hypothetical derivative method and compares the
changes in the fair value of the hedging instruments against the changes in
fair value of the hedged items attributable to the hedged risk.
The hedge ineffectiveness may arise from:
●
Different foreign exchange and interest rates’ curve applied to the hedge
items and hedging instruments.
●
Differences in timing of cash flows of the hedged items and hedging
instruments.
●
The counterparties’ credit risk differently impacting the fair value
movements of the hedging instruments and hedged items.
The impact of the hedging instruments on the consolidated statement of
financial position is as follows:
Carrying amount | ||||
Net change in | ||||
Line item in the | fair value used | |||
consolidated | for measuring | |||
financial | ineffectiveness | |||
Risk category | Assets | Liabilities | statements | for the year |
| in € millions | in € millions | |||
As at December 31, 2024 | ||||
Foreign exchange rate and | Derivative | |||
| interest rate | 18.8 | 57.5 | financial assets/ | (51.5) |
liabilities | ||||
As at December 31, 2023 | ||||
Foreign exchange rate and | Derivative | |||
| interest rate | 103.2 | 189.2 | financial assets/ | 19.4 |
liabilities | ||||
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The impact of the hedging instruments on the consolidated statement of
financial position is as follows:
Line item in the | Net change in fair value | ||
consolidated | used for measuring | ||
Carrying | financial | ineffectiveness | |
Hedged item | amount | statements | for the year |
in € millions | in € millions | ||
As at December 31, 2024 | |||
Straight bonds | 798.9 | Straight bonds | 49.0 |
As at December 31, 2023 | |||
Straight bonds | 2,186.9 | Straight bonds | (22.2) |
The ineffectiveness recognized in the consolidated statement of profit or
loss was a loss of €2.5 million (2023: loss of €2.8 million).
25.4.2.3. Hedge of net investments in foreign operations
The Group uses foreign exchange forward contracts derivative agreements,
designated as hedges of its exposure to foreign exchange risk on its
investments in foreign subsidiaries.
The foreign exchange forward contracts are being used to hedge the Group’s
exposure to the GBP foreign exchange risk on these investments. Gains or losses
on the retranslation of the forward contracts are transferred to OCI to offset
any gains or losses on translation of the net investments in the subsidiaries.
There is an economic relationship between the hedged item and the
hedging instruments as the net investment creates a translation risk that
will match the foreign exchange risk on the hedging instruments. The hedge
ineffectiveness will arise when the amount of the investment in the foreign
subsidiaries becomes lower than the amount of the notional amount of the
hedging instruments.
The impact of the derivative hedging instruments on the consolidated statement of
financial position is, as follows:
Carrying amount | |||||
Net change in | |||||
Line item in the | fair value used | ||||
Notional | consolidated | for measuring | |||
amount | financial | ineffectiveness for | |||
Risk Category | outstanding | Assets | Liabilities | statements | the year |
in € millions | in € millions | ||||
As at December 31, 2024 | |||||
Derivative | |||||
Foreign exchange rate | GBP 1,595.0 | - | 70.4 | financial | (58.6) |
assets | |||||
As at December 31, 2023 | |||||
Derivative | |||||
Foreign exchange rate | GBP 1,615.0 | 0.4 | 37.3 | financial | (38.2) |
assets | |||||
The impact of the hedged item on the consolidated statement of financial position is,
as follows:
Change in fair value | ||
Foreign currency | used for measuring | |
translation reserve | ineffectiveness for the year | |
| in € million | ||
Year ended December 31, 2024 | ||
Net investment in foreign subsidiaries | 111.7 | 58.6 |
Year ended December 31, 2023 | ||
Net investment in foreign subsidiaries | 54.4 | 38.2 |
The hedging gains and losses recognized in OCI before tax are equal to the change in
fair value used for measuring effectiveness. There is no ineffectiveness recognized in
profit or loss.
25.4.3. Derivatives not designated as hedging instruments
The Group uses interest rate swaps, collars, caps and floors to manage its
exposure to interest rate movements on its bank borrowings. These derivative
financial instruments are linked to the bank loan maturities (see note 21.1).
25.4.4. Other derivatives
As part of the share-to-share voluntary takeover offer the Company has made
to the shareholders of TLG in February 2020, the Company and an existing
shareholder of TLG (the “Investor”) entered into an agreement (the “Agreement”),
pursuant to which the Investor had agreed to refrain from tendering ca. 12
million of TLG shares (the “Custody Shares”) in the voluntary takeover offer or
to dispose of them in the absence of the Company’s consent in a due time and
no sooner than 34 months after entering the Agreement (“Minimum Period”).
As a consideration for such undertaking, the Investor has been entitled to
receive for the period it holds the Custody Shares an agreed minimum gross
return on the Custody Shares (“Custody Interest”) and in the event of a future
disposal a preset share price for the Custody Shares. Following the Minimum
Period, the Investor has the right to dispose of the Custody Shares. By doing so,
the Company committed to indemnify the Investor for any difference between
the consideration the Investor receives in such disposal and the preset share
price (“PPM Instrument”). To postpone such disposal decision for up to 10 years,
the Company has the option to provide an interest-bearing loan, secured by
the Custody Shares, in the amount of the preset share price multiplied by the
number of Custody Shares. In accordance with IFRS, the Company accounted
for the Custody Interest as a financial liability in its consolidated statement
of financial position and the PPM Instrument as a derivative financial liability
measured at fair value through profit or loss, derived by the share price of TLG
being the underlying asset. During 2023, the Company made available ca. €350
million, indirectly backed with the Custody Shares, of which €201 million in the
form of short-term collateralized credit default swap which is presented as a
derivative financial asset and accounted for at fair value. As at December 31,
2024, the PPM Instrument amounted to €130.0 million (2023: €114.9 million).
The Group manages its capital to ensure that it will be able to continue as a going
concern while increasing the return to owners through striving to keep a low debt
to equity ratio. The management closely monitors Loan to Value ratio (LTV), which is
calculated, on an entity level or portfolio level, where applicable, in order to ensure that
it remains within its quantitative banking covenants and maintain a strong credit rating.
The Group seeks to preserve its conservative capital structure with an LTV to remain
below the Board of Directors’ guidance of 45%. As at December 31, 2024, the LTV ratio
was at 42% (2023: 43%), and the Group did not breach any of its loan covenants, nor
did it default on any other of its obligations under its loan agreements. LTV covenant
ratio may vary between the subsidiaries of the Group. The Company regularly reviews
compliance with Luxembourg and local regulations regarding restrictions on minimum
capital. During the years covered by these consolidated financial statements, the
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278
Consolidated Financial Statements
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LEASES
The Group has entered into long-term rent agreements as a lessor of its investment
property. The future minimum rental income under non-cancelable operating leases is
as follows:
As at December 31, | ||
2024 | 2023 | |
in € millions | ||
First year | 811.7 | 816.9 |
Between one to two years | 779.1 | 774.7 |
Between two to three years | 714.9 | 698.3 |
Between three to four years | 599.6 | 605.1 |
Between four to five years | 496.3 | 511.3 |
More than five years | 3,038.1 | 3,176.6 |
Total | 6,439.7 | 6,582.9 |
Düsseldorf
COMMITMENTS
As at December 31, 2024, the Group had commitments for future capital expenditures
on real estate properties and given guarantees of ca. €0.7 billion (2023: €0.4 billion).
Furthermore, the Group had signed deals to sell real estate in a volume of ca. €0.3
billion (2023: €0.2 billion), which were not yet completed and are subject to conditions
precedent (refer to note 30 for completions occurred after the reporting period). The
Company estimates the completion of the transactions to take place within the next
CONTINGENT ASSETS AND LIABILITIES
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GROUP SIGNIFICANT HOLDINGS
The details of the significant holdings under the Group are as follows:
Holding rate as at December 31, | |||||
Name | Place of incorporation | Principal activities | Main place of principal activity | 2024 | 2023 |
Subsidiaries held directly and indirectly by the Company | in % | ||||
ATF Netherlands B.V. | Netherlands | Financing | Netherlands | 100 | 100 |
AT Securities B.V. | Netherlands | Financing | Netherlands | 100 | 100 |
Aroundtown Finance S.à r.l. | Luxembourg | Financing | Luxembourg | 100 | - |
Aroundtown Limited | Cyprus | Holdings | Germany, Netherlands, United Kingdom | 100 | 100 |
Aroundtown Real Estate Limited | Cyprus | Holdings | Germany, Netherlands, United Kingdom | 100 | 100 |
Grand City Properties S.A. | Luxembourg | Holdings and real estate | Germany, United Kingdom | 61.86 | 62.68 |
Grand City Properties Finance S.à r.l. | Luxembourg | Financing | Luxembourg | 61.86 | - |
Edolaxia Group Limited | Cyprus | Holdings | Cyprus | 100 | 100 |
TLG Immobilien AG | Germany | Holdings and real estate | Germany | 88.25 | 88.11 |
WCM Beteiligungs- und Grundbesitz- AG | Germany | Holdings and real estate | Germany | 87.01 | 86.39 |
Primecity Investment PLC | Cyprus | Holdings and real estate | Germany | 99.99 | 99.97 |
Aroundtown Holdings B.V. | Netherlands | Holdings and real estate | Germany, United Kingdom | 100 | 100 |
Aroundtown Holdings S.à r.l. | Luxembourg | Holdings and real estate | United Kingdom, Switzerland | 100 | 100 |
Turnaround Capital Investment Fund (Luxembourg) SCSp RAIF | Luxembourg | Investment Fund | United Kingdom, Netherlands | 62.5% | - |
Turnaround Capital Investment Fund (Luxembourg) Master SCA SICAV-RAIF | Luxembourg | Investment Fund | United Kingdom, Netherlands | 62.5% | - |
BSC München Grundstücks GmbH & Co. KG | Germany | Real estate | Germany | 50.57 | 50.57 |
Associates and joint ventures held indirectly by the Company | |||||
Globalworth Real Estate Investment Limited | Guernsey | Real estate | Poland, Romania | 30.43 | 30.38 |
Tevat Limited | Cyprus | Holdings | Cyprus | 50 | 50 |
Capitals Property S.à r.l. | Luxembourg | Real estate | Germany | 30 | 30 |
SIGNIFICANT SUBSEQUENT EVENTS
●
The Group completed the disposal of over €120 million of investment property and
signed new deals to dispose of investment property with value of ca. €90 million.
●
The Group signed over €180 million of investment property acquisitions.
●
The Group collected over €100 million as repayment of asset-backed loans.
●
The Company redeemed two bond series at their maturity with total nominal value
AROUNDTOWN
SA
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Consolidated Financial Statements
280
Leipzig
281
Opinion
We have audited the consolidated financial statements of Aroundtown SA and its
subsidiaries (the “Group”), which comprise the consolidated statement of financial
position as at 31 December 2024, and the consolidated statement of profit or loss,
consolidated statement of other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended,
and notes to the consolidated financial statements, including material accounting policy
information and other explanatory information.
In our opinion, the accompanying consolidated financial statements give a true and fair
view of the consolidated financial position of the Group as at 31 December 2024, and
its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with IFRS Accounting Standards as adopted by the European Union.
Basis for opinion
We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of
23 July 2016 on the audit profession (the “Law of 23 July 2016”) and with International
Standards on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de
Surveillance du Secteur Financier (the “CSSF”). Our responsibilities under the EU
Regulation N° 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg
by the CSSF are further described in the « Responsibilities of “réviseur d’entreprises
agréé” for the audit of the consolidated financial statements » section of our report. We
are also independent of the Group in accordance with the International Code of Ethics
for Professional Accountants, including International Independence Standards, issued
by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted
for Luxembourg by the CSSF together with the ethical requirements that are relevant to
our audit of the consolidated financial statements, and have fulfilled our other ethical
responsibilities under those ethical requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of the audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Valuation of Investment Properties
a)
Why the matter was considered to be one of most significance in our audit of the
consolidated financial statements for the year ended 31
st
December 2024
REPORT OF THE RÉVISEUR
D’ENTREPRISES AGRÉÉ
Report on the audit of the consolidated financial statements
To the Shareholders of
Aroundtown SA
37, Boulevard Joseph II
L-1840 Luxembourg
Luxembourg
282
We refer to the accounting policies at note 2.3 “Significant accounting, judgements,
estimates and assumptions”, note 3.13 “Investment property”, note 3.14 “Non-current
assets classified as held for sale” and note 13 “Investment property” in the consolidated
financial statements of Aroundtown SA.
As at 31 December 2024 the Group held a portfolio of investment properties with a fair
value of MEUR 24,375.3 (31 December 2023: MEUR 24,632.4) and investment properties
within assets classified as held for sale with a fair value of MEUR 691.8 (31 December
2023: MEUR 408.3).
The valuation of investment properties is a significant judgement area and is underpinned
by a number of assumptions.
The fair value measurement of investment property is inherently subjective and requires
valuation experts and the Group’s management to use certain assumptions regarding
rates of return on the Group’s assets, future rent, occupancy rates, contract renewal terms,
the probability of leasing vacant areas, asset operating expenses, the tenants’ financial
stability and the implications of any investments made for future development purposes
in order to assess the future expected cash flows from the assets. Any change in the
assumptions used to measure the investment property could cause a significant change
on the resulting fair value.
The Group uses external valuation reports issued by external independent professionally
qualified valuers to determine the fair value of its investment properties.
The external valuers were engaged by management and performed their work in
compliance with the Royal Institute of Chartered Surveyors Valuation – Professional
Standards, TEGoVA European Valuations Standards and IVSC International Valuation
Standard. The valuers used by the Group have the necessary experience of the markets
in which the Group operates. In determining a property’s valuation, the external valuers
take into account property-specific characteristics and information such as the current
tenancy agreements and rental income. They apply assumptions for yields and estimated
market rent, which are influenced by prevailing market yields and comparable market
transactions, to arrive at the final valuation.
The significance of the estimates and judgments involved, coupled with the fact that
only a small percentage difference in individual property valuations, when aggregated,
could result in a material misstatement in the consolidated statement of profit or loss
and consolidated statement of financial position, warrants specific audit focus in this area.
b)
How the matter was addressed during the audit
Our procedures over valuation of investment properties included but were not limited
to the following:
-
We tested the design and implementation of the key controls around the
determination and monitoring of the fair value measurement of the investment
properties;
-
We assessed the competence, capabilities, qualifications, independence and integrity
of the external valuers and read their terms of engagement with the Group to
determine whether there were any matters that might have affected their objectivity
or may have imposed scope limitations on their work;
-
Through the involvement of our internal property valuation specialists, on a sample
basis, we tested the accuracy and completeness of the inputs used by the external
valuers, as well as appropriateness of valuation parameters used, such as discount
capitalisation rates, market rents per square meter and capital expenditure, vacancy
rates, comparable price per square meter and development cost;
-
In case a valuation was performed considering the highest and best use, we assessed,
on a sample basis, the appropriateness of the special assumptions considered, and
whether these assumptions were technically possible, legally permissible and
financially feasible;
-
Through the involvement of our own property valuation specialists, on a sample
basis, we tested assessed the valuation process and significant assumptions and
critical judgement areas by benchmarking the key assumptions to external industry
data and comparable property transactions, in particular the yields applied;
-
We considered the adequacy of the disclosures in the consolidated financial
statements, and the Group’s descriptions regarding the inherent degree of
subjectivity and the key assumptions in estimates.
Other information
The Board of Directors is responsible for the other information. The other information
comprises the information stated in the consolidated annual report including the Board
of Director’s Report but does not include the consolidated financial statements and our
report of the “réviseur d’entreprises agréé” thereon.
Our opinion on the consolidated financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility
283
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report this fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and Those Charged with Governance for
the consolidated financial statements
The Board of Directors is responsible for the preparation and fair presentation of the
consolidated financial statements in accordance with IFRS Accounting Standards as
adopted by the European Union, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to fraud or error.
The Board of Directors is responsible for presenting and marking up the consolidated
financial statements in compliance with the requirements set out in the Delegated
Regulation 2019/815 on European Single Electronic Format (“ESEF Regulation”).
In preparing the consolidated financial statements, the Board of Directors is responsible
for assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial
reporting process.
Responsibilities of the “réviseur d’entreprises agréé” for the audit of the
consolidated financial statements
The objectives of our audit are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé”
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the EU Regulation N° 537/2014,
the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will
always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis
of these consolidated financial statements.
Our responsibility is to assess whether the consolidated financial statements have
been prepared in all material respects with the requirements laid down in the ESEF
Regulation.
As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of
23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise
professional judgment and maintain professional skepticism throughout the audit. We
also:
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Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
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Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Board of Directors.
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Conclude on the appropriateness of the Board of Directors’ use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our report of the “réviseur d’entreprises
agréé” to the related disclosures in the consolidated financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”.
However, future events or conditions may cause the Group to cease to continue as a
going concern.
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Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves
fair presentation.
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Obtain sufficient appropriate audit evidence regarding the financial information of
the entities and business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe
these matters in our report unless law or regulation precludes public disclosure about
the matter.
Report on other legal and regulatory requirements
We have been appointed as “réviseur d’entreprises agréé” by the Shareholders on 26
June 2024 and the duration of our uninterrupted engagement, including previous
renewals and reappointments, is eight years.
The Board of Director’s Report is consistent with the consolidated financial statements
and has been prepared in accordance with applicable legal requirements.
The Corporate Governance Statement is included in the Board of Director’s Report.
The information required by Article 68ter paragraph (1) letters c) and d) of the law of
19 December 2002 on the commercial and companies register and on the accounting
records and annual accounts of undertakings as amended, is consistent with the
consolidated financial statements and has been prepared in accordance with applicable
legal requirements.
We confirm that the audit opinion is consistent with the additional report to the audit
committee or equivalent.
We confirm that the prohibited non-audit services referred to in the EU Regulation
N° 537/2014 were not provided and that we remained independent of the Group in
conducting the audit.
We have checked the compliance of the consolidated financial statements of the Group
as at 31 December 2024 with relevant statutory requirements set out in the ESEF
Regulation that are applicable to consolidated financial statements.
For the Group it relates to:
•
Consolidated financial statements prepared in a valid xHTML format;
•
The XBRL markup of the consolidated financial statements using the core taxonomy
and the common rules on markups specified in the ESEF Regulation.
In our opinion, the consolidated financial statements of Aroundtown SA as at 31
December 2024, identified as 529900H4DWG3KWMBMQ39-2024-12-31-0-en.Zip, have
been prepared, in all material respects, in compliance with the requirements laid down
in the ESEF Regulation.
Our audit report only refers to the consolidated financial statements of Aroundtown SA
as at 31 December 2024, identified as 529900H4DWG3KWMBMQ39-2024-12-31-0-en.
Zip, prepared and presented in accordance with the requirements laid down in the ESEF
Regulation, which is the only authoritative version.
Luxembourg, 26 March 2025
KPMG Audit S.à r.l.
Cabinet de révision agréé
Muhammad Azeem
AROUNDTOWN
SA
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Consolidated Financial Statements
285
Davos