GRAND CITY PROPERTIES S.A.
I
Board of Directors' Report
1
20
24
CONSOLIDATED
ANNUAL REPORT
For the year ended 31 December
Berlin
GRAND CITY PROPERTIES S.A.
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Board of Directors' Report
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Hamburg
CONTENT
IMPRINT
Publisher: Grand City Properties S.A.
|
37, Boulevard Joseph II
|
L-1840 Luxembourg |
phone:
+352 28 77 87 86
|
e-mail:
|
www.grandcityproperties.com
01
BOARD OF DIRECTORS’ REPORT
T
he Company & Portfolio
10
Consolidated Sustainability Statement
36
General Information
37
ESRS 2 General Disclosures
37
Environmental Information
65
ESRS E1 - Climate Change
65
EU Taxonomy Disclosures
70
ESRS E2 - Pollution
95
Social Information
98
ESRS S1 - Own Workforce
98
ESRS S2 - Workers in the Value Chain
113
ESRS S3 - Affected Communities
120
ESRS S4 - Consumers and End-Users
126
Governance Information
135
ESRS G1 - Business Conduct
135
Appendix
143
Independent Limited Assurance Report (Independent Auditor)
146
Business Performance & Analysis
150
Notes on Business Performance
151
EPRA Performance Measures
164
Alternative Performance Measures
174
02
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss
184
Consolidated Statement of Comprehensive Income
185
Consolidated Statement of Financial Position
186
Consolidated Statement of Changes in Equity
188
Consolidated Statement of Cash Flows
190
Notes to the Consolidated Financial Statements
192
Report of the Rèviseur d’Enterprises Agréé (Independent Auditor)
244
01
BOARD OF DIRECTORS’ REPORT
GRAND CITY PROPERTIES S.A.
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Board of Directors' Report
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in €’000 unless otherwise
indicated
Dec 2024
Change
Dec 2023
Total Assets
11,218,811
3%
10,918,147
Investment Property
8,628,962
0%
8,629,083
Loan-to-Value
33%
-4%
37%
Cash and liquid assets
(including those recorded under held-for-sale)
1,514,674
23%
1,230,483
Total Equity
5,414,205
4%
5,230,109
Total Liabilities
5,804,606
2%
5,688,038
Balance sheet highlights
P&L Highlights
in €’000 unless otherwise
indicated
FY 2024
Change
FY 2023
Net Rental Income
422,693
3%
411,313
Adjusted EBITDA
335,010
5%
319,647
FFO I
187,534
2%
183,936
FFO I per share (in €)
1.08
1%
1.07
EBITDA
376,707
-
(572,232)
Profit (loss) for the year
242,131
-
(638,068)
Basic earnings (loss)
per share (in €)
1.14
-
(3.18)
Diluted earnings (loss)
per share (in €)
1.14
-
(3.17)
In €‘000 unless otherwise indicated
2024
2023
EPRA NRV
4,902,192
4,606,481
EPRA NRV per share (in €)
27.8
26.7
EPRA NTA
4,279,793
4,013,761
EPRA NTA per share (in €)
24.3
23.2
EPRA NDV
3,782,254
3,745,313
EPRA NDV per share (in €)
21.4
21.7
EPRA Earnings*
163,771
153,678*
EPRA Earnings per share* (in €)
0.95
0.89*
EPRA Earnings (excl. perp.)*
206,133
187,378
EPRA Earnings (excl. perp.) per share* (in €)
1.19
1.09
EPRA LTV
46%
48%
EPRA LTV (incl. RETT)
43%
46%
EPRA Net initial yield (NIY)
3.7%
3.6%
EPRA "topped-up" NIY
3.7%
3.6%
EPRA Vacancy
3.8%
3.8%
EPRA Cost Ratio
(incl. direct vacancy costs)
21.3%
22.7%
EPRA Cost Ratio
(excl. direct vacancy costs)
19.6%
20.8%
EPRA Like-for-like rental growth
3.8%
3.3%
EPRA Performance measures
Key Financials
*
according to the updated EPRA methodology. For more details, refer to the EPRA Performance Measures section of the
report, 2023 figures adjusted accordingly
GRAND CITY PROPERTIES S.A.
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Operational Performance Highlights
Capturing operational
upside potential
CAGR
+4.3%
Resulting in higher
operational profitability
In-place rent
(in €/sqm)
Dec 2021
8.1
Dec 2023
8.6
Dec 2024
9.2
Dec 2022
8.2
Total net rent growth
Dec 2024
+3.8%
L-F-L
Total net rent growth
Dec 2023
+3.3%
L-F-L
Adjusted EBITDA
(in € millions)
FFO I
(in € millions)
FFO I per share
(in €)
Strong operational performance
driven by solid like-for-like rental
growth and low vacancy.
•
GCP is successfully capturing the operational upside potential
resulting from the supply-demand imbalance in its portfolio,
contributing to further increases in market rents
•
High reversionary potential of 23% to current market rents
provide potential for future increasing cash flows
2024
188
2023
184
+2%
2024
1.08
2023
1.07
+1%
335
320
+5%
2024
2023
margin
78%
79%
GRAND CITY PROPERTIES S.A.
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Strong Financial Profile
Financial Profile Optimisation Highlights
AVERAGE DEBT
MATURITY
LOW COST
OF DEBT
ICR
LTV
CASH AND
LIQUID ASSETS
CREDIT RATING
S&P
UNENCUMBERED
ASSETS
1.9%
DEC 2024
33%
DEC 2024
€6.4bn
73%
of value
DEC 2024
4.8y
DEC 2024
5.7x
2024
BBB+
NEGATIVE OUTLOOK
DEC 2024
€1.5bn
Cash and liquid assets
amount to 34% of total debt
DEC 2024
Valuations have reached
bottom, turning point in
mid 2024
•
Positive revaluations of
€50 million in FY 2024,
reflecting +0.5% L-F-L
•
Driven by operational
growth, offsetting yield
expansion
•
GCP’s current rental yield is
at 4.9% , up from 4.8% in
December 2023
Successful return to
capital markets
•
Perpetual notes
exchanges with over 85%
acceptance rate
•
First bond issuance in
three years took place
in July 2024, amounting
to €500m, and was 7x
oversubscribed
Further deleveraging
through disposals
•
ca. €350 million signed
disposals in 2024, ca.
€125 million included in
HFS expected to complete
in coming periods
•
ca. €270 million of
completed disposals in 2024
•
Disposals carried out at
around book values
GRAND CITY PROPERTIES S.A.
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Dear Stakeholders,
In 2024, we observed continued positive developments in the operational trends underpinning strong
letting demand across all our regions. The capital markets also experienced a significant shiſt in sentiment
during the year, leading to increased activity within the real estate sector. These improvements supported
the transaction market, property valuations and bolstered our capital market initiatives, including the
successful execution of perpetual note exchanges and our first bond issuance since 2021. Accordingly,
2024 marks as a pivotal year into stabilisation, following a period of volatility and uncertainty.
Operationally, our performance remained robust throughout the year, benefiting from the strong
platform we have built over previous years. GCP’s exceptional service to its tenants, and its ability to
attract new tenants, has delivered strong and increasing internal growth. As a result, GCP captured a
robust 3.8% rent like-for-like growth in 2024, up from 3.3% in 2023 and 2.9% in 2022.
The adjusted
EBITDA increased in 2024 by 5% compared to 2023, despite being a net seller, as the combined result
of increasing rents and of operational efficiency gains offset the impact of disposals. GCP’s operational
results were supported by strong and sustainable dynamics throughout its portfolio locations, with key
structural factors such as growing population, urbanisation, and the growing number of single person
households driving sustained housing demand. Meanwhile, supply constraints persist due to elevated
construction costs, high interest rates, and regulatory challenges—particularly in Germany, where
delays and bureaucratic inefficiencies continue to impact housing development. Although government
initiatives aim to address the shortfall, these have had no significant impact on new supply, with annual
housing completions in Germany decreasing further in 2024, remaining far below targets and failing to
meet the needs of a growing population. Looking ahead, it is expected that this shortage will continue to
persist over the mid-term as the number of permits granted continued to decrease strongly throughout
2024, reaching lows not seen since the 2010’s. These trends provide further tailwind for our operations,
reflected in 23% reversionary rent potential, which continues to expand despite the strong like-for-
like rental growth extracted during the year, and which is expected to provide further internal growth
potential over the coming years. FFO I for the year 2024 was €188 million, broadly stable compared to
last year, as a result of the strong like-for-like rental growth which mostly offset the negative impact of
higher perpetual note attribution and finance costs. FFO I per share was also stable, amounting to €1.08
for 2024, with full-year FFO I guidance achieved at the upper end of the expected range.
The macroeconomic environment in the first half of 2024 was shaped by remaining uncertainty on
inflation and elevated interest rates, carried over from central banks’ monetary policies in 2023. While
markets expected the European Central Bank (ECB) to start cutting rates in 2024, the timing and
trajectory were uncertain, causing volatility in capital markets. These conditions placed pressure on
the broader economy and the real estate sector, slowing down transaction markets. However, by mid-
year the ECB, as well as other central banks, began easing monetary policies. The ECB implemented
four rate cuts in the latter half of the year, signalling a shiſt toward a more accommodative stance.
This transition not only improved the economic outlook but also helped restore confidence across the
market. Lower interest rates facilitated enhanced access to capital markets, enabling companies to
pursue acquisitions and strategic growth initiatives. As a result, transaction volumes within the sector
began a moderate recovery.
Throughout 2024, we pursued a disciplined approach to asset disposals, successfully completing
several transactions. We signed ca. €350 million of new disposals in 2024 of which ca. €270 million
were completed in 2024 and ca. €125 million is expected to close during 2025. In addition, we completed
during 2024 ca. €40 million deals signed in 2023. The disposals primarily included the sale of units
located in London, as well as in NRW, Berlin, Hessen and Braunschweig. In 2024, we also acquired
properties amounting to over €45 million, primarily comprising of over 100 units in London, which was
acquired by gaining control over properties which were previously included under loans-to-own. While
maintaining a sizable disposal pipeline, we have become more selective in prioritising price optimisation
over liquidity. This shiſt in strategy reflects our confidence in the improving transaction market and
our focus on maximising shareholder value. The positive trends in the real estate market suggest that
transaction activity is likely to increase further in the coming months.
As of December 2024, the Company’s portfolio comprises 61 thousand units, primarily in metropolitan
areas of Germany and London, with a low vacancy rate of 3.8%. The Company benefits from the strong
portfolio, and the ongoing supply-demand imbalance continues to drive market rent increases in our
locations, creating significant upside potential. The portfolio generates an annual rental income of €413
million, with an average rent of €9.2 per sqm and an average value of €2,203 per sqm, resulting in a
rental yield of 4.9%.
Letter from the Board
and the Management
GRAND CITY PROPERTIES S.A.
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In 2024 we took proactive steps to strengthen our financial position. GCP launched perpetual exchange
and tender offers to the holders of two of its perpetual notes with aggregate nominal amount of €550
million. Due to the market volatility and effective shut down of capital markets, the Company did
not use its voluntary option to call the notes in 2023. The transactions were highly successful, with
a high combined acceptance rate of over 85%. Through the transactions, we provided a solution to
our perpetual notes investors, which also resulted in savings of €2 million of coupon annually and
recovery of the equity content on the exchanged notes under S&P’s rating methodology, supporting
the Company’s credit rating metrics. In July 2024, we issued our Series Y bond at an issue volume
of €500 million and a coupon of 4.375%. The issuance was our first new bond issuance since 2021
and received strong support from leading global investors and was seven times oversubscribed. The
proceeds were used for the repayment of short-term debt. Furthermore, in December 2024 we sold
most of our remaining treasury shares at a price of €11.9 per share to several international investors
who approached the Company and were looking to obtain a relatively large stake in GCP. The disposal
of the treasury shares resulted in ca. €45 million equity and of cash injection, strengthening the
equity position of the Company while only having a slight negative impact on the share count. These
transactions, alongside other liability management measures, have bolstered our balance sheet and
liquidity position while extending our average debt maturity. By the end of 2024, our liquidity stood at
€1.5 billion, up from €1.2 billion at the end of 2023.
The high-interest rate environment during the first half of the year continued to negatively impact
property valuations across the industry and the Company recorded for the first half devaluations in the
amount of €195 million. In the second half of the year, GCP’s strong operational growth succeeded in
offsetting the impact and recorded positive property revaluations during this period. Our operational
strength has played a critical role in mitigating the impact of yield expansion on valuations. While the
transaction market activity started to pick up, supported by interest rate cuts, and rents and reversionary
potential continued to increase, market expected that the bottom of devaluations had been reached
aſter the first half of 2024. In the second half of 2024, values started to increase again on the back
of continued strong operational growth. For the year, the Company recorded property revaluations
of approximately €50 million, representing a like-for-like change of 0.5% and thus remaining broadly
stable compared to the end of 2023, despite the devaluations in the first half of the year.
We anticipate gradual improvement in valuations moving forward, with positive values in 2025
expected to be driven primarily by operational growth.
Through pro-active and targeted efforts, including property disposals, dividend suspension, and the
sale of our remaining treasury shares, we were able to further reduce our leverage ratio throughout the
year, standing at 33% as of December 2024, compared to 37% at the end of 2023. This figure remains
well below our internal policy limit of 45%. Additionally, our financial profile remains conservative,
underscored by a hedging ratio of 95%, an average debt maturity of 4.8 years, and a low cost of debt
at 1.9%. These measures, combined with an interest coverage ratio (ICR) of 5.7x, highlight the strength
of our financial foundation.
Looking ahead to 2025, we anticipate that the European real estate market will experience a recovery
phase, supported by the stabilisation observed in 2024 and a more favourable macroeconomic
environment. Investor confidence has improved alongside the easing of interest rates, creating
conditions beneficial to growth. The structural drivers of housing demand, combined with the
stabilisation of property valuations and an increase in transaction volumes, provide a strong foundation
for the year ahead. For 2025 we are expecting FFO I to be in the range of €185 - €195 million, reflecting
the positive impact of further operational growth which we expect will more than offset the negative
impact of recent disposals.
In 2024, we maintained our high standards for corporate social responsibility as a fundamental
component of our business strategy, reinforcing our role as a responsible stakeholder in the market.
Our commitment to tenant satisfaction was evident through a variety of initiatives and services
delivered both online and in person. These included tenant engagement activities and exclusive benefit
programs. A key highlight was the GCP Cinema Summer Festival, hosted at multiple locations, offering
open-air movie screenings alongside at-home viewing options via pre-ordered GCP Cinema Boxes
containing treats. The event concluded with a digital competition featuring popcorn machines as prizes,
fostering a sense of community and supporting the GCP brand. Additionally, we reintroduced our digital
Advent calendar, which provided daily giveaways, including GCP loyalty points, strengthening tenant
connections.
In line with our focus on digitalisation and self-service, we further enhanced the GCP app and portal
services in 2024. The tenant app not only enables prospective and existing tenants to manage leases,
upload documents, monitor monthly energy consumption, and submit service requests, but recent
upgrades included functionalities for tenant communications, consultation hours, rent reminders,
and contract management. An AI-powered chatbot was introduced to improve response times and
accessibility, streamlining tenant support, and enhancing operational efficiency. These advancements
supported our continued high level of tenant satisfaction. This progress has been recognised with the
recertification of our service center by TÜV for both Quality Management and Service Quality.
Supporting our employees remains an essential aspect of our corporate social responsibility efforts.
We have taken meaningful steps to position ourselves as a preferred employer within the real estate
sector. We initiated the development of the “Career Pathways” program, scheduled for completion in
2025. This initiative aims to provide employees with greater clarity regarding growth and development
opportunities. Additionally, KPI-based evaluations have been extended to a larger group of employees,
along with the introduction of surveys to support self-development. We also conducted the second
round of the “Activate the Base” program, which encourages employees to develop their own
sustainability projects with guidance from a coach.
GRAND CITY PROPERTIES S.A.
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We continued to actively support local organisations and initiatives through direct contributions and
the GCP Foundation. In 2024, the foundation extended support to over ten institutions in Leipzig,
a German Red Cross daycare center, youth sports clubs, and educational organisations. Assistance
was also provided to emergency services and community projects. In Cologne, the GCP Foundation
supported an association for children with cancer by funding new furniture for the parent house at the
University Hospital of Cologne, improving living conditions for families during treatment. Additional
contributions included funding for outpatient care and bereavement services, donations to local food
banks, and providing financial support for the installation of new equipment in playgrounds. These
efforts reinforced our commitment to addressing local needs and supporting community welfare.
As part of our ESG strategy, we aim to reduce CO
2
emissions by 40% by 2030 compared to 2019 levels.
In 2024, we continued integrating sustainability into our operations by advancing the establishment
of an environmental database and achieving semi-automated data collection through an app. We also
conducted energy assessments of our buildings. These initiatives support our goal of incorporating
the expertise of the energy department into capital expenditure planning to facilitate emissions
reductions. We continue to implement additional energy efficiency measures, including smart water
metering initiatives and biodiversity projects at our properties. Progress was also made in transitioning
to renewable and climate-neutral energy sources. We encouraged tenants to adopt more sustainable
energy practices and improve energy efficiency and accordingly we are confident to meet and potentially
outperform our targets.
Our work in these areas has been reflected in external assessments. Sustainalytics rated us as low
risk, placing us among the top 9% of companies globally. Additionally, we ranked in the top 6% of real
estate companies in S&P Global’s Corporate Sustainability Assessment (CSA), in the top 55% in MSCI
Real Estate Management & Service, rated BBB, and by ISS with a C+ rating awarded with Prime status,
putting us in the top 20%. We are also included in the Bloomberg Gender Equality Index, which serves
as a sustainability index. For the eighth consecutive year in September 2024, we received the EPRA BPR
Gold Award and the EPRA sBPR Gold Award for our financial transparency and sustainability reporting.
We are also happy to report that we have been able to further enhance our corporate governance
with two new highly experienced independent directors, Ms. Monica Porfilio and Mr. Scot Wardlaw,
thereby expanding our board of directors to five, of whom 80% are now independent or non-
executive and 40% is female.
We extend our sincere appreciation to all stakeholders for their continued confidence in GCP. The
management recognises and values the commitment and efforts of our employees throughout 2024.
Their dedication has been instrumental in enhancing the efficiency and quality of our services while
enabling GCP to remain agile and responsive in navigating the prevailing market conditions. Looking
ahead to 2025, we are committed to pursuing our new objectives and targets, with a focus on
sustainably generating long-term value for all stakeholders.
Luxembourg, 17 March 2025
Christian Windfuhr
Chairman and member
of the Board of Directors
Simone Runge-Brandner
Member of the Board
of Directors
Markus Leininger
Member of the Board
of Directors
Monica Porfilio
Independent Director
Scott Wardlaw
Independent Director
Idan Hadad
CFO
Refael Zamir
CEO
GRAND CITY PROPERTIES S.A.
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Dresden
Grand City Properties S.A. and its investees (the “Company”, “GCP” or the
“Group”) Board of Directors (the “Board”) hereby submits the annual report as
of 31 December 2024.
The figures presented in this Board of Director’s Report are based on the consolidated
financial statements as of 31 December 2024, unless stated otherwise.
GCP is a specialist in residential real estate, investing in value-add opportunities
in densely populated areas predominantly in Germany as well as London.
The Group’s portfolio, excluding assets held-for-sale and properties under
development, as of December 2024 consists of 60,820 units (hereinaſter “GCP
portfolio” or “the Portfolio”) located in densely populated areas with a focus on
Berlin, Germany’s capital, North Rhine-Westphalia, Germany’s most populous
federal state, the metropolitan regions of Dresden, Leipzig and Halle and other
densely populated areas as well as London.
GCP is focused on assets in densely populated urban locations with robust
and sustainable economic and demographic fundamentals, and with multiple
value-add drivers that it can pursue using its skills and capabilities such as
vacancy reduction, increasing rents to market levels, improving operating cost
efficiency, increasing market visibility, identifying potential for high-return capex
investments, and spotting potential for significant benefits from the Company’s
scale. GCP’s management has vast experience in the German real estate market
with a long track record of success in repositioning properties using its tenant
management capabilities, tenant service reputation, and highly professional and
specialised employees.
In addition, GCP’s economies of scale allow for considerable benefits of a
strong bargaining position, a centralised management platform supported by
centralised IT/soſtware systems, and a network of professional connections.
This strategy enables the Company to create significant value in its portfolio and
generate stable and increasing cash flows.
The Company
GRAND CITY PROPERTIES S.A.
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Berlin
Population density in Germany
inhabitants per sqkm inhabitants per sqkm*
Attractive portfolio concentrated in densely populated
metropolitan areas with value-add potential
GCP’s well-balanced and diversified portfolio is composed of
properties in attractive micro-locations with identified value
creation potential primarily located in major German cities and
urban centers as well as in London.
The Group’s well-allocated portfolio provides for strong geographic
and tenant diversification and benefits from economies of scale,
supporting the risk-averse portfolio approach. GCP’s focus on
densely populated areas is mirrored by 23% of the Portfolio being
located in Berlin, 21% in NRW, 14% in the metropolitan region
of Dresden, Leipzig and Halle, and 20% in London, four clusters
with their own distinct economic drivers. The portfolio also
includes additional holdings in other major urban centres with
strong fundamentals such as, Nuremberg, Munich, Mannheim,
Frankfurt, Hamburg and Bremen.
London
* based on data from Statistisches Bundesamt
1,000 - 4,790
300 - 1,000
150 - 300
100 - 150
36 - 100
Portfolio
Dresden
Berlin
Mainz
NRW
Leipzig
Fürth
Munich
Nuremberg
Halle
Frankfurt
Mannheim
Kaiserslautern
Hamburg
Bremen
Dresden
GRAND CITY PROPERTIES S.A.
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GRAND CITY PROPERTIES S.A.
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21% NRW
Industrial center
of Germany.
23%
BERLIN
Political center & Start-up hub.
14% DRESDEN/
LEIPZIG/HALLE
Dynamic economy driven by technology
and education with robust demographic
fundamentals.
20% LONDON
Leading global city attracting
innovation and high-quality talent.
4%
Hamburg/Bremen
4%
Nuremberg/Fürth/Munich
4%
Mannheim/KL/
Frankfurt/Mainz
10%
Others
Diversified portfolio with
distinct economic drivers
Portfolio overview
GCP has assembled a portfolio of high-
quality
assets
in
densely
populated
metropolitan
regions,
benefiting
from
diversification among dynamic markets
with positive economic fundamentals and
demographic developments.
December 2024
Value (in €M)
Area (in k sqm)
EPRA vacancy
Annualised
net rent (in €M)
In-place rent
per sqm (in €)
Number of units
Value per sqm
(in €)
Rental yield
(1)
Berlin
1,951
619
3.9%
73
9.8
8,387
3,150
3.7%
NRW
1,744
1,140
4.4%
92
6.8
16,674
1,530
5.3%
Dresden/Leipzig/Halle
1,149
788
3.0%
56
6.1
13,757
1,458
4.9%
Mannheim/KL/Frankfurt/Mainz
346
160
3.5%
18
9.2
2,793
2,159
5.1%
Nuremberg/Fürth/Munich
292
80
4.1%
11
12.5
1,430
3,666
3.9%
Hamburg/Bremen
340
227
4.6%
20
7.6
3,434
1,496
5.8%
London
1,723
181
2.8%
91
42.7
3,469
9,509
5.3%
Others
896
637
4.9%
52
7.2
10,876
1,407
5.8%
Development rights and new buildings
188
Total
8,629
3,832
3.8%
413
9.2
60,820
2,203
4.9%
(1)
Rental yield is calculated by dividing the Annualised net rent by the Investment property value,
excluding properties classified as development rights & invest. For more details please see page 175 of the Alternative Performance Measures section of this report
GRAND CITY PROPERTIES S.A.
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December 2023
Value (in €M)
Area (in k sqm)
EPRA vacancy
Annualised
net rent (in €M)
In-place rent
per sqm (in €)
Number of units
Value per sqm
(in €)
Rental yield
(1)
Berlin
1,939
625
4.3%
69
9.2
8,492
3,102
3.5%
NRW
1,790
1,193
4.3%
93
6.5
17,436
1,501
5.2%
Dresden/Leipzig/Halle
1,152
816
2.9%
56
5.9
13,997
1,412
4.9%
Mannheim/KL/Frankfurt/Mainz
389
177
3.5%
19
8.9
3,013
2,191
4.9%
Nuremberg/Fürth/Munich
289
80
6.2%
9
10.6
1,430
3,624
3.3%
Hamburg/Bremen
385
264
3.5%
22
7.1
3,996
1,457
5.7%
London
1,653
189
3.1%
84
37.9
3,549
8,757
5.1%
Others
881
676
4.5%
54
6.9
11,390
1,302
6.1%
Development rights and new buildings
151
Total
8,629
4,020
3.8%
406
8.6
63,303
2,109
4.8%
(1)
Rental yield is calculated by dividing the Annualised net rent by the Investment property value,
excluding properties classified as development rights & invest. For more details please see page 175 of the Alternative Performance Measures section of this report
Cologne
Bonn
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of the Berlin portfolio is located in top tier neighbourhoods:
Charlottenburg, Wilmersdorf, Mitte, Kreuzberg, Friedrichshain,
Lichtenberg, Neukölln, Schöneberg, Steglitz and Potsdam.
is well located primarily in Reinickendorf,
Treptow, Köpenick and Marzahn-Hellersdorf.
Berlin - GCP’s Largest Location
Quality locations in top tier Berlin neighborhoods
Mitte
Pankow
Reinickendorf
Spandau
Charlottenburg-
Wilmersdorf
Steglitz-
Zehlendorf
Tempelhof-
Schöneberg
Friedrichshain-
Kreuzberg
Neukölln
Treptow-
Köpenick
Marzahn-
Hellersdorf
Lichtenberg
Schönefeld
Teltow
70
%
30
%
December
2024
Value
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualised
net rent
(in €M)
In-place
rent per
sqm (in €)
Number
of units
Value
per sqm
(in €)
Rental
yield
Berlin
1,951
619
3.9%
73
9.8
8,387
3,150
3.7%
Largest city by population in Germany.
German capital and centre of national
political decision making.
Berlin is the leading start-up location in Germany,
attracting high quality, global talent.
Berlin continues to have the lowest
home ownership rate in Germany.
Chronic supply-demand imbalance with estimated
shortfall of over 100,000 apartments, which continues
to widen as new supply falls well short of demand.
*
Completion rates in residential construction remain considerably
below average at 71% in Berlin, thus driving up rental prices.
**
KEY DRIVERS
of GCP’s
portfolio
23
%
*
Senatsverwaltung für Stadtenwicklung, Bauen und Wohnen; Pestel Institut, Bauen und
Wohnen 2024 in Deutschland
**
Colliers Residential Market Germany 2024/2025
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3%
Marl
1%
Herne
1%
Mönchengladbach
3%
Bochum
3%
Gelsenkirchen
5%
Erkrath
4%
Solingen
17%
Others
10%
Duisburg
5%
Essen
7%
Wuppertal
28% COLOGNE
4th
largest city
in Germany
8%
Dortmund
5%
Bonn
December
2024
Value
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualised
net rent
(in €M)
In-place
rent per
sqm (in €)
Number
of units
Value
per sqm
(in €)
Rental
yield
NRW
1,744
1,140
4.4%
92
6.8
16,674
1,530
5.3%
Both the most populous and densely populated
state in Germany.
More than 24,000 international companies have
presence in the NRW region, that is around 20% of
all international investments in Germany.
Home to many of Germany’s leading companies,
of Germany's top 50 grossing corporations, 17 are
based in North Rhine-Westphalia.
Number 1 in the environmental economy across
Germany.
Industrial center of Germany contributing around
one-fiſth of the GDP of Germany, and 4.5% of the
EU’s GDP.
KEY DRIVERS
The portfolio distribution in NRW is focused on cities with strong fundamentals within the
region. 28% of the NRW portfolio is located in Cologne, the largest city in NRW, 10% in
Duisburg, 8% in Dortmund, 7% in Wuppertal, 5% in Essen, and 5% in Bonn.
North Rhine-Westphalia (NRW)
Well positioned in the largest metropolitan area in Germany
of GCP’s
portfolio
21
%
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1.
Cologne
2.
Duisburg
3.
Dortmund
4.
Essen
5.
Wuppertal
6.
Bonn
7.
Erkrath
8.
Gelsenkirchen
9.
Solingen
10.
Bochum
11.
Marl
12.
Herne
13.
Mönchengladbach
300 - 1.000
150 - 300
100 - 150
1000 - 4.790
* Based on data from Statistiches Bundesamt
Dense and diversified transport
and logistics network:
•
Densest rail network in Germany with about 6,000 kilometers
of tracks.
•
Well connected to global maritime trade through 120 ports
which include the world's largest inland port in Duisburg.
•
Well connected to global air travel with two major
international airports (Düsseldorf Airport and Cologne Bonn
Airport) and three other airports (Dortmund, Münster/
Osnabrück, Paderborn/Lippstadt and Weeze/Niederrhein)
which connect the region to all major domestic destinations as
well as many international cities.
•
More than 2,200 km of highways and 17,600 km of federal and
provincial roads that seamlessly link into the wider European
interstate road network.
Population Density In NRW
3
11
4
2
5
7
9
1
13
12
8
10
6
Source: nrw.Global Business
Hillingdon
Harrow
Ealing
Hounslow
Richmond
upon
Thames
Kingston
upon
Thames
Merton
Wandsworth
Sutton
Croydon
Bromley
Lambeth
Southwark
Lewisham
Greenwich
Bexley
Havering
Barking and
Dagenham
Redbridge
Newham
Tower
Hamlets
Waltham
Forest
Hackney
Isling-
ton
Camden
City
Westminster
Brent
Barnet
Enfield
Haringey
Hammersmith and
Fulham
Kensington and
Chelsea
December
2024
Value
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualised
net rent
(in €M)
In-place
rent per
sqm (in €)
Number
of units
Value
per sqm
(in €)
Rental
yield
London
1,723
181
2.8%
91
42.7
3,469
9,509
5.3%
KEY DRIVERS DRIVING
INCREASED LETTING DEMAND
London Portfolio
Located in strong middle class neighborhoods
of GCP’s
portfolio
20
%
The total London portfolio, including high quality assets, social housing as well as pre-
marketed units, amounts to approx. 3,600 units and approx. €1.8 billion in value.
Approximately 80% of the portfolio is situated within a short walking distance to an
underground/overground station.
The map represents over 90% of the London Portfolio.
Zone 1
Zone 2
Zone 3
Zone 4
Zone 5
Zone 6
underground station
overground/train station
asset location
airport
Large number of higher education universities
including some of the oldest and world-famous
colleges resulting in access to high quality talent.
Positive demographic fundamentals with a very high
population density and a low median age.
Leading fintech hub with strengths in areas for growth
potential such as blockchain, digital banking and
alternative lending among others.
London’s robust job market attracts individuals seeking
employment, thereby increasing demand for rental
accommodations. The city’s economic opportunities
continue to draw a diverse workforce, sustaining high
rental demand.
Leaner regulatory environment provides faster
repositioning turnaround times and ability to achieve
market rent potential.
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Quality East Portfolio
Located in the growing and dynamic cities of Dresden, Leipzig and Halle
December
2024
Value
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualised
net rent
(in €M)
In-place
rent per
sqm (in €)
Number
of units
Value
per sqm
(in €)
Rental
yield
Dresden/
Leipzig/
Halle
1,149
788
3.0%
56
6.1
13,757
1,458
4.9%
KEY DRIVERS
of GCP’s
portfolio
14
%
47%
Leipzig
29%
Dresden
24%
Halle
Dresden is a leading hub for the technology
industry in Europe, with a strong presence in
semiconductors, communication technology,
and soſtware development.
University cities with a wide appeal attracting
students from around the world. Leipzig’s university,
founded in 1409, is one of Europe’s oldest.
Strong demographic fundamentals, with increasing
urbanisation over last decade and young population
compared to surrounding regions, with Leipzig
expected to be among the cities leading population
growth in Germany through 2030.
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LEIPZIG & DRESDEN
are the largest cities in
eastern Germany aſter Berlin
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December
2024
Value
(in €M)
Area
(in k sqm)
EPRA
vacancy
Annualised
net rent
(in €M)
In-place
rent per
sqm (in €)
Number
of units
Value
per sqm
(in €)
Rental
yield
Hamburg/
Bremen
340
227
4.6%
20
7.6
3,434
1,496
5.8%
KEY DRIVERS
of GCP’s
portfolio
4
%
Quality North Portfolio
The North portfolio is focused on the major urban centers of Hamburg and
Bremen – the largest cities in the north of Germany.
41%
Hamburg
59%
Bremen
Hamburg port is a leading driver of the
regional economy.
Hamburg is Germany’s 2
nd
largest city
by population.
Bremen's economic development, particularly
in sectors like logistics and manufacturing, has
created jobs and attracted workers, thereby
boosting rental demand.
Bremen’s ports are important logistical hubs
in Germany and much of Germany’s trade is
executed through the city’s ports.
Bremen is an industrial hub with a strong
connection to well-known local research institutes.
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21
Strong Financial Position
Conservative financial policy
GCP follows a financial policy in order to maintain and improve its strong
capital structure:
•
LTV limit at 45%
•
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 and bank loans
•
Dividend distribution of 75% of FFO I per share*
The Company has a conservative financial approach, maintaining a strong
liquidity position providing for valuable financial flexibility. The strong
liquidity position is reflected by €1.5 billion in cash and liquid assets at
year-end 2024.
GCP’s bank loans are spread across many loans from many different financial institutions.
In accordance with the Company’s conservative capital structure, as of December 2024
95% of its interest is hedged.
As part of GCP’s conservative financial policy, bonds issued in foreign currencies are
hedged to Euro until maturity.
Interest hedging structure
December 2024
0.3
%
Capped
* dividend distributions remain subject to market condition and AGM approval
4.9
%
Variable
94.8%
Fixed & Swapped
Interest
Hedging Ratio
95
%
GCP’s financial flexibility remains
strong over time due to its high
profitability, which is reflected in
consistently high debt cover ratios.
For the year of 2024, the Interest
Cover Ratio was 5.7x.
GCP holds an investment-grade credit ratings from both Standard & Poor’s
(S&P) and Moody’s Investors Service (Moody’s), with current long-term issuer
ratings of BBB+ (Negative) and Baa1 (Negative), respectively. Additionally, S&P
assigned GCP a short-term rating of A-2. Since 2021, Moody’s maintains its
public rating of GCP on an unsolicited basis.
Credit Rating
GCP strategically maintains its strong
financial profile characterised by long
debt maturities, high proportion of
hedged interest rates, excellent fi-
nancial coverage ratios, and a low
LTV. The LTV as of December 31,
2024 is at 33%, well below the ma-
nagement limit of 45%.
Loan-To-Value
Interest Cover Ratio
Low Leverage (Loan-To-Value)
45% Board of Director’s limit
ICR
Dec 2023
37%
Dec 2024
33%
Berlin
GRAND CITY PROPERTIES S.A.
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2024
5.7
x
5.6
x
2023
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23
An important component of GCP’s financial structure is a strong
diversification of funding sources, reducing the reliance on any single
source and resulting in a diversified financing mix. This is enabled by the
Company’s wide reach and proven track record in issuing instruments
across various capital markets: straight bonds, convertible bonds,
perpetual notes and equity capital. Moreover, GCP’s diversity is further
improved through issuances in various currencies, issuing straight bonds
in CHF, JPY and HKD. The nominal amount of all foreign currency issuances
are swapped into Euro until maturity. Issuances in various currencies
increase the investor base and provide expansion into a wider range of
markets to attract funding.
In addition, the Company maintains lasting relationships with dozens of
banks and financial institutions, providing for access to bank financing.
Dec 2023
Dec 2024
Bank debt
Straight bonds
Equity
Perpetual Notes
The Company maintains as part of its conservative financial policy
a high proportion of unencumbered assets to provide additional
financial flexibility and contribute to a strong credit profile,
with €6.4 billion in unencumbered assets as of December 2024,
representing 73% of the total portfolio value.
Unencumbered Assets
Financing Sources Mix
€6.6
BN
€6.4 BN
Dec 2023
Dec 2024
75
%
of value
73
%
of value
9
%
9
%
55%
54%
36
%
37
%
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Company Strategy
and Business Model
TAKE
OVER
01
02
03
04
05
06
Repositioning + Capex
Increase: Rent + occupancy.
Decrease operating costs and non-recoverable costs.
Improve tenant satisfaction.
Centralised IT/soſtware.
Capital recycling through disposals
and channeling proceeds into quality
properties and/or debt repayments.
Yield & Value increase.
Deal-sourcing network
established since 2004.
Due Diligence & negotiation
of best possible deal terms.
Acquisition.
Focus on long term hold
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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Focus on extracting value-add potential in attractive, densely populated regions,
while keeping a conservative financial policy and investment-grade rating
GCP’s investment focus is on the German and London residential markets that it perceives to
benefit from favourable fundamentals that will support stable profit and growth opportunities
for the foreseeable future. The Group’s current portfolio is predominantly focused on Berlin,
North Rhine-Westphalia, the metropolitan regions of Leipzig, Dresden and Halle and London,
as well as other major cities and urban centers in Germany.
The Company follows a selective
acquisition criteria and benefits from internal growth potential from the acquisitions of high
cash flow generating and under-rented properties with upside potential.
Cash flow improvements through focus on rental income and cost discipline
GCP seeks to maximise cash flows from its portfolio through the effective management
of its assets by increasing rent, occupancy, and cost efficiency. This process is initiated
during the due diligence phase of each acquisition, through the development of a specific
plan for each asset. Once taken over, and the initial business plan is realised, GCP regularly
assesses the merits of ongoing improvements to its properties to further enhance the
yield on its portfolio by increasing the quality and appearance of the properties, raising
rents and further increasing occupancy. GCP also applies significant scrutiny to its costs,
systematically reviewing ways to increase efficiency and thus increase cash flows.
Taking into account sustainability matters, understanding the interest of key
stakeholders and maximise tenant satisfaction
GCP’s strategy and business model take into account the varied interests and viewpoints
of its stakeholders, including its valued employees, tenants, local communities and
municipalities in which GCP operates, suppliers and business partners, and investors,
and constitutes a significant aspect of its approach for achieving sustainable growth.
GCP understands that the support of its stakeholders is crucial for executing its strategic
goals. Therefore, for understanding and addressing the needs and concerns of these
stakeholders, ongoing communication, active engagement, and a commitment to ethical
business practices are required. Regular feedback mechanisms, community involvement,
and a proactive approach to problem-solving contribute to building trust and long-
lasting relationships with all stakeholders. These practices are integrated throughout the
business operations to guarantee that the concerns and interests of stakeholders are
acknowledged and addressed. GCP’s upstream value chain consists of its investors, its
construction and development partners, and its suppliers. GCP takes the next position
in its value chain, with its employees, tenants and local communities and municipalities
making up its downstream value chain. More information on GCP’s value chain can be
found under SBM 1 - Strategy, Business Model and Value chain section of the consolidated
sustainability statement, on page 51-52. GCP’s business strategy takes also 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, GCP adapts its strategy and underlying processes
where necessary to reflect the impacts and importance of its material sustainability topics.
Tenant satisfaction is also a key pillar of GCP’s strategy and helps explain the Company’s
success since its foundation. GCP primarily meets customer service requests in two
different ways. Firstly, through the GCP service center, customer care agents individualise
solutions for each tenant and provide support in several different languages. Tenants
are ensured prompt responses to queries and can expect to hear back within a maximum
timeframe of 24 hours. Furthermore, urgent requests are taken care of within a time
frame of under an hour. The GCP service center has received independent validation for its
performance and quality. TÜV Nord recertified the center for ‘service quality’ in 2024, and
TÜV Hessen certified it for ISO 9001:2015, recognizing its quality management system.
Another key point of contact for tenants is the GCP tenant app, developed to streamline
and digitalize various processes, contributing to improved tenant satisfaction. The app
provides tools for prospective and current tenants, such as apartment searches, and
submitting service or maintenance requests. Tenants can also track the status of their
requests and receive updates, enhancing process transparency. The app’s functionality is
continuously improved with features like direct communication for tenant notifications,
rent reminders, and consultation scheduling. The number of app downloads in 2024 went
up by 21% compared to 2023, and we registered an average of 2000 new registrations
every month on the app in 2024. These updates have encouraged more tenants to use
digital channels, with the proportion of tenants contacting the Company through the app,
chat, or email increasing from 37% in 2023 to 44% in 2024. Additionally, the Company
has introduced a tenant loyalty program that allows tenants to earn points for timely rent
payments, rental duration, active green electricity contracts, and participation in specific
activities and programs. The tenants can redeem their points on their tenant account.
The Company focuses on improving the quality of life and environment for its tenants
through various initiatives. GCP aims to foster a sense of community among tenants
by installing playgrounds, enhancing property accessibility, organizing family-oriented
events, and supporting local associations, among other efforts. Regular tenant events
include activities such as Santa Claus celebrations during Christmas and the “GCP
GRAND CITY PROPERTIES S.A.
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Cinema Summer Festival” held in 2024. Additionally, the Company has taken steps to
provide study areas for children, support local organizations that encourage creativity,
and arrange youth programs, mother-baby groups, and senior citizen gatherings to
create a welcoming and inclusive community environment. Through its foundation, GCP
supports social projects across Germany, including providing an ambulance and two cold
buses in Berlin during the 2024/2025 winter season to assist homeless and vulnerable
individuals. The Company also collaborates with local authorities to identify opportunities
for improving community infrastructure, contributing to a better living environment and
making neighbourhoods more attractive.
Operations supported by centralised IT/soſtware
The Group’s integrated centralised IT/software plays a significant role in enabling GCP to
achieve its efficiency objectives. The key to this system is the detailed information that
it provides not only on the portfolio but also on existing and prospective tenants, which
staff can access on and off the road. This all-encompassing data processing enables the
Group to track and respond to market rent trends, spot opportunities for rent increases,
and manage re-letting risks on a daily basis. Implementation of digital processes for
letting activities allow for paperless signing of leases, improving the speed and efficiency
of the letting process for GCP and tenants while integrated service request through GCP’s
tenancy app improve the efficiency and transparency of maintenance and service requests
for tenants. GCP’s IT/software provides management with the detailed information
necessary to monitor everything from costs to staff performance.
London
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Investor relations activities supporting the strong
capital markets position
The Company continues to proactively present its business strategy
and thus enhance perception, as well as awareness, of the Company
among capital market investors. GCP seizes opportunities to present a
platform for open dialogue, meeting hundreds of investors in dozens
of conferences around the globe as well as hosting investors at the
Company’s offices or via video conferences. The improved perception
leads to a better understanding of GCP’s business model, operating
platform and competitive advantage, and leads to strong confidence
from investors. GCP’s strong position in equity capital markets
is reflected through its membership in key stock market indices,
including the SDAX of the Deutsche Börse, the FTSE EPRA/NAREIT
Global Index series and GPR 250.
Capital Markets
Placement
Frankfurt Stock Exchange
Market segment
Prime Standard
First listing
Q2 2012
Number of shares
(as of 31 December 2024)
176,187,899
ordinary shares
with a par value of
EUR 0.10 per share
Number of shares, excluding
suspended voting rights, base
for KPI calculations
(as of 31 December 2024)
176,097,559
ordinary shares
with a par value of
EUR 0.10 per share
Shareholder structure
(as of December 2024)
Freefloat
38%
Edolaxia Group
62%
Nominal share capital
(as of 31 December 2024)
17,618,789.90 EUR
ISIN
LU0775917882
WKN
A1JXCV
Symbol
GYC
Key index memberships
SDAX
FTSE EPRA/NAREIT Index Series
GPR 250
Market capitalisation
(as of 14 March 2025)
1.7 bn EUR
GRAND CITY PROPERTIES S.A.
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Vast and proven track record in capital markets
The Company has established over the years an impressive track record in capital markets,
continuously accessing various markets through its strong relationships with leading
investment banks in the market, supported by two investment-grade credit ratings (BBB+
Negative from S&P and Baa1 from Moody’s). Since 2012, GCP has issued approx. €10 billion
through dozens of issuances of straight bonds, convertible bonds, equity and perpetual
notes. The Company launched an EMTN programme, providing significant convenience and
flexibility by enabling the issuance in a short of time of financial instruments of various
kinds, sizes, currencies and maturities.
Analyst coverage
GCP’s shares are covered by several different equity research analysts on an ongoing basis,
who regularly publish updated equity research reports.
Analyst recommendations
19.7
18.0
15.7
15.4
14.5
14.5
13.9
13.5
13
12.5
12.5
12.2
12
11.5
11.5
Goldman Sachs
09.12.2024
First Berlin
15.11.2024
DZ Bank
14.08.2024
Kepler Cheuvreux
09.01.2025
Berenberg
17.02.2025
Oddo BHF
07.01.2025
Bernstein
18.12.2024
HSBC
30.01.2025
Deutsche Bank
25.11.2024
Barclays
14.11.2024
Jefferies
06.01.2025
Kempen & co
13.01.2025
UBS
10.02.2025
Bank of America
14.01.2025
Citigroup
14.11.2024
in €
30
25
20
15
10
5
0
2022
2023
2024
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
issue price €2.75
Grand City Properties
359%
SDAX
(rebased) 220%
FTSE EPRA/NAREIT Germany
(rebased) 80%
Share price performance and total return
comparison since first equity placement (19.07.2012)
GRAND CITY PROPERTIES S.A.
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2025
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Corporate Governance Statement
GCP emphasizes the importance of corporate governance with a high standard
of transparency, executed by the Board of Directors, which includes a majority of
independent directors, and the Company’s management. The Company focuses its efforts
in maintaining the trust it receives from its shareholders and bondholders. GCP is proud
of the high confidence of its investors, which is reflected in the successful placement of
funds by major global investment banks. GCP’s shares and bonds are regularly placed with
international leading institutional investors, major global investment and sovereign funds.
In order to maintain corporate governance and transparency standards, the Board of
Directors has implemented an Advisory Board, a Risk Committee, an Audit Committee, a
Nomination Committee, a Remuneration Committee and an ESG Committee.
Furthermore, the Company ensures that its Board of Directors and its senior executives
have vast experience and skills in the areas relevant to its business.
The Company has Codes of Conduct, one of which apply to business partnerships and
one to its employees. The Code of Conduct for Employees addresses issues related to
corruption, bribery, human rights abuse as well as discrimination. The Employee Code
of Conduct also sets out a reporting framework for any violations. Additionally, it also
provides for investigations and disciplinary measures as may be required in case of
violations. The Employee Code of Conduct has been updated with a focus on improved
transparency in its reporting lines, which are now supported by the Compliance
Department and the whistleblower system. In addition, GCP has a Diversity Policy.
GCP's diversity 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 organisation. The policy is accessible to all
employees via the Company's website and intranet. The policy outlines specific goals and
measurable objectives to track progress in diversity and inclusion. 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. GCP
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. Good
progress has been made in strengthening the number of women in leadership. In 2024,
women held 42.4% of management positions across the Group, compared to 43% in 2023.
As of December 31, 2024, women held two of the five positions on the Board of Directors.
The Company is not subject to any compulsory corporate governance code of conduct or
respective statutory legal provisions. In particular, the Company is currently not required to
adhere to the “Ten Principles of Corporate Governance” of the Luxembourg Stock Exchange
or to the German corporate governance regime, the latter of which are only applicable to
listed companies incorporated in Germany, apart from 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). The Company
has therefore issued a declaration that it does not deviate from the aforementioned
recommendations of the German Corporate Governance Code. In general, the Company
already complies with most of the principles and continues to take steps to implement
environmental, social and corporate governance best practices throughout its business.
Annual General Meeting
The Annual General Meeting of the shareholders of Grand City Properties S.A. (“AGM”)
was held on June 26, 2024 in Luxembourg. All of the 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 AGM for 2025 is intended to take place on June 24, 2025, in Luxembourg.
Compliance, Code of Conduct And Data Protection
The Company considers reputational risk as a significant risk and has therefore incorporated
a high degree of compliance with statutory laws as well as Company guidelines into the
corporate management and culture. Employees are provided with initial as well as on-
going training related to issues connected with the Code of Conduct for Employees. The
Company’s compliance and risk management framework includes the corresponding
internal audit procedures and covers all areas of the business including acquisitions, asset
management, administrative and operative functions.
Internally, the Company’s Code of Conduct for Employees is a mandatory component for
all employment contracts and includes policies such as the Anti-Corruption Policy, Anti-
Discrimination Policy, the Whistleblowing Policy, the Data Protection Policy. Externally, business
GRAND CITY PROPERTIES S.A.
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Board of Directors' Report - the Company & Portfolio
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partners are required to adhere to the strict Code of Conduct for Business Partners. This Code
of Conduct for Business Partners lays out the legal and ethical framework to be followed and
includes references to a number of important issues such as prohibition of corruption and bribery,
health and safety of employees, environmental protection, money laundering practices, respect
of human rights of employees, prevention of child labour as well as forced labour, data protection
and recognition of employees’ rights pertaining to freedom of association.
The Company´s Code of Conduct for Employees includes the prohibition of insider dealing.
The Company is subject to several obligations under Regulation (EU) No. 596/2014 (Market
Abuse Regulation, “MAR”), as amended. Therefore, it has set up a Company´s insider
register and a process to ensure that persons on such list acknowledge their duties and are
aware of sanctions. The Company notifies pursuant to Article 19 para. 5 subpara. 1 sentence
1 of MAR all person discharging managerial responsibilities of their obligations in the context
of managers’ transactions. Memorandums, trainings for directors and managers, as well as
information are distributed.
One of the Company’s important objectives has been to ensure the best possible protection
of personal data from manipulation or abuse. In this regard, the company utilizes various
modern technologies with high standards of data privacy. At the same time, staff are
trained on the topic of data protection through video training modules as well as seminars
with legal experts. Displaying its proactive nature, the Company has also prepared clearly
communicated standard operating procedures (SOPs) which assist all stakeholders in their
daily operations involving data as well as ensure the effective protection of data.
Board of Directors
The Company is administered by a Board of Directors that is vested with the powers to
perform and manage in the Company’s best interests.
The Board of Directors represents the shareholders as a whole and makes decisions solely
in the Company’s best interests and independently of any conflicts of interest. The Board
of Directors and senior management regularly evaluate the effective fulfilment of their
remit and compliance with strong corporate governance standards. This evaluation is also
performed by the Audit Committee and the Risk Committee.
The members of the Board of Directors are elected by the shareholders at the AGM for a
term not exceeding six years and are eligible for re-election aſter such term. The directors
may be dismissed with or without any cause at any time and at the sole discretion of the
shareholders at the Annual General Meeting.
The Board of Directors, a majority of whom are independent, resolves on matters on the basis
of a simple majority, in accordance with the Company’s articles of association. The Board of
Directors chooses amongst the directors a chairperson who shall have a casting vote.
For the AGM in 2024, the Board resolved to nominate Mr. Scot Wardlaw and Ms. Monica
Porfilio as independent members of the Board of Directors of the Company. These
nominations were subsequently approved by the AGM. Their mandates will automatically
expire on the date of the AGM of the shareholders of the Company to be held in 2025.
The renewal of the mandate of Mr. Markus Leininger as independent director was approved
at the AGM in 2023 until the AGM in 2025.
The renewal of the mandate of Mr. Christian Windfuhr as executive member of the Board
of Directors was approved in the AGM in 2023 until the AGM in 2025.
For the AGM in 2024, the Board resolved to nominate Ms. Simone Runge-Brandner as a
non-executive member of the Board of Directors of the Company. This nomination was
subsequently approved by the AGM. This mandate will automatically expire on the date of
the AGM of the shareholders of the Company to be held in 2025.
Members of The Board of Directors
CEO
The Board of Directors resolved to delegate the daily management of the Company to Mr.
Refael Zamir, as Daily Manager (administrateur-délégué) of the Company since October
2020, under the endorsed denomination (Zusatzbezeichnung) Chief Executive Officer (CEO).
CFO
The Board of Directors resolved to delegate the daily management of the Company to Mr.
Idan Hadad as Daily Manager (administrateur-délégué) of the Company since January 2023
under the endorsed denomination (Zusatzbezeichnung) Chief Financial Officer (CFO).
Name
Position
Mr. Christian Windfuhr
Director, Chairperson
Ms. Simone Runge-Brandner
Non-executive Director
Mr. Markus Leininger
Independent Director
Mr. Scot Wardlaw
Independent Director
Ms. Monica Porfilio
Independent Director
GRAND CITY PROPERTIES S.A.
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Board of Directors' Report - the Company & Portfolio
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Advisory Board
The Board of Directors has established an Advisory Board to provide expert advice and
assistance to the Board of Directors. 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 Luxembourg law or the
articles of incorporation of the Company but has rules of procedure adopted by the Board of
Directors. The Advisory Board and its members are an important source of guidance for the
Board of Directors when making strategic decisions.
Audit Committee
The Board of Directors has established an Audit Committee and decides on the composition,
tasks and term of the Audit Committee as well as the appointment and dismissal of its
members. The Audit Committee shall be composed of at least two members who shall be
independent non-executive directors. The responsibilities of the Audit Committee relate to
the integrity of the annual accounts and the consolidated financial statements, including
reporting to the Board of Directors on its activities and the adequacy of internal systems
controlling the financial reporting processes and monitoring the accounting processes.
The Audit Committee provides guidance to the Board of Directors on the auditing of
the annual accounts and the consolidated financial statements of the Company 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.
Risk Committee and Chief Risk Officer
The Board of Directors has established a Risk Committee to assist and provide expert advice
to the Board of Directors in fulfilling its oversight responsibilities relating to the different
types of risks to which the Company is exposed, recommend a risk management structure
including its organization and processes, as well as assess and monitor effectiveness of
the overall risk management to ensure that main risks are properly identified.
The Risk Committee shall be composed of at least two members of the Board, of which
at least half shall be independent, and is supported by the Risk Officer. The Risk Officer’s
responsibilities are determined and monitored by the Risk Committee and are guided by
the Risk Committee as part of its oversight role pursuant to the Rules of Procedure of
the Risk Committee, with the objective of bringing a systematic and disciplined approach
to evaluate and improve the culture, capabilities, and practices integrated with strategy-
setting and execution.
The Risk Committee provides advice on actions of compliance, in particular by reviewing
the Company’s procedures for detecting risk, the effectiveness of the Company’s risk
management and internal control systems and by assessing the scope and effectiveness of
the systems established by the management to identify, assess and monitor risks.
Remuneration Committee
The Board of Directors has established a Remuneration Committee. The Remuneration
Committee shall submit to the Board recommendation regarding the remuneration of
executive managers to the Board, ensuring that these proposals are in accordance with the
remuneration policy adopted by the Company and the performance of the persons concerned.
To that end, the Remuneration Committee shall be informed of the total remuneration paid
to each member of the executive management by other companies affiliated with the Group.
Nomination Committee
The Board of Directors has established a Nomination Committee. For significant positions
to be filled, the Nomination Committee will make an evaluation of the existing and required
skills, knowledge and experience. Based on this assessment, a description of the role,
together with the skills, knowledge and experience required shall be drawn up. As such,
the Nomination Committee shall act in the best interests of the Company, and among
others, prepare plans for succession of Directors, evaluate existing and required skills,
knowledge, and experience, consider proposals from shareholders, the Board and executive
management, and recommend candidates to the Board of Directors.
ESG Committee
The Board of Directors 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 shall be composed by at least two members
of the Board. The chairperson of the Committee shall be independent.
Internal Controls and Risk Management Systems
The Company closely monitors and manages potential risks and sets appropriate measures in order
to mitigate the occurrence of possible failures to a minimum. The risk management is led by the Risk
Committee, which constructs the risk management structure, organization and processes. The Risk
Committee monitors the effectiveness of risk management functions throughout the organization,
ensures that infrastructure, resources and systems are in place for risk management and are adequate
to maintain a satisfactory level of risk management discipline. The Company categorizes the risk
management systems into two main categories: internal risk mitigation and external risk mitigation.
GRAND CITY PROPERTIES S.A.
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Internal Risk Mitigation
Internal controls are constructed from five main elements:
•
Risk assessment
– set by the Risk Committee, supported by the Risk Officer, and
guided by an ongoing analysis of the organizational structure and by identifying
potential weaknesses.
•
Control discipline
– based on the organizational structure and supported by employee
and management commitments. The discipline is erected on the foundations of
integrity and ethical values.
•
Control features
– the Company sets physical controls, compliance checks and
verifications such as cross departmental checks. Grand City Properties S.A. puts
strong emphasis on separation of duties, as approval and payments are done by at
least two separate parties. Payment verification is cross checked and confirmed with
budget and the contract. 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 Company 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 management places significant value 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.
Future expenditures on ESG matters and opportunities are included in the financial budget.
External Risk Mitigation
Through ordinary course of business, the Company is exposed to various external risks.
The Risk Committee is constantly determining whether the 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 volatility of interest risks, liquidity risks,
credit risk, regulatory and legal risks, collection and tenant deficiencies, the need for
unexpected capital investments and market downturn risk.
The Company sets direct and specific guidelines and boundaries to mitigate and address
each risk, hedging and reducing to a minimum the occurrence of failure or potential default.
For information regarding the external risks please see note 24 to the accompanying
annual accounts.
Shareholders’ Rights
The Company 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 and are also available in a specific section on
the Company’s website. The Company discloses its share ownership and additionally discloses
any shareholder position above 5% when it is informed by the respective shareholder. Shares
held and/or acquired by the Company, either directly or through subsidiaries, pursuant to its
buy-back program (currently inactive), are suspended from their voting rights.
The shareholders of Grand City Properties S.A. exercise their voting rights at each
General Meeting of the shareholders, whereby each share is granted one vote. The AGM
of the shareholders takes place within 6 months aſter the end of the financial year at
the registered office of the Company, or at such other place as may be specified in the
notice of the meeting. At the AGM of the shareholders the Board of Directors presents,
among others, the management report as well as the statutory and consolidated financial
statements to the shareholders.
The AGM resolves, among others, on the statutory and consolidated financial statements of
Grand City Properties S.A., the allocation of the statutory financial results, the appointment
of the approved independent auditor, and the discharge to the (re-)election of the members
of the Board of Directors. The convening notice for the AGM of the shareholders contains the
agenda and is publicly announced in the Recueil électronique des sociétés et associations in
Luxembourg (RESA), in a Luxembourg newspaper and on the Company’s website at least
thirty days before the AGM and in accordance with applicable Luxembourg law.
Compliance To The Transparency Law
The Company is in line with the Transparency Law (as defined below) and in particular in
relation to the disclosure requirements i.e. disclosure to the public of regulated information
within the meaning of article 1 (10) (the “Regulated Information”) of the Transparency Law.
The Company provides public equal and timely access to such Regulated Information and
fulfils the complex disclosure obligations. The quarterly and annual financial reports and
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 the organisation, its management and upcoming and past shareholder
meetings, such as its AGMs. 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.
GRAND CITY PROPERTIES S.A.
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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 on page 27, in the table below, and note 17 on pages
221-223 of this annual report. In addition, the Company’s shareholding structure
showing each shareholder owning 5% or more of the Company’s share capital is
available on page 27 of this annual report, in the table below and on the Company’s
website, where the shareholding structure is updated 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 Company’s
articles of association (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, as of 31 December 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 of the Articles of Association.
There are no special control rights attaching to the shares. The voting rights attached
to shares acquired by the Company, either directly or indirectly through subsidiaries,
pursuant to the buy-back-program are suspended.
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
223-224, note 18 of this 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 Luxembourg law of 11 January 2008 on
transparency requirements for issuers, as amended (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 liſted the moment the shareholder makes the notification.
g)
With regard to article 11 (1) (g) of the Takeover Law, as of 31 December 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 9 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 AGM 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 aſter
such term. 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 rules governing the appointment
and replacement of a member of the Board of Directors are set out in Articles of
Association of the Company.
According to article 18 of the Articles of Association, any amendment to the Articles
of Association made by the general meeting of shareholders shall be adopted with
a quorum and majority pursuant to article 450-3 of the law of 10 August 1915 on
commercial companies, as amended (the
“1915 Law”
).
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, Nomination Committee and an ESG Committee. Further
details on the powers of the Board are described on page 31-32 of this annual report.
According to article 5.1 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 authorised the Board, with the option to delegate, to buy-back,
either directly or through a subsidiary of the Company, shares of the Company for a
period of five (5) years not exceeding 20% of the aggregate nominal amount of the
Company’s issued share capital.
Shareholder name
Amount of Shares
1)
Percentage of voting rights
Edolaxia Group Ltd
2)
108,935,040
62%
1)
Total number of Grand City Properties S.A. shares as of 31 December 2024: 176,187,899
2)
Edolaxia Group Ltd is a wholly owned affiliated of Aroundtown SA
GRAND CITY PROPERTIES S.A.
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Board of Directors' Report - the Company & Portfolio
35
j)
With regard to article 11 (1) (j) of the Takeover Law, the Company’s perpetual notes,
bonds and security issuances under the EMTN programme (listed in notes 17.7 and
19.2 on pages 222-223 and 225-227) 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 aſter 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 takeover 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.
Duisburg
36
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
CONSOLIDATED
SUSTAINABILITY STATEMENT
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
37
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 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
sustainability statement
Grand City Properties S.A. (“GCP”, “the Company”, “the Group”) has assessed whether the
relevant sustainability topics are material. For any material topics identified, GCP 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 Statements have been prepared in a context of new
sustainability reporting standards requiring entity-specific and temporary interpretations
and addressing inherent measurement or evaluation uncertainties. GCP has decided to
apply the phase-in provisions in accordance with Appendix C of ESRS 1. GCP 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 THE CONSOLIDATED SUSTAINABILITY
STATEMENT
GCP 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 Company 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 GCP’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, while the ESG and Audit committees conduct a high-level review for quality
assurance and best practices in ESG reporting and also approve the final report, reinforcing the
governance structure supporting the sustainability reporting process.
Scope of Consolidation and Reporting Boundaries
The scope of consolidation for this Consolidated Sustainability Statement mirrors that of
GCP’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,
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
38
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 organisational
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 GCP’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
GCP’s financial consolidation scope have been exempted from individual or consolidated
sustainability reporting.
Additionally, the Consolidated Sustainability Statement extends beyond the Company’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.
•
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.
•
Downstream activities encompass consolidated reporting, investor relations, exit
strategies, asset sales, and interactions with real estate brokers.
The Company’s value chain also incorporates key suppliers, contractors, and service
providers, such as construction and maintenance personnel, who are required to
comply with GCP’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 Company
captures indirect environmental influences.
Disclosure of Intellectual Property and Developments under Negotiation
GCP 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 Company 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 GCP’s commitment to transparency in its ESG reporting.
BP-2 – DISCLOSURES IN RELATION TO SPECIFIC CIRCUMSTANCES
GCP 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 GCP’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.
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
39
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 is allocated to
tenants. Additionally, variations in tenant behaviour and energy use in common
areas are difficult to account for without accurate data. The Company allocates
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 Landlord-Obtained
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 Company can only rely on generalised
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
Landlord-Obtained Utility Consumption
subsection of section E1-6.
The Company 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 Company 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 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. Assumptions on future temperature
increases reflected in the climate factor 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 Landlord-Obtained Utility Consumption
subsection
of section E1-6.
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 temperature increases reflected in the climate
factor 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 Landlord-Obtained Utility Consumption subsection of section E1-6.
GRAND CITY PROPERTIES S.A.
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40
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
GCP received validation by an external body of its Information Security Management
System with a ISO 27001 certification, and our Customer Service Centre holds a TÜV
certification for both Quality Management and Service Quality.
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
GCP 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 recorded, as this information has no significant
business relevance.
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
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 Landlord-Obtained 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 Landlord-Obtained Utility
Consumption
subsection of
section E1-6
.
In the case of missing EPCs, EPC-estimated calculations are
conducted as described in the Estimation of
Landlord-Obtained
Utility Consumption
subsection of
section E1-6.
The proportions of estimated data are disclosed on Table 18
found in the discussion in E1-5,
Energy Consumption and Mix
.
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Adherence to Additional Sustainability Standards and Reporting Frameworks
In addition to the ESRS, GCP integrates information from other widely recognised
sustainability reporting frameworks and industry best practices. This ensures that
its Consolidated Sustainability Statement remains comprehensive and aligned with
stakeholder expectations. Specifically, GCP’s reporting incorporates:
•
The Sustainability Best Practices Recommendations (“sBPR”) of the European
Public
Real
Estate
Association
(“EPRA”),
which
provide
sector-specific
sustainability metrics relevant to real estate.
•
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
GCP’s Consolidated Sustainability Statement incorporates the following disclosure
requirements and data points from other sections in the Consolidated Annual Report
2024 of Grand City Properties:
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 GCP 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: 24-26
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: 24-26
GOV-1 – THE ROLE OF THE ADMINISTRATIVE, MANAGEMENT AND
SUPERVISORY BODIES
Composition of the Board of Directors
GCP is administered by a Board of Directors vested with the broadest powers to perform
and manage in the Company’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 Company.
As of 2024, the Board of GCP consists of one executive member, Mr. Christian Windfuhr,
who also serves as the Chairperson of the Board. In addition to the executive member,
the Board is composed of one non-executive director and three independent directors:
•
Ms. Simone Runge-Brandner (Non-Executive Director)
•
Mr. Markus Leininger (Independent Director)
•
Mr. Scot Wardlaw (Independent Director)
•
Ms. Monica Porfilio (Independent Director)
Employee and Workforce Representation
While GCP does not include direct employee representation within the Board,
structured mechanisms are in place to ensure employee engagement and input in
governance processes. These mechanisms are: employee feedback channels; compliance
ambassadors, HR roundtables, annual town hall meetings. These initiatives facilitate
continuous dialogue between management and employees, integrating workforce
perspectives into decision-making.
Board and Management Expertise
GCP executive management (“the Daily Management”) consists of two members who
are responsible for the daily management of the Company. In general, for a business
incorporated as a Luxembourg Société Anonyme, the daily managers are entrusted with
decisions and actions related to the day-to-day management of the business, to ensure
the company’s business performance. This function is a complementary role to the Board
of Directors.
(*)
https://www.grandcityproperties.com/about-us/corporate-governance
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The Daily Management team, responsible for GCP’s day-to-day operations, consists of:
•
Mr. Rafael Zamir (“CEO”): Extensive experience in real estate financial management,
particularly in Germany and the UK, GCP’s core markets.
•
Mr. Idan Hadad (“CFO”): Extensive experience in financial management, including
accounting and taxes, compliance and risk management, as well as cash and
budget management, payment controls and collection. His geographical expertise
is focused on Germany and the UK.
The Board of Directors is composed of five members who collectively oversee the
Company’s strategic direction:
•
Mr. Christian Windfuhr (Executive Director, Chairperson): Real estate expert with
extensive experience in the European market, particularly within residential, as
well as hotel and hospitality sector and has significant expertise in business
management and strategic planning, as well as in crisis and risk management.
•
Ms. Simone Runge-Brandner (Non-Executive Director): Strong background in
banking and finance with vast expertise in real estate, business management and
strategy in Europe.
•
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
governance and financial oversight. Led large-scale lending operations across
Central and Eastern Europe.
•
Mr. Scot Wardlaw (Independent Director): Vast experience working in the real
estate industry in Europe and other jurisdictions, including real estate finance,
business development and strategy and real estate asset management, in addition
to expertise in crisis and risk management and information technology.
•
Ms. Monica Porfilio (Independent Director): Strong background and expertise in
finance, business management and strategy alongside expert knowledge in crisis
and risk management within the Europe’s market.
As seen in the Board Competencies Matrix below, the outstanding areas of expertise of
our Board Members identified through a self-assessment questionnaire, include ‘real
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 Company. Further details on Board members’ academic and professional backgrounds
are available in the Management section of the
GCP website
.
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
Christian Windfuhr
Markus Leininger
Simone Runge Brander
Scot Wardlaw
Monica Porfilio
Basic
Proficient
Expert
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In addition, the Board of Directors established an Advisory Board to provide expert
advice and assistance to the Board of Directors. 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 Luxembourg
law or the articles of incorporation of the Company but applies rules adopted by the Board
of Directors. The Advisory Board is an important source of guidance for the Board of
Directors 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 Daily Management with regards to:
•
Gender Diversity:
The composition of the Board and Daily Management together
include 71% male (5 members) and 29% female (2 members). The Board itself
consists of five members, of whom three are male (60%) and two are female (40%).
•
Geographic Diversity:
Members bring perspectives from, Germany, Luxembourg,
the United States, Italy and other international real estate markets.
•
Expertise Diversity:
The Board collectively has experience in real estate operations,
ESG governance, accounting, legal compliance, and financial risk management.
•
Percentage Independent Members:
The percentage of independent members on
the Board is 60%, with three out of five members being independent and one a
non-executive director.
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 (AGM) prior to the publication of this report, the composition of the Board’s
committees was updated to include the following board members:
•
Audit Committee: Chair: Markus Leininger | Members: Simone Runge-Brandner,
Monica Porfilio
•
ESG Committee: Chair: Markus Leininger | Members: Christian Windfuhr, Monica Porfilio
•
Risk Committee: Chair: Markus Leininger | Members: Simone Runge-Brandner,
Scot Wardlaw
•
Nomination Committee: Chair: Markus Leininger | Members: Monica Porfilio, Scot Wardlaw
•
Remuneration Committee: Members: Markus Leininger, Simone Runge-Brandner,
Scot Wardlaw
Each Board committee’s responsibilities for sustainability oversight are defined in their
Rules of Procedure.
•
Audit Committee: Ensures financial integrity, risk management, and internal
control systems.
•
ESG Committee: Supervises ESG strategy, regulatory compliance, and sustainability
risk mitigation.
•
Risk Committee: Oversees the Company’s risk management framework, including
financial, operational, legal, and reputational risks.
•
Nomination Committee: Evaluates Board composition and succession planning.
•
Remuneration
Committee:
Aligns
executive
compensation
with
financial
performance and sustainability targets.
The Daily Management team, comprising the CEO and CFO, is tasked with implementing
Board-approved strategies and ensuring compliance with sustainability objectives.
Whereas the CEO oversees the alignment of operations with sustainability goals, the CFO
oversees impacts, risks and opportunities from a financial perspective. In addition, senior
management
(*)
in operational roles support the Daily Management in the implementation
of governance processes to manage and oversee impacts, risks and opportunities.
The Board 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 the committee. The CEO and CFO report
directly to the Board. The Head of Sustainability reports to the CEO and CFO but also
updates and informs the ESG Committee. The Chief Risk Officer reports to the Risk
Committee.
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): GCP’s Compliance Department oversees adherence to the Company’s
governance policies, mindful of 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): GCP’s Sustainability,
Energy, Operations, Construction, Compliance, Legal and 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 GCP’s assets and joint procedures regarding
energy efficiency projects and retrofit planning.
(*)
senior management refers to senior managers, such as heads of departments, that are not the Daily Management
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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 CEO and CFO are 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 oversee strategic guidance
on ESG topics and is responsible for reviewing and assessing GCPs 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, GCP’s Daily Management places significant emphasis on ensuring that
employees and senior positions possess the relevant skills and expertise in sustainability
matters, taking into account the Company’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 Company’s interests and their recommendation vis-à-
vis candidates is then shared with the Board. If necessary, tailored training programmes
– 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
company-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 Company’s decision-making processes. In addition to the Board,
the ESG Committee is a key body that provides dedicated sustainability expertise
within GCP’s governance structure. Next to the Board Members, the ESG Committee
also includes the Head of Sustainability, 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 GCP’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 organisation
to enhance ethical risk management and drive GCP’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 (IROs), including:
•
Climate change mitigation strategies, such as GHG emissions reduction, renewable
energy adoption, and energy efficiency improvements across GCP’s assets.
•
Corporate governance practices that uphold transparency, compliance, and ethical
conduct, thereby preventing risks related to mismanagement, bribery, corruption,
and ESG non-compliance.
•
Investor confidence and capital access, by ensuring that ESG performance aligns
with stakeholder expectations and regulatory frameworks.
•
Supplier relationship management, ensuring ESG due diligence is integrated into
procurement processes and business partner engagements.
•
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 GCP’s governance framework supports both financial and
ESG performance, fostering long-term operational resilience and stakeholder trust.
Christian Windfuhr
Executive Director, Chairman
Simone Runge-Brandner
Non-Executive Director
Markus Leininger
Independent Director
Scot Wardlaw
Independent Director
Monica Porfilio
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
•
Meets at least once a year on
ESG topics
•
Supervises the implementation
of sustainability programs
Daily Management
Board Members:
Markus Leininger (Chair), Christian Windfuhr, Monica Porfilio
Advisory Members:
Head of Sustainability, Head of Energy, Chief Operations
Officer, Group Head of HR
•
Meets at least twice a year
•
Strategic guidance on ESG
•
Responsible for reviewing ESG strategy
ESG Committee
ESG Governance Structure
•
Develops energy
and carbon reduction
strategy
•
Implements
and tracks energy
projects and progress
Energy
Department
•
Responsible for energy
efficiency improvements
•
Implements climate
adaptation solutions
•
Ensures health and
safety standards follow
national laws
Operations & Construction
Department
•
Responsible for
strict adherence to
compliance standards
•
Maintains level of fair
business relationships
with suppliers
Compliance Department
•
Responsible for
employee journey,
incl. well-being,
growth and
professional
development.
•
Implements diversity
and inclusion initiatives
HR Department
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 CEO, 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 merging
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, Daily Management receives quarterly updates from department
heads, including: the Head of Sustainability, Head of Human Resources, Head of Energy,
Head of Compliance. In addition to scheduled updates, the Daily Management 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 Daily Management 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 Company 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 results and in-depth
discussions on impacts, risks and opportunities:
Material Impacts:
•
Climate Mitigation and Energy Efficiency: internal processes for managing the
EPC (Energy Performance Certificate) Database. The aim was to optimise the
process of identifying and prioritising energy-inefficient assets for improvement
programmes.
•
Value chain impacts, particularly, the approval of an updated Human Rights Policy to
ensure compliance with labour standards in the Code of Conduct for Business Partners.
Material Risks:
•
Regulatory risk: Updates on the EU Energy Performance of Buildings Directive (EPBD)
and its potential impact on high-priority assets (EPC F, G, H-rated properties).
•
Transition risk: Strategies for energy improvement across high-priority assets, including
progress on ongoing energy audits and their alignment with GCP’s Transition Plan.
•
Climate risk: Ongoing physical and transition climate risk assessments affecting property
portfolios in Germany and the UK.
Material Opportunities:
•
Competitive Advantage in Energy Performance Improvements: Due to GCP’s scale,
expertise, and network, the Company is well-positioned compared to the overall
market in adapting to the requirements of the EPBD. This positioning provides a
competitive advantage and potential growth opportunities, as energy efficiency
regulations become more stringent.
•
Employee engagement initiatives: Launch of the “Activate the Base” Program,
which enables employees to develop and implement their own ESG projects.
•
Innovation and technology investment: GCP’s parent company, Aroundtown, has
launched the Accelerator Program, ATechX, from which GCP may profit. Developed
alongside venture capitals, ATechX recognise, 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, controlling
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
47
and valves and BMS AI. Together with these companies, GCP is running pilots for
energy optimization and savings potential.
•
Employer branding and talent attraction: GCP aims to strengthen its position
as a top employer in the residential real estate sector and has made significant
progress towards this goal in 2024.
•
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
GCP integrates sustainability-related performance metrics into its Remuneration Policy.
For details on GCP’s Remuneration Policy, please refer to the
Remuneration Policy
section on our Corporate Governance page. The incentive schemes at GCP are designed
with the following characteristics:
•
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.
•
Scope of Inclusion: The Remuneration Policy applies to directors and Daily
Management as defined in the below.
The Remuneration Policy includes two specific sustainability-related performance
targets as part of the incentive structure:
1.
Maintenance or improvement of ESG ratings
(*)
: GCP aims to maintain or improve
its score in at least key scoring criteria areas across its prioritised ESG ratings
compared to the previous financial year.
2.
Enhancement of the portfolio’s energy efficiency: The Company seeks to improve
the energy rating profile of its real estate portfolio, measured against the baseline
at the end of the previous financial year.
The Remuneration Policy, which outlines these sustainability-linked criteria, is formally
approved by the Board of Directors and subject to regular review.
Following the conclusion of each fiscal year, the Company 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 (the “2011 Law”), 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
Company’s website.
The terms of GCP’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 GCP’s strategic sustainability goals and adherence to
corporate governance best practices. The current Remuneration Policy underwent review
and approval by the Remuneration Committee, the Board of Directors and presentation
to shareholders at the 2024 Annual General Meeting (AGM) for a non-binding advisory
vote, where it received approval. As per section 7.2 of the Remuneration Policy, the policy
will be submitted to the AGM every four years, or earlier in the event of a material
change to the remuneration structure.
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 GCP participates in several such ratings
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
48
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 GCP’s sustainability reporting. The Company 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 GCP’s disclosures.
Framework for Risk Management and Internal Controls
GCP 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 Daily Management conducts an additional review before the
Audit Committee assesses the report and provides a recommendation to the Board of
Directors for final approval.
Beyond these procedural safeguards, GCP’s risk management and internal control
framework encompasses:
•
Integration with Enterprise Risk Management: Sustainability risks are embedded in
the Company’s broader risk management framework, ensuring that sustainability
considerations are treated with the same level of oversight as financial and
operational risks.
•
Governance Structure: Each department has designated individuals responsible
for their specific area, such as HR, Energy, and Compliance, ensuring clear
accountability in sustainability reporting.
•
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.
•
Digital Tools and Technology: GCP 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, GCP enhances the reliability of its sustainability disclosures and ensures
alignment with CSRD and ESRS requirements.
Risk Assessment Approach
To effectively manage sustainability risks, GCP employs a structured risk assessment
process that includes both qualitative and quantitative methodologies. The Company-
wide risk assessment classifies risks into strategic, operational, compliance, and
reporting categories, with prioritisation based on likelihood of occurrence and potential
impact. This approach allows GCP to determine which risks require immediate action,
ensuring that sustainability concerns are addressed in a timely and structured manner.
In addition, GCP conducts a Double Materiality Assessment (“DMA”) in accordance with
ESRS requirements. This ensures that sustainability risks are assessed not only in terms
of their financial impact on the Company 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 this, GCP conducts qualitative and quantitative
assessments, such as scenario analysis and data modelling which are used to evaluate
potential financial and operational implications of sustainability risks. By applying these
tools, GCP 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, GCP 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.
•
Mitigation: Internal controls are implemented by the Company 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. Subsequently, the sustainability report is submitted for
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.
•
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 GCP’s compliance and
sustainability departments as part of the departments’ ongoing responsibilities.
The Company 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.
•
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 Transparency: Limited visibility over ESG performance of suppliers and
contractors.
•
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 GCP’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 GCP’s internal processes, ensuring continuous improvement in sustainability
reporting and risk management.
•
Policy Adjustments: Findings inform strategic updates to sustainability-
linked and Human Rights-related policies, reinforcing their relevance and
effectiveness in alignment with our corporate values.
•
Operational Enhancements: Cross-functional collaboration between Energy,
Operations, and Compliance departments ensures the implementation of
targeted mitigation strategies.
•
Training Programs: Employee training curricula are regularly updated to
address identified knowledge gaps related to sustainability compliance.
•
Strategic Alignment: Sustainability risk assessments directly influence GCP’s
ESG strategy and annual sustainability objectives, reinforcing a proactive
approach to risk management.
•
Periodic Reporting and Board Oversight
To maintain accountability, GCP ensures that sustainability risk management findings
are regularly reported to its governing bodies. The Chief Risk Officer presents
sustainability risk findings to the risk assessment findings 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 Daily Management in regular but ad-hoc management meetings.
SBM-1 - STRATEGY, BUSINESS MODEL AND VALUE CHAIN
Business Model and Strategy in Relation to Sustainability
GCP is a leading residential real estate firm specialising in properties in densely populated
urban areas with strong and sustainable economic conditions and sustainable demographic
growth. GCP creates value by reducing vacancies, adjusting rents to market levels, improving
operational cost efficiency, increasing market visibility, and identifying high-return CapEx
investments. Additionally, the Company is leveraging its scale for greater efficiencies.
By implementing strategic energy-efficient measures, GCP strengthens the long-term
sustainability and resilience of its portfolio while enhancing operational performance thus
contributing to the reduction of CO
2
emissions and resource consumption.
Overview of Products and Services
GCP specialises in residential real estate, offering a well-balanced mix of affordable
housing with value-add opportunities in densely populated areas in Germany as well as
in the United Kingdom. Its portfolio is located mainly in Berlin, North Rhine-Westphalia,
Dresden, Leipzig, and Halle as well as in the United Kingdom.
The Company’s tenant services include affordable housing solutions with community-
focused amenities, as well as tenant digital services via the GCP app (for lease
management, service requests, and energy monitoring). Finally, GCP also focuses on
asset management, which includes among other targeted level of Capex investments
focused on the upgrading of its buildings including for energy efficiency and modern
living, thereby improving tenant living standards while enhancing energy performance.
Please see the Company Strategy and Business model section, in the Board of Directors
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Report for further details. In 2024, no additional products and services were added nor
were products and services removed.
Operating primarily in Germany and complemented by its portfolio in London, UK, GCP
caters to diverse customer groups: private tenants, such as individuals seeking affordable
urban housing, families, and professionals; public sector & social housing. A portion of GCP’s
portfolio includes social and subsidized housing in both Germany and the UK. As mentioned
above, GCP’s affordable housing model and its tenant-first approach are directly related to
sustainability matters and the Company’s business model and strategy.
Workforce Overview
The Daily Management and GCP’s workforce is primarily based in Germany and London,
with an additional management team in Luxembourg.
As of 31 December 2024, GCP employed 836 employees across its operational locations.
This figure includes:
•
Permanent Employees: 614 (73% of the total workforce).
•
Temporary Employees: 222 (27% of the total workforce).
•
Full-Time Employees: 744 (89% of the total workforce).
•
Part-Time Employees: 89 (11% of the total workforce).
•
Non-Guaranteed Hours Employees: 3 (0.4 % 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
GCP’s sustainability-related goals in terms of products and services focus on enhancing
environmental performance and addressing social priorities within its real estate portfolio
and company operations. More concretely this refers to switching to green energy
supply as well as the targeted upgrading of GCP’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. GCP generally sets targets on a
Company-level. However, there may be some geographical differences regarding energy
efficiency goals for example due to national laws in the Germany and the UK setting
higher standards for energy performance certificates than Germany.
The Company is also committed to providing affordable, appropriate-quality housing
in metropolitan areas, addressing critical social needs while maintaining strong tenant
satisfaction. Additionally, GCP prioritises strengthening relationships with tenants
and local communities by implementing enhanced engagement mechanisms and
targeted support programmes. These initiatives foster trust and collaboration, ensuring
stakeholder expectations are met while advancing GCP’s sustainability objectives.
Regarding the assessment of current significant products, services, markets and
customer groups for GCP and their relation to sustainability-related goals, it is clear
that GCP’s commitment to affordable, energy-efficient housing aligns with global
sustainability targets. Through technological innovation, green building upgrades, and
tenant-focused services, GCP ensures long-term environmental and social impact while
maintaining business profitability.
In the field of residential rental housing, GCP provides affordable housing solutions,
ensuring long-term tenant stability. Furthermore, and on a targeted basis, it upgrades
older buildings with energy-efficient renovations (e.g. insulation, heating system
modernization and heat pumps) and focuses on social and community well-being through
tenant engagement programs and donations by its Foundation. In the area of tenant
services & digitalization, GCP’s App & Tenant Portal enables paperless lease agreements,
online service requests, and energy monitoring. On a regular basis, GCP fosters sustainable
living awareness by educating tenants on energy conservation and incentivises lower
carbon footprint behaviours. The Company’s loyalty program & community engagement
promotes tenant well-being, reducing turnover rates and is strengthening communities.
GCP’s Asset Management integrates energy efficiency consideration into its operations.
The Company’s main impact on GHG emissions reduction stems from the transition to
green energy sources and efforts to optimise energy consumption. These actions align
with the Company’s sustainability goals: Climate Action (CO₂ Emissions Reduction Goal –
40% by 2030 vs. 2019 levels); Continue to offer affordable housing, ensuring inclusivity
and long-term social stability; Increased Energy Efficiency & Renewable Energy Use in
property management. For more information on this topic, please see: BP-2.
GCP integrates sustainability considerations into its core strategy, ensuring that its real
estate operations, investments, and tenant engagement align with ESG goals. Hence,
there are a number of elements of the strategy that relate to or impact sustainability
matters and are taken into consideration.
A key pillar of GCP’s sustainability approach is its commitment to energy-efficient real
estate. Furthermore, we have started investing in renewable energy solutions, such
as solar panel installations, to support its long-term decarbonisation strategy. Beyond
operational energy management, GCP integrates sustainability principles into its
construction and renovation practices. Where needed, the Company is retrofitting older
properties with enhanced insulation, energy-efficient windows, and modern heating
systems to ensure compliance with evolving energy regulations and tenant expectations.
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However, this transition 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 centres where modern energy solutions are more difficult to implement.
To address these challenges, GCP 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
GCP’s business model involves acquiring, modernising, and managing residential
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 the section “Company Strategy and Business” in the Board of
Directors’ report.
GCP’s inputs include capital investment in property acquisition and renovation, energy-
efficient materials, 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 housing units, including upgraded and
energy-efficient housing units, enhanced tenant services through digital platforms, and
improved stakeholder trust through transparent ESG reporting. Those outcomes benefit
tenants by providing improved living conditions, investors with stable returns, and
communities through sustainable urban development.
GCP’s value chain encompasses the wide range of activities that are integral to
the Company’s business model. It considers the Company’s strategy, the external
environment in which it operates, and all corresponding stakeholders. At a glance, GCP’s
value chain is made up of the following:
Upstream
1. Asset Acquisition
•
Deal Sourcing:
Evaluating and selecting assets on criteria such as location,
market trends, condition, and value-add, yield potential and alignment with
investment strategy.
•
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.
•
Financing Arrangements:
Securing appropriate financing to purchase or manage
assets.
2. Procurement of materials and services
•
1
st
tier:
Procurement of services, including but not limited to architectural
planning, engineering, energy auditing and general contracting.
•
2
nd
- 3
rd
tier:
Mainly material sourcing and construction material production.
Own operations
3. Property Management
•
Operational Management:
Day-to-day management of assets, including
overseeing building systems, repairs, and tenant services.
•
Tenant Relations:
Managing lease agreements, handling tenant inquiries, and
ensuring occupancy rates remain high.
•
Facility Management:
Ensuring that facilities are well-maintained, energy-
efficient, and compliant with regulations.
•
Service Contracts:
Outsourcing specific maintenance tasks (e.g., cleaning,
landscaping) to third-party service providers.
4. Asset Management
•
Performance Monitoring:
Tracking the financial performance of properties,
including rent collections, operating costs, and profitability.
•
Value Enhancement:
Identifying opportunities to enhance property values, such
as upgrading amenities, retrofit projects, and improve energy efficiency.
•
Cost Optimisation:
Reducing operational expenses while upholding property
standards, using strategic measures such as energy audits and purchasing
agreements.
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5. Marketing and Leasing
•
Asset Marketing:
Developing marketing strategies to attract and retain tenants.
•
Tenant Retention Programs:
Implementing programs to enhance tenant
satisfaction, such as community-engagement initiatives.
6. ESG, Compliance and Risk Management
•
Legal Compliance:
Ensuring adherence to safety regulations, residential tenancy
law, property taxes, and other legal obligations.
•
Health & Safety Management:
Implementing safety standards for tenants and
visitors, including fire safety, emergency planning, and regular inspections.
•
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
•
Refurbishment and asset improvements:
Upgrading, renovating, or modernising
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.
Downstream
8. Consolidated Reporting and Investor Relations
•
Financial and ESG Reporting:
Regularly providing financial and non-financial
statement to relevant stakeholders and the public, as well as analysing key
performance indicators (KPIs) that are relevant to operational, financial and
sustainability performance of the Company.
•
Investor Relations:
Managing relationships with investors, conveying the Company’s
strategy and performance, maintaining an open channel for communications.
9. Exit Strategies
•
Selling assets:
Capital recycling through the sales of assets.
•
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
GCP recognises that stakeholder engagement is fundamental to achieving its sustainability
and business objectives. By fostering transparency, inclusivity, and responsiveness, the
Company ensures that stakeholder insights inform its strategic direction, sustainability
initiatives, and operational improvements.
Stakeholder Engagement Approach
GCP’s stakeholder engagement process involves diverse mechanisms: surveys,
roundtables, direct consultations, a customer service centre 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 GCP’s sustainability objectives.
Key Stakeholders and Their Roles
GCP identifies its key stakeholder groups, reflecting their varying interests and interactions
with the Company. The listed below represent those groups identified in the DMA process:
•
Tenants: Tenants engaging with GCP properties and services, comprising primarily
residential households.
•
Employees: Employed staff of the Company.
•
Investors: Institutional investors, such as pension funds, asset managers and
sovereign funds, lending partners such as banks, and private persons, such as
retail shareholders, with financial stakes in GCP.
•
Local Communities: Neighbourhoods impacted by GCP’s property operations.
•
Suppliers and Contractors: Business partners providing materials, construction,
and maintenance services.
GCP categorises 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
Whereas the engagement coordination and oversight lie with the Sustainability
Department, individual GCP departments, such as Operations, Customer Service and
Communications, are involved in the actual organisation of stakeholder engagement
initiatives and mechanisms:
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•
Feedback provided by tenants throughout the year via GCP’s Customer Service Centre
and engagement between the Company’s other service agents and tenants directly.
•
Tenant and community events organized several times a year at our assets and
within the surrounding neighbourhoods.
•
Annual employee satisfaction surveys, as well as regular HR Roundtables.
•
Quarterly investor meetings, investor conferences and roadshows, annual general
meeting of shareholders, and financial disclosures.
•
Supplier evaluations and adherence to the Code of Conduct for Business Partners
through our Business Partner and Know-Your-Customer teams.
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 GCP 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, GCP enhances its sustainability goals through
informed and effective strategies.
Stakeholder engagement outcomes are continuously analysed and integrated into GCP’s
operations and strategic planning:
•
Tenant feedback provided to GCP’s Customer Service informs property upgrades
and service improvements, as well as tenant and community engagement.
•
Investor feedback shapes (ESG) disclosures and reporting practices.
•
Supplier assessments lead to enhanced due diligence and contract requirements.
While stakeholder feedback plays a crucial role in refining GCP’s practices, it has not led to
major amendments to the Company’s overall strategy or business model in recent years.
Stakeholder Views in Strategy and Business Model
GCP considers the interests and views of its key stakeholders in shaping its strategy
and business model. Tenants prioritise affordable housing, reliable services, and energy-
efficient properties, 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 emphasise social responsibility,
environmental stewardship, and local development. Suppliers emphasise working
conditions and reliable payments as their main interest. This stakeholder understanding
is integrated into GCP’s materiality assessments, guiding strategic decision-making and
sustainability initiatives.
Governance and Stakeholder Insights in Sustainability Decision-Making
The Board of Directors and the Daily Management are informed about the views and
interests of affected stakeholders with regard to the Company’s sustainability-related
impacts by the ESG Committee and the heads of department regarding specific topics in
their area of responsibility. Such information is included in meeting presentations to the
Board and the Daily Management. For example, the Sustainability Department presents
the outcome of the DMA, which is the assessment of the Company’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
(IROs) and to integrate these ESG considerations into our risk management framework,
GCP utilises the DMA process in alignment with the ESRS 1 section 3.
In 2024, GCP 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, categorised as:
•
Short-term time horizon (12 months)
•
Medium-term time horizon (1–5 years)
•
Long-term (>5 years)
Of the 40 topics assessed, four of them were found to be of either environmental, social
or governance impact, nine were found to be also financially material to the business,
framed under the following ESRS topics:
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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 as having the most
material impact on the environment and people and as having 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 GCP:
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 operations and
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 decarbonisation 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 GCP’s building portfolio and the fact that a large proportion of it is generated from fossil fuels, air pollution linked to fossil fuel combustion was also
identified as having a potential material negative impact on GCP’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 impact
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
treatment 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 GCP 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 labour market were identified as material to GCP’s business success. Material impacts, risks and opportunities related to GCP’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 GCP’s value chain includes contracting companies, suppliers and business partners and their staff, which are impacted in similar ways to GCP’s own workforce. Those workers
identified to have a higher negative impact were external construction workers.
Material GCP impacts to workers in GCP’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 GCP’s tenants and thus also to GCP’s business operations. Impacts, risks and opportunities linked
to our consumers and end users, that is our tenants, were identified as:
S3 Affected Communities
Access to affordable and high-quality housing continues to be a challenge particularly in large cities like Berlin. Investing in this area is one the cornerstones of GCP’s business strategy. In
the current reporting year material GCP impacts, risks and opportunities related to communities and its people in which GCP own and operate buildings were hence 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
Positive impact
Policies regarding working time and compliance with at least relevant legislation
Value chain (upstream)
Short-term / Long-term
Adequate wages
Positive impact
Policies on adequate wages and compliance with at least relevant legislation
Value chain (upstream)
Short-term / Long-term
Health and safety
Positive impact
Existence of Health and safety policies
Value chain (upstream)
Short-term / Long-term
Table 10
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
Table 9
ESRS Sub-topic
Sub-sub-topic
IRO Category
Description
Value Chain
Time Horizon
Communities’ economic,
social and cultural rights
Adequate
housing
Positive Impact
Adequate housing for communities affected by firm's assets and activities
Own operations and Value chain
(downstream)
Short-term / Long-term
Opportunity
Providing access to adequate housing to communities within scope of residential portfolio
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G1 Business Conduct
Material impacts, risks and opportunities linked to GCP’s business conduct, both upstream and downstream, were identified for this reporting year. They are:
Table 11
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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Materiality Matrix at Sub-Topic Level
Impact material
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
8.
Substances of concern
E3 Water & marine resources
11.
Water
E4 Biodiversity & ecosystems
13.
Direct impact drivers of
biodiversity loss
15.
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
GCP assesses the financial implications of material risks and opportunities by analysing
their impacts on the Company’s financial position, performance, and cash flows.
Climate-related risks directly influence the Company’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 GCP 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 Company’s ongoing efforts to align with sustainability goals.
Resilience of the Business Model and Strategy
GCP’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, GCP 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 – reputation.
IRO- 1 – DESCRIPTION OF THE PROCESSES TO IDENTIFY AND ASSESS
MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
GCP employs a structured and data-driven approach to identifying, assessing,
and managing sustainability-related impacts, risks, and opportunities (IROs). This
methodology integrates ESG considerations into the Company’s risk management
framework, ensuring a comprehensive and proactive response to evolving sustainability
challenges and opportunities.
Methodology for Identifying Impacts, Risks, and Opportunities
GCP conducts a Double Materiality Assessment (DMA), which evaluates sustainability
impacts, risks and opportunities across all business activities and the value chain, in
alignment with the ESRS 1 section 3. In 2024, GCP conducted a comprehensive DMA which
will be reviewed annually and updated 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
GCP’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 company’s business model and value chain, where
GCP 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 GCP’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 Company’s
commitment to people and the environment. GCP ensures that the outcomes of this process are
accessible, and capable of driving continuous improvement in sustainability practices.
GCP’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
labour 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 prioritises 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
GCP distinguishes between direct impacts (own operations) and indirect impacts
(business relationships):
•
Direct impacts: Arising from tenant interactions, such as housing adequacy
and data privacy risks. Managed through tenant service protocols and privacy
compliance measures.
•
Indirect impacts: Associated to supply chain labour conditions and contractor
environmental performance. Addressed through contractual obligations, as well
as the Business Partner Code of Conduct.
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 categorise 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 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
management to ensure they accurately reflect Company 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.
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GCP is currently reviewing its process for identifying, assessing, prioritising, 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 (EPC) to help identify vulnerabilities, and a structured approach to prioritising
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.
GCP 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 the Company’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, GCP 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:
•
Likelihood (historical data and future projections).
•
Magnitude (financial, reputational, and operational impact).
•
Nature (short-term vs. long-term, direct vs. indirect).
Sustainability-related risks are integrated into GCP’s enterprise risk management system,
ranking them alongside regulatory and operational risks.
•
Oversight by the Risk Committee, Sustainability Department, and Chief Risk Officer.
•
Combination of qualitative and quantitative risk assessments, with targeted
financial analysis for high-priority IROs.
•
Sustainability risks are incorporated into enterprise risk assessments.
•
Opportunities (e.g., renewable energy projects) are integrated into strategic planning.
•
Stakeholder feedback, market research, and industry tools.
Since last year, we have made two improvements to the way we conduct engagement.
These improvements are:
•
New digital tools for tenant feedback tracking.
•
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 Disclosures
Reference
Title
Page
Number
BP-1
General basis for preparation of the sustainability statement
37-38
BP-2
Disclosures in relation to specific circumstances
38-41
GOV-1
The role of the administrative, management and supervisory bodies
41-45
GOV-2
Information provided to and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
46-47
GOV-3
Integration of sustainability-related performance in incentive
schemes
47
GOV-4
Statement on due diligence
47
GOV-5
Risk management and internal controls over sustainability reporting
48-49
SBM-1
Strategy, business model and value chain
49-52
SBM-2
Interests and views of stakeholders
52-53
SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
53-59
IRO-1
Description of the process to identify and assess material impacts,
risks and opportunities
59-61
IRO-2
Disclosure Requirements in ESRS covered by the undertaking’s
sustainability statement
62-64
List of data points that derive from other EU legislation and
information on their location in sustainability statement
143-145
E1 Climate Change
Reference
Title
Page
Number
E.1GOV-3
Integration of sustainability-related performance in incentive schemes
66
E1-1
Transition plan for climate change mitigation
66-69
EU Taxonomy
Disclosures
EU Taxonomy Disclosures
70-75
E1. SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
75-80
E1. IRO-1
Description of the processes to identify and assess material climate-
related impacts, risks and opportunities
75-80
E1-2
Policies related to climate change mitigation and adaptation
81
E1-3
Actions and resources in relation to climate change policies
81-83
E1-4
Targets related to climate change mitigation and adaptation
83-85
E1-5
Energy consumption and mix
85-88
E1-6
Gross Scopes 1, 2, 3 and Total GHG emissions
88-94
E1-7
GHG removals and GHG mitigation projects financed through carbon
credits
94
E1-8
Internal carbon pricing
94
E2 Pollution
Reference
Title
Page
Number
E2. IRO-1
Description of the processes to identify and assess material pollution-
related impacts, risks and opportunities
96
E2-1
Policies related to pollution
96-97
E2-2
Actions and resources related to pollution
97
E2-3
Targets related to pollution
97
E2-4
Pollution of air, water and soil
97
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S1 Own Workforce
Reference
Title
Page
Number
S1. SBM-2
Interests and views of stakeholders
100
S1. SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
100-101
S1-1
Policies related to own workforce
102-103
S1-2
Processes for engaging with own workforce and workers’
representatives about impacts
103
S1-3
Processes to remediate negative impacts and channels for own
workforce to raise concerns
104
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
104-106
S1-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
106-107
S1-6
Characteristics of the undertaking’s employees
107-109
S1-9
Diversity metrics
109
S1-10
Adequate wages
110
S-11
Social protection
110
S1-12
Persons with disabilities
109
S1-13
Training and skills development metrics
110
S1-14
Health and safety metrics
111
S1-15
Work-life balance metrics
111
S1-16
Remuneration metrics (pay gap and total remuneration)
112
S1-17
Incidents, complaints and severe human rights impacts
112
S2 Workers in the Value Chain
Reference
Title
Page
Number
S2. SBM-2
Interests and views of stakeholders
113
S2. SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
114-115
S2-1
Policies related to value chain workers
115-117
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
117-118
S2-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
118-119
S3 Affected Communities
Reference
Title
Page
Number
S3. SBM-2
Interests and views of stakeholders
120
S3. SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
120-122
S3-1
Policies Governing Affected Communities
123
S3-2
Processes for engaging with affected communities about impacts
123-124
S3-4
Taking action on material impacts on affected communities, and
approaches to managing material risks and pursuing material
opportunities related to affected communities, and effectiveness of
those actions
124-125
S3-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
125
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S4 Consumers and End-users
Reference
Title
Page
Number
S4. SBM-2
Interests and views of stakeholders
127
S4. SBM-3
Material impacts, risks and opportunities and their interaction with
strategy and business model
127-128
S4-1
Policies related to consumers and end-users
128-129
S4-2
Processes for engaging with consumers and end-users about impacts
129-130
S4-3
Processes to remediate negative impacts and channels for consumers
and end-users to raise concerns
130
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
131-133
S4-5
Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
133-134
G1 Business Conduct
Reference
Title
Page
Number
G1. GOV-1
The role of the administrative, management and supervisory bodies
136
G1-1
Business conduct policies and corporate culture
137-139
G1-2
Management of relationships with suppliers
139-140
G1-3
Prevention and detection of corruption and bribery
140-142
G1-4
Incidents of corruption or bribery
142
G1-6
Payment practices
142
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Environmental Information
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
ESRS E1 – Climate Change
INTRODUCTION
Over recent years, the global community, consisting of scientific researchers,
governments, multilateral organisations, communities, and the private sector, has
increasingly recognised 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 and/or opportunities.
With buildings and construction accounting for around 40% of global annual GHG
emissions
(*)
, climate change mitigation remains a key material topic for the Company
and, in our view, the real estate sector as a whole.
As part of our assessment, we have identified various climate change mitigation topics,
along with 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. However, recognising the
importance of that topic, GCP will continue to closely monitor future developments and
take necessary actions as appropriate.
IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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.
(*)
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
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Table 12
Material sustainability matters covered in ESRS E1
Sub-topic
Sub-sub-topic
Material
Impact
Categorisation
IRO
Localisation 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 Company integrates climate-related considerations into its renumeration practices
by incorporating a climate-related topic into the Remuneration Policy for executive
individuals described. This is outlined in the subsection related to disclosure requirement
Gov-3
Integration of Sustainability-Related Performance in Incentive Scheme
s, found in the
ESRS 2 Disclosures.
Following the conclusion of each fiscal year, the Company prepares a detailed
Remuneration Report as part of the materials distributed before the next Annual General
Meeting, published on the Company’s website in May or June. These materials are
prepared in accordance with Article 7 of the Luxembourg law of 24 May 2011 (the “2011
Law”), implementing the Shareholder Rights Directive II (EU) 2017/828. The materials
are published annually on the General Meeting pages found under the Investor Relations
web page in the Company’s 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, the Company 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 prioritises the Company’s least energy-efficient assets for
initiatives aimed at improving energy performance. The assets are identified based
on their exposure to emerging regulation focused on building energy efficiency, GHG
emissions reduction and decarbonisation, 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.
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
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decarbonisation levers that can be implemented for each property. Specifically, energy
savings and cost data are gathered through these audits to assess the impact of distinct
investment packages and 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 Company’s plan is continuously
updated to improve its accuracy. Additionally, the Company 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 subsection 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 Company’s target’s compatibility with the limiting of global warming to 1.5°C in line
with the Paris Agreement, which the Company applied in its assessment.
Decarbonisation Levers
The energy audits discussed above provide valuable insights into the energy impact
and cost implications of key decarbonisation levers. These insights are consolidated
into key investment packages that combine energy efficiency measures and renewable
energy systems. These packages prioritise mitigating exposure to emerging energy
efficiency regulations as a primary focus. Decarbonisation levers identified within our
own operations and downstream in the value chain (i.e. in tenant spaces), with the only
upstream measures being energy procurement, include the following:
•
Installing solar PV systems
•
Pipe insulation, hydraulic balancing, and heating automation measures
•
Digitalisation, optimisation, and replacement of heating systems
•
Installation of air-source heat pumps and hybrid heat pump systems
•
Renewable energy procurement and grid decarbonisation
•
Connect to district heating and the planned decarbonisation of heating grids
•
Building envelope improvements (insulation, windows)
Key actions planned at this stage involve investments in PV systems and renewable
energy procurement, while pilot projects have been launched to begin digitalisation,
optimisation of heating systems, implementation of heating automation measures
as well as installation of air-source heat pumps and hybrid systems to understand
their feasibility on a larger scale. When implementing these heating system-related
measures, 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 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, investment decisions taken today influence locked-in GHG emissions
during this time period. Recognising this impact, we carefully consider these factors
when planning renovation measures and replacement of heating systems. Wherever
economically and operationally feasible, we prioritise the deployment of low-carbon
solutions (e.g. hybrid-heating) or fully electric heating systems (e.g. heat pumps).
However, barriers to their implementation, such as 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 do not consider our business excluded from EU
Paris-aligned benchmarks, as outlined in ESRS E1 paragraph 16g, as GCP 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, which will be integrated into our overall
business planning. These plans are in their initial stages following the reformulation
of the Climate Transition Plan’s methodology and energy audit process. Based on the
current findings of the Transition Plan, the Company has estimates of the CapEx required
to meet the target but has not yet formally allocated the CapEx over the medium-term.
(*)
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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The primary reason for this is to allow for real project data 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 GHG 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 section, in particular its decarbonisation
levers, key actions, and CapEx plans, will increase taxonomy-aligned CapEx shares
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 achieve the 30% reduction in primary energy demand,
required to meet the screening criteria, is still under assessment, as are whether the
measures will increase shares of Taxonomy-aligned OpEx and Turnover. A more precise
mapping between decarbonisation levers and applicable EU Taxonomy activities can be
found in Table 15 in the E1-3 Actions subsection.
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 Operations
Department.
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 Company 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
were also explored. Available public funding programs for energy-efficiency saving
measures were also reviewed. 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 Company.
The outline provided by the Climate Transition Plan and outputs of property-specific
energy audits are to be handed over to the Operations and Construction departments for
development of asset-level plans and execution.
After working with Operations to better understand the economic feasibility of the
current Transition Plan, which primarily focuses on mitigating exposure to current
and emerging regulation while achieving the current GHG emission reduction target,
the Climate Transition Plan was presented to the Daily Management. While no CapEx
amounts have been approved and allocated over the medium-term, specific budgets
were allocated to pilot projects for the considered decarbonisation technologies, which
are currently under implementation.
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Improved energy efficiency of the portfolio through:
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
Transition Plan Implementation
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EU Taxonomy Disclosures
During the past three years, GCP 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 GCP’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-
optimisation 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, GCP is working towards optimising 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:
•
Considering the substantial contribution to, and compliance with the DNSH
criteria of the EU Taxonomy when making decisions about renovations and new
development projects.
•
Focusing on achieving EU Taxonomy alignment for larger CapEx related to
construction of new buildings’ (Category 7.1 under the EU Taxonomy Regulation)
and renovation of existing buildings (Category 7.2 under the EU Taxonomy
Regulation), as these projects hold greater material significance in terms of their
environmental impact compared to smaller ones.
•
Data collection improvements through better utilisation 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 GCP. 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 GCP as a whole. Compliance with minimum social safeguards
was also evaluated for GCP at a company level.
Substantial Contribution Assessments
GCP 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. GCP applies a 15% benchmark approach for Germany,
endorsed by the German Sustainable Building Council (DGNB), while in London, 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 standards, and larger
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buildings require airtightness, thermal integrity, and lifecycle Global Warming Potential
tests—though GCP’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 Germany’s GEG energy law). If projects fall
short, they are assessed under 7.3 (energy-efficient equipment installation). Meanwhile,
CapEx for energy performance systems (7.5) and renewable energy installations (7.6)
was allocated in 2024, but no investment was made in EV charging stations (7.4). This
methodology ensures GCP’s activities align with climate mitigation goals, reinforcing
sustainable property investments under EU Taxonomy guidelines.
Do No Significant Harm Assessments
GCP’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 was deemed not applicable since GCP only renovates existing
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. Other activities (7.3, 7.5, 7.6, and 7.7) were
assessed primarily for Climate Change Adaptation, while 7.4 (EV charging stations) was
not reported due to the absence of CapEx in 2024. These assessments help GCP 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
Company’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, GCP 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 organisations
to evaluate potential hazards that could impact physical assets or operations in specific
locations. The screening of the GCP 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 GCP 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, GCP is
disclosing the performance indicators in the table template provided by the European
Commission.
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Financial year 2024
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code
(s)
Absolute CapEx
Proportion of CapEx 2024
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
transitional
activity
EUR
%
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
778,946.53
0.48%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
Y
Y
Y
N/EL
Y
2.42%
T
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
3,729,898.72
2.32%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
Y
N/EL
Y
1.16%
E
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
CCM 7.5
1,275,011.01
0.79%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.26%
E
Installation, maintenance and repair of renewable
energy technologies
CCM 7.6
34,843.37
0.02%
Y
N
N/EL
N
N/EL
N/EL
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
0.02%
E
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
5,818,699.62
3.62%
3.62%
0.0%
0.0%
0.0%
0.0%
0.0%
3.86%
Of which enabling
5,039,753.10
3.13%
3.13%
0.0%
0.0%
0.0%
0.0%
0.0%
N/EL
Y
N/EL
N/EL
N/EL
N/EL
Y
1.45%
E
Of which transitional
778,946.53
0.48%
0.48%
N/EL
Y
Y
Y
Y
N/EL
Y
2.42%
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
-
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.16%
Renovation of existing buildings
CCM 7.2
-
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.02%
Installation, maintenance and repair of energy
efficiency equipment
CCM 7.3
6,281,745.03
3.90%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
3.29%
Installation, maintenance and repair of
instruments and devices for measuring, regulation
and controlling energy performance of buildings
CCM 7.5
8,435.24
0.01%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
0.01%
Installation, maintenance and repair of renewable
energy technologies
CCM 7.6
2,931.56
0.00%
0.00%
Acquisition and ownership of buildings
CCM 7.7
143,875,013.58
89.43%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
90.48%
CapEx of Taxonomy- eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities) (A.2)
150,168,125.41
93.34%
93.34%
0.0%
0.0%
0.0%
0.0%
0.0%
93.96%
A.
CapEx of Taxonomy-eligible activities (A.1+A.2)
155,986,825.03
96.96%
96.96%
0.0%
0.0%
0.0%
0.0%
0.0%
97.82%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy- non-eligible activities
4,894,000
3.04%
Total (A + B)
160,880,825
100.0%
Proportion of
CapEx
from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2024
METRICS: EU TAXONOMY
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Proportion of
OpEx
from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024
Financial year 2024
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code
(s)
Absolute OpEx
Proportion of OpEx 2024
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
transitional
activity
EUR
%
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
90,545,900
39.2%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
30.2%
OpEx of environmentally sustainableactivities
(Taxonomy-aligned) (A.1)
90,545,900
39.2%
39.2%
0.0%
0.0%
0.0%
0.0%
0.0%
30.2%
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
140,574,044
60.8%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
69.8%
OpEx of Taxonomy- eligible but not environmentally
sustainable activities (not Taxonomy-aligned activities (A.2)
140,574,044
60.8%
60.8%
0.0%
0.0%
0.0%
0.0%
0.0%
69.8%
A.
OpEx of Taxonomy-eligible activities (A.1+A.2)
231,119,944
100%
100%
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
231,119,944
100.0%
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Financial year 2024
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
Economic activities
Code
(s)
Absolute turnover
Proportion of
Turnover 2024
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
transitional
activity
EUR
%
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
197,142,738
33.0%
Y
N
N/EL
N/EL
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
Y
27.3%
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
197,142,738
33.0%
33.0%
0.0%
0.0%
0.0%
0.0%
0.0%
27.3%
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
399,875,047
67.0%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
72.7%
Turnover of Taxonomy-eligible but not environmentally
sustainable activities
(not Taxonomy-aligned activities (A.2)
399,875,047
67.0%
67.0%
0.0%
0.0%
0.0%
0.0%
0.0%
72.7%
A.
Turnover of Taxonomy-eligible activities (A.1+A.2)
597,017,785
100.0%
100.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy- non-eligible activities
-
0.0%
TOTAL (A + B)
597,017,785
100.0%
Proportion of
Turnover
from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2024
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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
GCP 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:
•
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.
•
Transition legislation:
Evolving climate-related regulations may impose additional
costs or operational adjustments.
•
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 our
Company. 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)
, GCP also describes the potential
opportunities which the Company has identified in each of these factors. During the climate-
related risk assessment the Company qualitatively considered the scenarios laid out by
IPCC’s shared Socioeconomic Pathways
(2)
as well as the International Energy Agency (IEA)’s
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 Company, 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 year’s analysis as a baseline and then incorporating observed
developments in risk factors in GCP’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 Company’s countries of operation and the context of its
business model and activities.
Table 13 below summarises the identified risks and impacts while outlining the mitigation
strategies employed to manage these risks within our organisation.
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
33%
100%
100%
Taxonomy-aligned, eligible and non-eligible percentages of GCP‘s KPIs
Eligible
Aligned
Non-eligible
Turnover
97%
3%
3.6%
CapEx
OpEx
39.2%
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Table 13 - 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 questi-
ons on whether assets may become “stranded” by
regulation. Carbon pricing schemes have taken a re-
latively clear shape in Germany, the Company’s pri-
mary country of operation. The EU recast its Energy
Performance of Buildings Directive (EPBD) in 2024,
introducing national energy-reduction targets for
residential buildings through 2035, and then lea-
ving it to member states to implement pathways to
a zero-GHG emission building stock by 2050. These
targets require some of the reductions to be achie-
ved through renovation of existing building, alt-
hough the text is written in a way that gives mem-
bers states discretion in implementation.
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 po-
litical upheavals in Germany. The gap between the
medium-term targets for residential buildings out-
lined 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 ope-
rating and compliance costs.
The energy reduction
targets of the EPBD and other energy-related requi-
rements are poised to require significant CapEx to
maintain building compliance, although the precise
levels cannot yet be determined due to political
uncertainty surrounding national implementation
of the EPBD.
(S, M, L)
In 2024, the Company launched an extensive re-
view of its Climate Transition Plan underlying its
climate ambitions, integrating data from its upda-
ted energy audit process to consider efficiency-
improving measures while also leveraging CRREM
pathways to consider the level of action needed
to achieve reductions consistent with a 1.5-de-
gree scenario.
Potential updates to the Company’s
stated target are still under review, awaiting com-
pletion 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 en
-
sure the current carbon reduction target will be
met while also mitigating exposure to the medi-
um-term energy reduction targets for EU member
states in the EPBD recast in an economical man-
ner. The Company anticipates that increased cli-
mate ambition will be needed but is also confident
that the Climate Transition Plan now effectively
considers emerging policies against potentially
more aggressive 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 Company expects opportuni-
ties in the policy-driven transition
to more efficient buildings in the
form of lower operating costs, re-
duced stranding risks and decrea-
sed exposure 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 energy performance and
become more attractive to inves-
tors, tenants and financial instituti
-
ons, although this has not yet been
observed.
The Company also sees
a general opportunity to ensure
long-term value from its opera-
tions through active monitoring of
policy developments as they occur
and planning interventions in a
pragmatic 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
long-term likely. It is also possible that the scope
of these regulations expands to take in more seg-
ments of the Company'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 medium-to-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.
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
77
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 properties are
likely to reduce demand for inefficient properties. Like
-
wise, evolving investor preferences for sustainable and
resilient assets could drive higher valuations for green
buildings.
Financial institutions in the EU are increasingly incor-
porating climate-related criteria in their financing 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 in-
tensities.
The age of German building stock, where the Company
primarily operates, combined with our business model
of acquiring and managing existing buildings, poses
significant challenges in offering low or zero-carbon
properties through the level of investment that is requi-
red. Inability to meet tenant preferences may increase
vacancies and reduce revenues while inability to meet
market expectations may reduce access to capital. Ho-
wever, during the ongoing housing shortages in major
European cities, tenants have not shown a preference for
climate-friendly buildings over less efficient buildings.
The current focus among most financiers lies on en
-
suring regulatory compliance over a typical loan term
(up to 10 years), which is unlikely to change despite the
rightward shift in EU politics. A niche subset calls for Pa-
ris-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 pressure 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 sus-
tainable finance regulation is forcing tenants and inves
-
tors to report on their sustainable actions, which in turn
increases these demands on the Company. The existing
market structure leaves landlords responsible for capi-
tal expenditures needed to improve energy efficiency of
existing assets with limited ability to recover reduced
utility expenses enjoyed by the tenant.
(L)
The Company is working with tenants to reduce ener-
gy and utility consumption as part of tenant awareness
campaigns.
Given the legal limits placed on modernisation rent in-
creases along with GCP’s internal consideration whet-
her further limits are warranted to ensure tenants are
financially able to meet increased rents, the Company is
developing renovation planning processes that enable
full realisation of available grants from the German go-
vernment to mitigate any risks posed by the potentially
high levels of CapEx needed to improve highly inefficient
existing buildings to the greatest extent possible.
The Climate Transition Plan prioritises the most
inefficient assets in the portfolio for assessment of pos
-
sible interventions to determine economic feasibility
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 Company 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 Company prepared to
handle shifts toward more aggressive climate-related
requirements should they materialise.
GCP’s scale provides economic bene-
fits which result in competitive ad
-
vantages in repositioning assets with
development potential in terms of
energy efficiency or climate resilience.
This could create growth opportuni-
ties 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 shif
-
ting tenant preferences, as well as
investor demands over the medium-
to-long term, positively impacting
rents and access to capital. Green
assets may strengthen business resi-
lience by increasing revenue through
new products and services that meet
market demands and may improve ac-
cess to capital and debt. Green bond
issuance, sustainability-linked loans
or energy efficiency-related subsidies
for buildings can be used to improve
the financial feasibility of making the
needed investments, although not all
green financiers offer incentives ade
-
quately adjusted to the expected level
of CapEx placed on the Company.
Energy
Energy markets are more prone to price fluctuati
-
ons 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 follo-
wing the Russian war in Ukraine and the sharp rise
in energy prices. This situation has prompted many
sectors, including the real estate sector, to call for
accelerating the transition to a low-carbon econo-
my. Nonetheless, the current energy mix of most
grids remain primarily dependent on fossil fuels,
as renewable energy generation and storage ca-
pacities are still insufficient to meet the decarbo
-
nisation goals necessary for a fully decarbonised
energy system.
(S, M, L)
The Company aims to reduce reliance on fossil
fuels through its target to procure 100% of land-
lord-obtained electricity through power purchase
agreements (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 energy
from renewable sources and a shift
to decentralised energy generation
can reduce operational and compli-
ance costs, as well as exposure to
volatile fossil fuel markets. Green
bond issuance or sustainability-lin-
ked loans can be used to improve
the financial feasibility of making
the needed investments if mea-
ningful incentives are offered by
financiers.
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
78
Risk Category
Description
Impacts and Timeframe
(S = short-term, M = medium-term, L = long-term)
Mitigation Strategy
Opportunity
Technology
GCP recognises that current technologies are insuf-
ficient to achieve the grid decarbonisation needed
to address climate change, and this is expected to
increase the pace of technological development.
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 result in
investment in technologies that become obsolete
before their operational lifespan ends. Buildings
with outdated technology systems may experience
reduced demand and require higher maintenance
costs/CapEx requirements to meet minimum effi
-
ciency standards and current work, leisure and resi-
dential trends. Exposure is 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
regulatory developments and emerging technolo-
gies on the market and evaluating their costs and
potential to enhance energy efficiency and carbon
profiles of buildings. The energy-related procedu
-
res outlined in the new Environmental Policy emp-
hasise prioritisation of investment towards proven
and cost-effective technologies.
The Company sees significant op
-
portunity to engage with and in-
vest in prop-tech companies to en-
sure modern, forward-thinking, and
appropriate technological outfits of
the Company‘s properties.
Reputation
Companies seen as taking insufficient climate ac
-
tion 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 cli-
mate change.
Any shortcomings in the climate strategy of the
Company could invite criticism from societal ac-
tors, damaging the Company‘s reputation. Errors
in non-financial reporting might be perceived as
fraudulent or „greenwashing“. Furthermore, repu-
tational damage from inaction on climate change
could hinder 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 address
gaps in the Company‘s climate strategy, bringing
these issues to the attention of relevant internal
stakeholders. The department works to ensure
high-quality sustainability disclosures. Clear com-
munication on the Company‘s sustainability efforts,
climate risk actions and carbon reduction targets
will reassure employees, potential candidates, and
investors of the Company‘s continued efforts regar-
ding climate change mitigation and adaptation.
Through meeting or exceeding re-
quirements, expectations, or best
practices, the Company may be able
to positively improve its reputation.
This can also improve the Com-
pany‘s ability to attract and retain
critical talent.
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
79
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 Company 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 subsection 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
Decarbonisation 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 prioritises measures needed to meet explicit policy requirements
and the Company’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 Company’s annual GHG emission reporting outlined in the
Coverage
portion of
subsection 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 subsection E1-1.
As with our annual energy consumption and GHG emissions reporting in subsections
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 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, the most recent resilience
analysis leaves the Company 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 GCP’s Board
of Directors and the Daily Management sharing overall responsibility for identifying,
assessing and managing climate-related risks, impacts and opportunities.
GCP’s Daily Management 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 Company 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 GCP’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 Company’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
maximise potential opportunities. Please see below GCP’s Governance Structure on
Climate Risks:
(*) See CRREM’s report
From Global Emission Budgets to Decarbonization Pathways at Property Level
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
80
Building Resilience Taskforce
Inter-departmental platform for the discussion and
collaboration on climate risks
Develop KPI’s for climate risk & action plans and
adaptation solutions
Risk Committee
Oversees risk management,
incl. climate risks
Management
Assessment and management of climate-related
risks at corporate level
Sustainability
Department & Risk Officer
Assessment of physical
and transitional climate risks
Operational Department
Assessment and management of
climate-related risks on a property level
Governance Structure
on Climate Risks
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
81
E1-2 – POLICIES RELATED TO CLIMATE CHANGE MITIGATION AND
ADAPTATION
At GCP 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 Daily Management 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 decarbonisation levers
mentioned in subsection E1-1.
For this, the policy delineates responsibilities at the asset and
company-level between operations and Daily Management.
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 Grand City Properties S.A., specifically to its direct operations. The most
senior level of the Company responsible for its implementation is the Daily Management.
The policy is publicly available to all stakeholders through the
Sustainability Governance
web page
on the Company website.
E1-3 – ACTIONS AND RESOURCES IN RELATION TO CLIMATE CHANGE
POLICIES
In our business model, the primary decarbonisation 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 minimise negative impacts on our tenants. Decarbonisation levers are
discussed in more detail in subsection E1-1.
In the year 2024, the Company achieved an GHG emission reduction of 27% compared
to its 2019 baseline, while the Company expects further GHG emission reductions in the
amount of 13% to achieve its 2030 target, in other words covering the short- and medium-
term horizons discussed in subsection E1-1. For more information on how the Company
evaluates progress against its GHG emission reduction target, refer to subsection E1-4.
Table 14 below presents the proportion each value chain stage and the associated
decarbonisation measures driving GHG emission reductions needed to achieve the 40%
reduction target as outlined in the Climate Transition Plan discussed in subsection E1-1.
Out of the 13% remaining GHG emission reductions, the percentages in the table below
indicate the expected proportion among each scope.
Table 14 –
Total GHG emission reductions of the 40% target in context of the Climate Transition Plan
Value Chain Stage(s)
Decarbonisation Lever
Proportion of GHG
Emission Reductions
Upstream
Renewable energy procurement and grid
decarbonisation
23.3%
Connect to district heating the planned
decarbonisation of heating grids
Own Operations
(Landlord-controlled
spaces)
Installing Solar PV Systems
7.5%
Own Operations
(landlord-controlled
spaced) & Downstream
(Tenant-controlled
spaces)
Pipe insulation, hydraulic balancing, and heating
automation measures
9.2%
Digitalisation and optimisation of heating
systems
Installation of air-source heat pumps and hybrid
heat pump systems.
Building envelope improvements (insulation,
windows)
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
82
As outlined in subsection E1-1, achieved and expected GHG emission reductions in the
Company’s pathway towards the 40% GHG emission reduction target are based on the
Company’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 Company has only just begun implementation of key actions in the
framework of the Climate Transition Plan such as heat pump and digitalisation measures
which are currently in pilot phases. The Company has invested in several decarbonisation
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 decarbonisation
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 subsections E1-1 and the EU Taxonomy Disclosures, although as discussed in the
former the Company 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 decarbonisation levers are mostly
covered by the EU Taxonomy Disclosures, with some found in other relevant disclosures.
The table below maps decarbonisation 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 decarbonisation 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 decarbonisation levers at
this time.
Table 15 – Mapping Decarbonisation levers to applicable EU Taxonomy Activities or other
relevant disclosures
Decarbonisation 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
Table 18 in subsection 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)
Digitalisation, optimisation, 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
decarbonisation
N/A, although disclosures on renewable
energy procurement can be found in Table 18 in
subsection E1-5.
Connect to district heating and the planned
decarbonisation 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 Table 18 in subsection
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.
If the above-stated requirements are not met this
falls under Installation, maintenance, and repair of
energy efficient equipment (7.3)
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
83
GHG Emissions Reduction Target
Table 16 below outlines the key details of the baseline, current, and target values for the
GHG emission reduction target. For an understanding of the identified decarbonisation
levers and their quantitative contribution to achieve the GHG reduction target, refer to
the Decarbonisation levers portion of subsection E1-1 and subsection E1-3.
Please refer to the EU Taxonomy Disclosures and Table 15 above and the surrounding
discussion to understand the relationship between the decarbonisation levers and the reported
figures aligned to the EU Taxonomy. The Climate Transition Plan regards the measures needed
to achieve the Company’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
subsection 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 Company-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 GCP’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:
•
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
)
•
Achieve a 20% reduction in energy intensity by 2030 against the 2019 baseline,
measured in kWh/m
2
•
Switch electricity to Power Purchasing Agreements (PPAs) certified renewable
electricity from wind, hydro-electric and solar PV sources by 2027
Table 16 –
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]
2.72
2.18
2.12
1.78
-2.07%
Scope 2 [kgCO
2
e/sqm*year]
5.96
5.78
5.41
4.38
-3.49%
Scope 3 Category 13 GHG Emissions
from Fossil Fuels [kgCO
2
e/sqm*year]
8.18
7.47
7.27
6.19
-4.38%
Scope 3 Category 13 GHG Emissions
from Grid Energy [kgCO
2
e/sqm*year]
28.36
19.62
18.35
14.77
-30.05%
Total carbon intensity [kgCO
2
e/sqm*year]
45.22
35.05
33.15
27.13
-40.00%
GFA (sqm)
3,367,344
(*)
3,853,395
3,853,395
3,853,395
N/A
(*) since 2019, GCP 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
27.13
6.17
2019
2023
2024
2030
33.15
35.05
45.22
7.53
7.96
8.68
40% Reduction in CO
2
Emissions until 2030
Figures in kgCO
2
e/sqm
Scope 1+2+3
Scope 1+2
GRAND CITY PROPERTIES S.A.
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Consolidated Sustainability Statement
84
Energy Consumption Reduction Target
Table 17 below provides key details on the Company’s energy reduction target of 20%
against the 2019 baseline, which has already been achieved.
Table 17 –
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]
160.36
125.18
122.06
128.29
-20%
GFA (sqm)
3,367,344
3,853,395
3,853,395
3,853,395
N/A
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, subsection E1-1, and the methodological notes in subsection E1-6.
Absolute GHG emissions and energy consumption target disclosures are not presented
in this report, asnormalisation 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
Decarbonisation 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 portion in subsection
E1-6, although the Climate Transition Plan outlined in subsection E1-1 differs slightly in that it
(*)
From Global Emission Budgets to Decarbonization Pathways,
CRREM
GRAND CITY PROPERTIES S.A.
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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
decarbonisation levers, please refer to the discussion in subsection E1.SBM-3 and E1.IRO-1.
The targets were originally set by Daily Management, 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 subsection E1-1. This approach is relevant to the Company
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 company 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 Company has been progressively transitioning its electricity utility contracts to a large-
scale supplier, in order to achieve a scale needed to begin needed for PPA investments.
Progress during this enabling stage has been slower than anticipated due the terms of pre-
existing contracts and in some cases tenant preferences towards other utility providers. In
2024, the Company 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 Company 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 18 in
subsection E1-5. This target’s primary intention is for the Company to fully take advantage
of low hanging fruits in its operational energy procurement, and in the Company’s view did
not require science-based consideration and scenario analysis in its target-setting as it was
seen as a common-sense decision.
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 Table 18 in subsection E1-5, specifically considering the German
portfolio, following the associated methodological notes in subsection E1-6. This target
does not include interim milestones, however, progress is evaluated annually. The target
was originally set by Daily Management, 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 Table 18. However, due to tenant data sharing restrictions, we cannot monitor tenant-
obtained energy consumption related to fuels or district heating. GCP 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 Company does not directly consume coal or fossil sources other
than those presented in Table 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 portion of subsection E1-6.
The absolute energy intensity in Table 18 below increased slightly 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, which concerns the same set of buildings reported in both years,
shows a slight decrease in energy intensity.
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Table 18 - Absolute and like-for-like energy for managed assets
Energy reported in kWh
Absolute
Like-for-Like
EPRA Code
Metric
2023
2024
2023
2024
Elec-Abs
Elec-LfL
Electricity consumed for landlord shared services
16,603 MWh
22,621 MWh
16,268 MWh
19,734 MWh
Total landlord-obtained electricity consumed
16,603 MWh
22,621 MWh
16,268 MWh
19,734 MWh
Proportion of landlord-obtained electricity generated offsite from renewable sources
87.35%
88.82%
87.64%
85.04%
Total
landlord-obtained electricity generated and consumed onsite from renewable sources
(*)
0 MWh
0 MWh
0 MWh
0 MWh
Total landlord-obtained electricity generated onsite from renewable sources and exported
369 MWh
322 MWh
369 MWh
322 MWh
Total tenant-obtained electricity consumed
75,230 MWh
80,026 MWh
75,230 MWh
75,230 MWh
Total electricity consumed
91,833 MWh
102,647 MWh
91,498 MWh
94,964 MWh
Total electricity consumption data coverage, by area (sqm)
3,679,520 m
2
3,895,773 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
24.43%
42.68%
24.94%
45.66%
Proportion of tenant-obtained electricity consumption and associated GHG emissions that is estimated
100.00%
100.00%
100.00%
100.00%
Proportion of total electricity consumption and associated GHG emissions that is estimated
93.79%
93.79%
95.09%
95.09%
Fuels-Abs
Fuels LfL
Fuels (natural gas) consumed for landlord shared services
39,269 MWh
40,166 MWh
35,008 MWh
35,606 MWh
Fuels (oil) consumed for landlord shared services
2,407 MWh
3,799 MWh
1,649 MWh
1,548 MWh
Fuels (natural gas) allocated for tenant consumption
131,027 MWh
137,685 MWh
115,807 MWh
119,260 MWh
Fuels (oil) allocated for tenant consumption
8,034 MWh
13,680 MWh
5,667 MWh
5,288 MWh
Total landlord shared services fuels consumed
41,675 MWh
43,965 MWh
36,657 MWh
37,153 MWh
Total (landlord-obtained) fuels allocated for tenant consumption
139,060 MWh
151,366 MWh
121,474 MWh
124,549 MWh
Total (landlord-obtained) fuels consumed
180,736 MWh
195,331 MWh
158,131 MWh
161,702 MWh
Proportion of total (landlord-obtained) fuels from renewable sources
0%
0%
0%
0%
Total (landlord-obtained) fuels consumption data coverage, by area (sqm)
1,666,287 m
2
1,728,533 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
10.03%
17.25%
7.64%
15.30%
DH&C-Abs
DH&C-LfL
Total district heating/cooling consumed for landlord shared services
43,715 MWh
41,842 MWh
39,880 MWh
37,718 MWh
Total district heating/cooling allocated for tenant consumption
142,875 MWh
141,765 MWh
129,617 MWh
122,525 MWh
Total (landlord-obtained) district heating/cooling consumed
186,590 MWh
183,607 MWh
169,496 MWh
160,244 MWh
Proportion of total (landlord-obtained) district heating and cooling from renewable sources
0%
0%
0%
0%
Total (landlord-obtained) district heating/cooling consumption data coverage, by area (sqm)
2,037,507 m
2
2,065,623 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
10.72%
12.96%
8.55%
13.63%
(*) 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
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Table 18 - Absolute and like-for-like energy for managed assets
Energy reported in kWh
Absolute
Like-for-Like
EPRA Code
Metric
2023
2024
2023
2024
Absolute and
like-for-like
energy
Total landlord shared services energy consumed
101,993 MWh
108,428 MWh
92,804 MWh
94,606 MWh
Total tenant-obtained/tenant allocated energy consumed
361,038 MWh
381,784 MWh
329,939 MWh
325,823 MWh
Total landlord-obtained energy consumed
383,929 MWh
401,559 MWh
343,895 MWh
341,679 MWh
Total energy consumption
459,159 MWh
481,585 MWh
419,125 MWh
416,909 MWh
Total energy consumption data coverage, by area (sqm)
3,799,509 m
2
3,895,773 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
10.99%
16.72%
8.91%
16.27%
Proportion of tenant-obtained energy consumption and associated GHG emissions that is estimated
100.00%
100.00%
100.00%
100.00%
Proportion of total energy consumption and associated GHG emissions that is estimated
25.57%
30.56%
25.26%
31.38%
Proportion of total energy generated offsite from renewable sources
2.53%
3.16%
2.83%
3.66%
Proportion of total energy generated onsite from renewable sources (consumed onsite or exported)
0.08%
0.07%
0.09%
0.08%
Total renewable energy consumption and generation
10,089 MWh
13,115 MWh
10,089 MWh
12,820 MWh
Total energy consumption from fossil sources
449,070 MWh
468,470 MWh
409,036 MWh
404,089 MWh
Total building energy intensity (kWh/sqm*year)
Energy-Int
Landlord-obtained building energy intensity for energy consumed
101.05 kWh/m
2
103.08 kWh/m
2
90.92 kWh/m
2
90.34 kWh/m
2
Total building energy intensity for energy consumed
120.85 kWh/m
2
123.62 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 are
89.32%
96.63%
95.30%
97.87%
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Regarding total energy consumption from nuclear sources and its proportion of total
energy consumption, the Company 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 neighbouring 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 Company’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 Company 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
459,159 MWh
481,585 MWh
Total Net Revenue from activities in high
climate impact sectors
411,313,000 EUR
422,693,000 EUR
Energy Intensity from Activities in High
Climate Impact Sectors
1.12 MWh / ‘000 EUR
1.14 MWh / ‘000 EUR
E1-6 – GROSS SCOPES 1, 2, 3 AND TOTAL GHG EMISSIONS
To ensure we prioritise 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, we attained 100%
energy data coverage for our operational control portfolio in Germany and the UK.
To maximise 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 GCP 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 utilised informational videos and posters, as well as provided
information through our Service Centre to encourage behavioural changes among the
tenants to reduce energy consumption. This approach empowers our tenants by raising
awareness and incentivising them to reduce energy consumption.
In line with common practices in the real estate sector, GCP’s consolidated entities own
certain properties which it does not directly manage. Lack of management responsibilities
present significant challenges in environmental data collection, since GCP 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 Company
is aware of the ongoing debate surrounding the implementation of ESRS requirements
regarding GHG organisational 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
Company 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, GCP 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 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 Company has
decided to continue applying its operational control boundary according to sector-specific
GHG protocol guidance
(*)
, which the Company also anticipates EFRAG will adopt in a similar
(*) 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
(*)
Appendix F to the GHG Protocol Corporate Accounting and Reporting Standard – Revised Edition
(*) 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
GRAND CITY PROPERTIES S.A.
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fashion as this approach was more recently reiterated in technical guidance jointly produced by standard-setting organisations GRESB, CRREM, and the Partnership for Carbon Accounting
Financials (“PCAF”)
(*)
.
Both the absolute and like-for-like location-based GHG emissions intensities declined in 2024 compared to 2023. Market-based GHG emissions intensities increased, however, primarily
driven by district heating utilities which are more challenging to decarbonise, although the increase in market-based like-for-like intensities was lesser in magnitude than that of their
absolute counterparts.
Table 20 – Absolute and like-for-like GHG emissions for managed assets
GHG emissions reported in tonnes CO
2
e
Absolute
Like-for-Like
EPRA Code
Metric
2023
2024
2023
2024
GHG-Dir-Abs
GHG-Dir-LfL
Direct GHG emissions (GHG Protocol Scope 1)
7,781 t CO
2
8,289 t CO
2
6,814 t CO
2
6,898 t CO
2
GHG-Indir-Abs
GHG-Indir-LfL
Indirect GHG emissions (GHG Protocol Scope 2; Location-based)
18,930 t CO
2
19,222 t CO
2
17,654 t CO
2
17,487 t CO
2
Indirect GHG emissions (GHG Protocol Scope 2; Market-based)
10,691 t CO
2
16,463 t CO
2
9,660 t CO
2
10,875 t CO
2
Indirect GHG emissions (GHG Protocol Scope 3 from tenant-controlled energy, Location-based)
101,744 t CO
2
103,256 t CO
2
93,970 t CO
2
89,192 t CO
2
Indirect GHG emissions (GHG Protocol Scope 3 from tenant-controlled energy, Market-based)
86,508 t CO
2
108,613 t CO
2
79,579 t CO
2
82,676 t CO
2
Absolute and
like-for-like GHG
emissions
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3; Location-based)
128,455 t CO
2
130,767 t CO
2
118,438 t CO
2
113,577 t CO
2
Total GHG emissions (GHG Protocol Scopes 1, 2 and 3; Market-Based)
104,979 t CO
2
133,365 t CO
2
96,053 t CO
2
100,449 t CO
2
Total GHG emissions data coverage, by area (sqm)
3,799,509 m
2
3,895,773 m
2
3,782,227 m
2
3,782,227 m
2
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)
26.46 kg CO
2
e/
m
2
26.32 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)
33.81 kg CO
2
e/
m
2
33.57 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)
20.28 kg CO
2
e/
m
2
26.98 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)
27.63 kg CO
2
e/
m
2
34.23 kg CO
2
e/
m
2
25.40 kg CO
2
e/
m
2
26.56 kg CO
2
e/
m
2
(*)
Accounting and Reporting of GHG Emissions from Real Estate Operations, by PCAF CRREM and GRESB
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Table 21 below presents 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.
Table 21 – GHG Emissions Intensities per Net Revenue
(*)
Metric
2023
2024
Total Location-Based Emissions From
Activities in High Climate Impact Sectors
128,455 t CO
2
130,767 t CO
2
Total Market-Based Emissions From
Activities in High Climate Impact Sectors
104,979 t CO
2
133,365 t CO
2
Total Net Revenue
411,313,000 EUR
422,693,000 EUR
Location-Based Emissions Intensity per net
revenue
0.31 t CO
2
/ ‘000 EUR
0.31 t CO
2
/ ‘000 EUR
Market-Based Emissions Intensity per net
revenue
0.26 T CO
2
/ ‘000 EUR
0.32 T CO
2
/ ‘000 EUR
(*) 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 Company.
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 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
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 4
th
edition of the European Public
Real Estate Association (“EPRA”)
Sustainability Best Practice Recommendations
(“sBPR”)
published in 2024 which notable aligned the standard to the EU ESRS requirements.
The
notes below apply to Table 20 in this subsection
and Table 18 in subsection E1-5.
In 2024, GCP received the EPRA sBPR Gold award for our disclosure for the eighth time
consecutively. This year, in preparation for the first compliance window of the CSRD, we have
reported in alignment where possible with ESRS disclosure requirements according to our DMA.
Organisational Boundaries
The information and data in this report covers the operations of Grand City Properties
S.A. (GCP) spanning our direct employees and portfolio. As of 31 December 2024, the
Company portfolio held €8.6 billion of investment property excl. assets held-for-sale.
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 Table 18 in subsection E1-5 are
categorised into three distinct scopes as defined by the GHG Protocol:
•
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
(*)
.
•
Scope 2
covers indirect GHG emissions from purchased energy, including electricity,
steam, district heating and cooling.
•
Scope 3
encompasses all indirect GHG emissions generated in the value chain of the
Company that are not covered by Scope 2.
In our 2019 baseline and annual GHG emissions reporting, we use a common area/total
area ratio to estimate the gross floor area (“GFA”) from the available net lettable areas
(“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
.
(*)
scope 1 GHG emissions from real estate do not currently fall under regulates emissions trading schemes
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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 Company 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 prioritise 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 and London, which is a subset of the
Organisational Boundaries discussed above, defined as assets the Company 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 one-year period from 1
st
January
2024 to 31
st
December 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 3,896K m² (excluding assets held for sale) at the end of
31
st
December 2024.
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 Grand City Properties,
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 1st January to 31
st
December of the year under review.
Estimation of Utility Consumption
The list below outlines all applicable estimation methods involved in the preparation
of energy and GHG emissions data presented in Table 18 in subsection E1-5 and Table
20 in subsection E1-6, respectively.
As outlined in the Landlord and tenant boundaries,
allocation by scopes, scope 3 categories portion of these notes above, Scope 3 GHG
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 Table 18 in subsection E1-5 are
applicable to Scope 3 GHG emissions presented in Table 20, 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 made based on known consumption from other periods, following the ratio-
based heating-degree-days normalisation method. For electricity, the consumption
was extrapolated based on the weighted arithmetic mean of other known periods.
In some instances, this was not possible for heating. In such cases, we estimated
heating consumption by extrapolating expected values based on the building’s EPC
rating. Weather normalisation was not performed, as the estimation process involves
historical climate factor data published by the German National Meteorological
Service (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, GCP assets do not have Energy Performance Certificates (EPCs)
because existing certificates have expired, and there is limited market capacity,
(*) 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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which delays the process of issuing new EPCs. When EPCs are not available, EPC-
estimated calculations are conducted 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.
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 Company portfolio based on
EPC ratings for the properties when available.
We have reported the percentage of estimation that this represents per utility type in
Table 18 in subsection 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:
•
Electricity: 57% of landlord-obtained consumption is based on available data, with
43% estimated.
•
Heating: 85% of landlord-obtained consumption is based on available data, with the
remaining 15% estimated.
Units of Measurement and Normalisation
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 normalised, 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 and London, and therefore in the same climatic zone. Reported
properties in the UK only make up 1% of the total GHG emissions coverage by floor area and
are thus deemed not relevant for disaggregation. The GCP portfolio in Germany contains
some commercial spaces as specified in their EPCs, although these are mainly spaces
located on the ground floor of residential buildings currently utilised for commercial
purposes (i.e. kiosks or other small businesses) making up 8% of total GHG emissions
coverage by floor area and were similarly deemed not relevant for disaggregation.
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
•
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 Company’s definition
of the operational control scope.
•
In order to align with industry best practices, square meter measurements used to
normalise physical energy- and GHG emission intensities have been converted from
NLA to GFA, using asset-type-specific benchmarks by GRESB described above.
•
In its estimations of tenant-obtained electricity, GCP has adopted new benchmarks
deemed more relevant to the portfolio: the Company 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.
•
Figures relating to the proportion of total energy generated offsite from renewable/
green sources have been restated for 2023 as GCP is phasing out its procurement
of carbon-neutralised gas. The reasoning for this is that gas combustion cannot be
claimed as renewable and carbon neutralised contracts are in practice an offset, and
the Company 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.
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GHG emission factors
In 2024, GHG emission factors were sourced from a new source and therefore updated
and incorporated for 2023 and 2024 data in this report. Location-based GHG emission
factors are primarily 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.
GHG emissions 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 decarbonisation 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.
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
GCP 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 Company 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 subsection E1-
4, electricity from bundled contracts is only being procured from 2025 on, meaning the
Table 22 – 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
UK
Electricity
176
158
DE
Natural Gas
183
183
UK
Natural Gas
183
183
DE
District Heating
Advisory by external
consultancy,
following CRREM
methods
325
311
UK
District Heating
154
138
DE
Oil
CRREM
247
247
UK
Oil
247
247
(*)
version v.2.05, back-end tab of the CREEM tool
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figures reported in Proportion of landlord-obtained electricity generated offsite from
renewable sources figures from Table 18 in subsection 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 PROJECTS FINANCED
THROUGH CARBON CREDITS
GCP 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
GCP 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/tonne CO₂ through 2023, is set at €45/tonne CO₂ for 2024, and will
increase incrementally to a price corridor of €55-65/tonne 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 Company assumes a price cap of €125/tonne CO₂. Instead of taking the
recommended price of €55-65/tonne CO₂, For 2025 through 2026, GCP has already been
considering a higher price of €90/tonne CO₂ and will increase the price to €120/tonne CO₂
from 2025. In the Company’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 subsection E1-6
above, following the same organisational boundaries.
It is important to note that not all
these GHG emissions stated below are taxed under the German scheme described above,
since 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.
Table 23 – GHG Emission Volumes Covered by the Internal Carbon Pricing Scheme
GHG Category
Amount of tCO
2
e
Scope 1
8,289
Scope 2
13,586
Scope 3
74,433
(*)
Brennstoffemissionshandelgesetz (BEHG)
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ESRS E2 Pollution
INTRODUCTION
At GCP, 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 Company
operates. While these areas encompass a range of considerations, it is important to
distinguish those most relevant to a real estate company such as GCP. 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 GCP’s operation is
the combustion of fossil fuel for heat and power generation consumed at our residential
assets. Although GCP cannot directly control fossil fuel powered energy generation or
any resulting pollution, the Company takes measures to increase renewable energy
usage and focuses on the reduction of CO₂e emissions, as referred to in subsection E1-3
and E1-4 of this 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 Company has no direct
insight into its energy and electricity providers. Instead, GCP discloses CO₂e emissions
in subsection E1-6 of this report as a reference value, as combustion linked air pollutants
such as Nitrogen oxides (Nox), Sulphur oxides (Sox) and Particulate Matter (PMs)
typically increase or decrease proportionately with changes in CO₂e emissions.
Whilst we are currently unable to precisely quantify GHG emissions from our own and
our providers heating and electricity systems, the Company 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 GCP actively contributes to a
responsible and sustainable future.
IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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 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 24
Material sustainability matters covered in ESRS E2
Topic
Sub-topic
Materiality (impact/
financial/double)
Categorisation
IRO
Localisation
of IRO
Time horizon
of IRO
Pollution
Air pollution
Impact
Negative
impact
Own operations
and value chain
(downstream)
Long-term
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E2-1 POLICIES TO MANAGE ITS MATERIAL IMPACTS, RISKS AND
OPPORTUNITIES RELATED TO POLLUTION
GCP’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:
•
Metering and monitoring systems
•
High-energy efficiency systems
•
Renewable energy systems
•
Energy storage systems
•
Electric vehicle chargers wherever feasible
GCP 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. GCP 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 GCP’s Environmental and Energy Policy address the
material air pollution impacts that GCP has. These objectives ensure that GCP 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 GHG emissions contributing
to air pollution, ensuring that progress is being made towards reducing these impacts.
E2. IRO-1 DESCRIPTION OF THE PROCESSES TO IDENTIFY AND ASSESS
MATERIAL POLLUTION-RELATED IMPACTS, RISKS AND OPPORTUNITIES
Within GCP’s overarching goal of environmental protection, the Company considers
potential pollution impacts from its operations. The DMA reaffirmed that air pollution
is GCP’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.
GCP 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 GCP conducted extensive internal stakeholder engagement, direct consultation
with affected local communities was not part of this assessment process. The Company
primarily relied on operational teams’ 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 GCP’s operations but to energy power stations across Germany and the UK where
the Company operates predominantly. 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.
GCP 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 Company’s residential tenants. Therefore, it is GCP’s goal
to reduce fossil fuel energy and expand the share of renewable energy within its energy
consumption.
Table 25
Policy Title
Short Description
Reference
Title
Environmental and Energy Policy
GCP’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 GCP’s Environmental and Energy Policy includes energy,
water and waste. In terms of its reach, the policy applies globally to GCP, its subsidiaries and
affiliated companies. The policy was developed to reflect GCP’s commitment to environmental
stewardship and is therefore applicable to all of GCP’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 subsection E1-1, which can have co-benefits such
as reducing certain types of air pollution. GCP 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 subsection E1-6 – Gross Scopes 1, 2, 3 and Total
GHG emissions .These frameworks play a key role in supporting GCP’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, GCP
ensures a structured approach to monitoring, managing, and mitigating GHG emissions
generated by its asset portfolio, delineating responsibilities at the asset and company-
level between operations and Daily Management.
At the most senior level, the Daily Management, 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
GCP’s Environmental and Energy Policy aims to mitigate the negative impacts of air pollution by:
•
Reducing reliance on fossil fuels by increasing renewable energy sources and contracts
•
Increasing energy efficiency systems and initiatives
•
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 GCP 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 subsection E1-1 Transition
Plan, along with the key actions related to GHG emissions outlines in subsectionE1-3 of
this report.
As with the actions taken as part of our Climate Transition Plan, GCP 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
GCP has not established a specific target for air pollution prevention and control at this stage.
The Company’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, GCP refers to its CO₂e emissions reduction targets under subsection E1-
4, specifically the GHG emissions reduction target and accompanying methodological notes
sections, of this report, also contributing to air pollution reduction efforts.
Currently, GCP 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 Company 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 GCP’s side of
our energy and electricity providers.
GCP is not able to disclose amounts of each individual pollutant currently. While above-
mentioned constraints affect the accuracy and feasibility of precise reporting, the Company
remains committed to evaluating potential approaches for enhanced assessment and
disclosure in the future. Water and soil pollution are not material for GCP. 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. GCP takes significant steps to ensure that its work environment positively
impacts the health and wellbeing of its employees. Beyond this foundation, the Company
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. Our approach to workforce protection is outlined in the
following section.
GCP’s suite of social policies - including our Employee Code of Conduct, Diversity
Policy, Anti-Discrimination Policy, Human Rights Policy, Anti-Corruption Policy and
Whistleblowing Policy - enables us to effectively manage workforce-related impacts,
risks and opportunities. Designed with our employees’ interests in mind, these policies
apply across our entire workforce. They reinforce our 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 Company. The centralisation of our HR Department ensures
standardised processes and policies, optimising knowledge and talent utilization across
the organisation.
Standard
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 GCP are not covered in this report.
In some cases, GCP 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.
Table 26
Material sustainability matters covered in ESRS S1
Topic
Sub-topic
Materiality
(impact/
financial/
double)
Categorisa-
tion IRO
Localisa-
tion 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
Topic
Sub-topic
Materiality
(impact/
financial/
double)
Categorisa-
tion IRO
Localisa-
tion of IRO
Time
horizon
of IRO
Equal
treatment
and oppor-
tunities
for all
Gender
equality and
equal pay
Impact
Positive
Impact
Own
operations
Short-term /
Long-term
Training and
skills devel-
opment
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
GCP 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
GCP’s Double Materiality Assessment (DMA), employees directly identify areas of actual
or potential impacts and risks. The Company 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 analysed and
integrated into the Company’s operational processes and inform its strategic decision-
making. These insights influence GCP’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 GCP’s policies, refer to section G1-1 of this report.
Employees, views directly shape our workforce management strategies and inform
initiatives such as training and career development programmes, mental health and
well-being programmes, flexible work arrangements, and efforts to foster a culture of
inclusivity, fairness, and social responsibility in the workplace. The Company 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
Daily Management, with the support of the Human Resources department, 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
GCP’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. The
workforce can be engaged under permanent or temporary contracts, and in full-time
or part-time roles. Each plays a vital role in GCP operations and may experience varying
material impacts based on their employment structure and functions. Refer to section
S1-6 for detailed GCP employees’ composition and characteristics.
Material Impacts & Risks of GCP’s Operations on Workforce
GCP recognises that its employees can be materially impacted by the Company’s business
activities and relationships. Therefore, these impacts are fully covered within the scope
of GCP’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 26 for a full list of impacts, risks and opportunities (IRO)
relating to the Company’s own workforce.
GCP understands that its material negative impacts could either be systemic or widespread,
where it relates to issues peculiar to a specific country or region, for example, forced
or compulsory labour and child labour; 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 the
Company has over market forces, stakeholders emphasise 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 company with employees from approximately 44 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 emphasising 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, with the exception of potential health and
safety risks for facility management roles due to the physical nature of their work.
Employees can freely identify and report any unsafe working conditions, accidents, safety
requirement, including other labour and human right violations in the workplace through
the Whistleblowing system, and to the relevant departments including compliance and
human resources, and appropriate actions would be taken. Refer to section S1-3 for
details on available complaints mechanisms.
Addressing Potential Negative Impacts & Promoting Good Working Conditions
GCP’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 benefit the Company by reducing turnover costs, increasing
productivity, and improving profitability. GCP 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 GCP Arising from Impacts and Dependencies
on Workforce
Conversely, GCP recognises 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 labour, 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
the workforce to similar future risks, with the potential of causing increased absenteeism
and disruptions in property management and leasing operations.
Furthermore, employees’ compliance with labour 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, GCP 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 GCP has not yet identified specific impacts of the transition to greener and low-
carbon operations on employees, the Company 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.
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Consolidated Sustainability Statement
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S1-1 – POLICIES RELATED TO OWN WORKFORCE
GCP has established policies to address various aspects of workplace operations
as presented in Table 27. 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 27
Policy Title
Short Description
Employee Code
of Conduct
Defines ethical and behavioural standards expected of GCP’s employees, ensuring equal
opportunity and a workplace free from discrimination and harassment. It emphasises a
safe, healthy, and inclusive work environment, upholds anti-corruption principles, and
safeguards employees’ personal data and confidentiality. The Compliance Manager,
supported by department and division heads, oversees policy implementation.
Employees can access the policy via the Company’s website and intranet.
Diversity 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 oversee the implementation and integration of
diversity initiatives across the Company. The policy is accessible to all employees via
the Company’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 HR 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 Company’s website and intranet.
Human Rights
Policy
Ensures respect for fundamental human and labour rights including fostering a
workplace free from forced labour, child labour, and exploitation. It reinforces the
Company’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 Daily Management and Chief Compliance Officer oversee
its implementation. The policy applies to all employees and stakeholders and is
accessible via the Company’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 Daily
management, oversees policy implementation, and ensures adherence. It is accessible
to all employees via the Company’s intranet.
Policy Title
Short Description
Whistleblowing
Policy
Provides secure and confidential mechanisms for employees, stakeholders and
impacted communities to report compliance violations, unethical behaviour 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 Company’s internal procedure and to the extent
permitted by statutory law. Employees can access the policy and the link to the
Whistleblower (BKMS) systems via the Company’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, oversees its implementation. The policy is accessible to all
employees via the Company’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 unauthorised access, breaches, and misuse.
They apply to all employees, suppliers, and third parties handling company or
customer data. The Chief Information Security Officer (CISO) is responsible for the
communication and implementation of the policies and are accessible to employees
via the Company’s intranet.
Protection of Human Rights and Ethical Labor Practices
No material risks relating to forced and child labour were identified in the DMA. GCP
operates within the European Union and the United Kingdom, where strong human
rights regulations and labour protections minimise the risk of forced or compulsory
labour and child labour across its operations. Additionally, the Company 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 Company is strongly committed to upholding human and labour 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. GCP’s Human Rights Policy
explicitly prohibits child labour and forced labour as well as modern slavery and human
trafficking.
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Occupational Safety Commitment
GCP’s Occupational Health and Safety (OHS) Policy underscores our 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 minimise risks and
safeguard the health and safety of all employees.
Commitment to Diversity and Non-Discrimination
GCP is committed to promoting a fair, inclusive, and equitable workplace. Preventing and
eliminating discrimination is one of the cornerstones of the Company’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 labour 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 direct or indirect. 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. GCP is committed to taking
appropriate actions to address and protect individuals affected by discrimination. The Company’s
performance on discrimination and other human rights issues are summarised in section S1-17.
The Diversity Policy is closely linked to the anti-discrimination policy. It was last updated in
2020 and is aimed at promoting an inclusive workplace through initiatives such as cultural
diversity programmes, mentoring, and flexible working arrangements. These initiatives
are overseen by the Diversity Committee, which comprises employee representatives from
different organisational levels 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
GCP actively integrates employees’ perspectives into its decision-making processes to
enhance inclusivity and workplace satisfaction. Employee engagements follow a structured,
corporate-level approach involving various methods. The annual employee satisfaction
survey remains the Company’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 forum to review key topics such as work-
life balance, professional development, and inclusivity, but also, an opportunity 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 Daily Management about the Company’s projects and programmes
as well as insights into the future of the Company, including participation in a Q&A session.
These engagements support every stage of the Company’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 Company.
Additionally, in October 2024, GCP launched the second round of the “Activate the Base”
programme. 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 Company and their own self
development. While the results from the employee-proposed sustainability initiatives will only
be visible in 2025, the programme is already fostering a culture of innovation and engagement.
Effectiveness of Employee Engagement and Feedback Analysis
The effectiveness of our 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 company’s updates effectively
and in a timely manner. Feedback from both the survey and the roundtable discussions are
systematically analysed to track engagement trends and identify areas for improvements.
The Company’s Head of HR oversees these initiatives, ensuring that employee 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 Company.
On the other hand, GCP recognises and respects employees’ rights to establish and join
trade unions and to engage in collective bargaining. These fundamental rights are explicit
in the Company’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 Company.
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S1-3 – REMEDIATION OF NEGATIVE IMPACTS ON OWN WORKFORCE
Complaints Mechanisms
The Company is committed 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 labour rights. GCP’s Whistleblowing Policy describes the procedures for a secure and
confidential reporting of unethical behaviour 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
GCP’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 Company’s Investigation Policy.
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, GCP may require business partners to implement corrective measures within
a set timeframe. If violations persist, GCP reserves the right to terminate the business
relationship. The Company 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 Daily Management, 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,
GCP ensures all employees receive mandatory training on human and labour rights including
on diversity and anti-discrimination. The trainings are mainly conducted on the Welcome
Days and through the Company’s E-learning platform, accessible via the Company’s intranet.
Besides the strict requirement of employees to uphold the values and principles promoted in
the various trainings, GCP 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 to ensure continuous improvement.
S1-4 – MANAGING MATERIAL IMPACTS, RISKS AND OPPORTUNITIES
RELATING TO OWN WORKFORCE
Minimising Negative Workforce Impacts and Ensuring Responsible Practices
GCP 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. The
Company adheres to strict labour 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, minimising potential harm
to themselves and others. In procurement, GCP 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 the employees’
working conditions.
When tensions arise between mitigating material negative impacts and business pressures,
GCP prioritises 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.
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Consolidated Sustainability Statement
105
Initiatives to Drive Positive Workforce Impacts
GCP 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 GCP’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.
Table 28
Impact
Initiatives for Positive Impacts
Violence &
Harassment
Prevention; Social
Dialogue, Freedom
of Association
•
Whistleblowing 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 ask questions
and engage 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 programmes: focusing on GCP’s widely spoken languages,
English and German, is aimed at promoting effective communication and
collaboration among employees, including tearing down cultural barriers,
minimising misunderstandings, build trust and foster an inclusive workplace. In
addition, a half-day training on intercultural communication is organised 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): promotes work-life-
balance, improve job satisfaction and reduce stress.
•
Mental health programmes: support emotional well-being, leading to increased
productivity and lower turnover rates.
•
Time tracking implementation via an HR data management tool & 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 AT and GCP employees, thereby
promoting flexibility and well-being.
•
Ticket giveaways (77 events, 869 tickets in 2024): enhances employee engagement,
promotes leisure and rewards contributions to company success.
Impact
Initiatives for Positive Impacts
Health & Safety
•
Internal OHS risk assessments: identify and mitigate workplace hazards, ensuring
a safer work environment.
•
Emergency preparedness drills: improves readiness for unexpected incidents,
safeguarding employee well-being.
•
Workplace safety training: educates employees on proper safety protocols to
minimise workplace accidents.
•
Gym for employees at the Berlin headquarters and access to a health and
wellbeing subscription service platform, which includes gym subscription,
subsidised by the Company for all employees in Germany: promoting employees
physical and mental fitness.
•
Flu & COVID vaccinations, workplace eye exams and health checks: promotes
employee health and reduces absenteeism due to illness.
•
Collaboration with a virtual platform offering virtual sports and mental health
prevention courses, etc.
Training & Skills
Development
•
Leadership training: equipping the Company’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
employee 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” programme: encouraging employees to implement their own
sustainability projects while receiving guidance from external coach
Secure Employment;
Adequate Wage
•
Apprenticeship programme: 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 company.
•
Mentoring and coaching programme: offers personalized development support,
enhancing leadership and career progression.
Privacy
•
Annual GDPR training: ensures employees understand data protection
regulations, enhancing compliance.
•
Cybersecurity protocols: protects sensitive company and employee information
from cyber threats.
•
Data encryption measures: secure personal and company data, ensuring privacy
and confidentiality.
•
Awareness Days: a two-day event that raises awareness on activities of various
departments in the company and promotes data and information security.
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Evaluation of Initiatives & Improvements
GCP 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 and Compliance
departments continuously monitor alignment with evolving labour 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, GCP’s
participation in external ESG ratings and benchmarking allows for comparison with industry
peers and learning. Continuous impact evaluations fosters a resilient and future-proof
workforce in the Company.
Resource Allocation for Managing Workforce Impacts
The Company dedicates significant financial, technological, and human resources to
proactively managing material impacts on own workforce. Each of the initiatives documented
in Table 28 requires reasonable amount of resources to implement.
The Human Resources
department invest in tools and creation of learning material for workforce training and
development programmes, 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 channelled into enhancing workplace safety and
health programmes. Similarly, protecting workforce data privacy necessitates substantial
investment in IT and cybersecurity infrastructure and programmes, 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 recognised but not yet established.
However, should such risk become eminent, the Company 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 Company remains committed to
adapting its strategies to ensure these impacts are effectively mitigated.
S1-5 TARGETS RELATED TO MANAGING MATERIAL IMPACTS, RISKS AND
OPPORTUNITIES
The Company sets targets through a structured process based on internal policies, strategic
priorities, regulatory requirements, and operational needs, incorporating direct engagement
with its workforce. Aſter careful assessment at the departmental level, targets are reviewed
and approved by Daily Management 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 recognised 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
•
Be among the top ten most attractive employers in the residential real estate sector by 2030
•
Maintain the total number of confirmed cases of discrimination under 3%
•
Offer a minimum of 12hrs of training and development opportunities per FTE
2025 Goals
•
Continue to offer our volunteering programme organised as a company-wide Social
Day for employees
•
Increase health measurements and services offers for employees, including mental
health such as psychological support
•
Expand our 180-degree surveys to 100% of our workforce to encourage self-
development among employees
•
Complete the implementation of our newly developed staff career path to create
more transparency on development opportunities
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Consolidated Sustainability Statement
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Metric: Our Workforce
GCP monitors and measures a series of metrics to help understand progress in topics relating
to its workforce. The scope of this metrics covers all GCP’s employees, as presented in
organisational boundaries presented under Methodology and EPRA sBPR Data Preparation
Notes. Data is collected through various regional offices and subsequently exported to the
Personnel Management System (PMS) where available, or directly to the payroll systems.
The Human Resources Department centrally consolidates and evaluates employee data.
GCP 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 GCP. The Company 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 836 in these S1-6 disclosures is
not directly included in the financial statements, however the most representative number
contained there is the total FTE figure of 769 for the financial year reported on p. 212.
Table 29
Employee Headcount
Metric
2024
2023
Number
Percentage
Number
Percentage
Total
836
100.0%
843
100.0%
Male
432
51.7%
415
49.2%
Female
404
48.3%
428
50.8%
Age group <30
144
17.2%
155
18.4%
Age group
≥
30 - < 50
504
60.3%
508
60.3%
Age group
≥
50
188
22.5%
180
21.4%
Employee Headcount by Geography
Metric
2024
2023
Number
Percentage
Number
Percentage
Germany
756
90.4%
769
91.20%
Male
386
51.1%
376
48.9%
Female
370
48.9%
393
51.1%
United Kingdom
63
7.5%
58
6.9%
Others
17
2.0%
16
1.9%
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
70.8%
66.4%
72.0%
65.2%
Romania
8.7%
0.8%
7.2%
0.9%
United Kingdom
6.7%
10.9%
5.9%
10.7%
Israel
2.4%
8.4%
2.5%
8.9%
Others
11.4%
13.5%
12.4%
14.3%
No. of
nationalities
(incl. Germany)
44
48
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Table 30
Employee Headcount by Contract Type
Metric
2024
2023
Number
Percentage
Number
Percentage
Permanent
employees
who identify
as female
315
51%
329
54%
Permanent
employees who
identify as male
299
49%
277
46%
Permanent
employees who
identify as 'other'
0
0%
0
0%
Temporary
employees
who identify
as female
89
40%
99
42%
Temporary
employees who
identify as male
133
60%
138
58%
Temporary
employees which
identify as 'other'
0
0%
0
0%
Non-guaranteed
hours employees
who identify as
female
1
33%
2
50%
Non-guaranteed
hours employees
who identify as
male
2
67%
2
50%
Non-guaranteed
hours employees
who identify as
'other'
0
0%
0
0%
Table 31
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
170
100.0%
186
22.1%
Female
67
39.4%
86
46.2%
Male
103
60.6%
100
53.8%
Age group
<30
65
38.2%
71
38.2%
Age group
≥
30 - < 50
87
51.2%
88
47.3%
Age group
≥
50
18
10.6%
27
14.5%
Open positions
filled by
internal
candidates
(internal hires)
66
28.0%
58
23.8%
Average
amount (€)
Average hiring
cost/FTE
359.9
N/A
600.8
N/A
Total
number
and rate of
employee
turnover
Employee
turnover
167
16.8%
208
19.8%
Female
84
50.3%
88
42.3%
Male
83
49.7%
120
57.7%
Age group
<30
54
32.3%
54
26.0%
Age group
≥
30 - < 50
84
50.3%
116
55.8%
Age group
≥
50
29
17.4%
38
18.3%
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Table 31
Hiring and Turnover metrics
Units of
Measure
Metric
2024
2023
Number
Percentage
Number
Percentage
Total
number
and rate of
employee
turnover
Employee
initiated
turnover
106
10.7%
149
14.2%
Female
55
51.9%
63
42.3%
Male
51
48.1%
86
57.7%
Age group
<30
36
34.0%
36
24.2%
Age group
≥
30 - < 50
55
51.9%
91
61.1%
Age group
≥
50
15
14.2%
22
14.8%
S1-9 – DIVERSITY METRICS
Table 32 presents the representation of male, female, and other employees across various
levels of the Company, highlighting key areas of specialisation and the inclusion of employees
with disabilities.
Table 32
Diversity metrics
EPRA Code
Units of
Measure
Metric
2024
2023
Diversity-
Emp
% of
employees
who identify
Female (Board
of Directors)
40.0%
33%
Male (Board
of Directors)
60.0%
67%
Female (top
management)
(*)
22.2%
30%
Table 32
Diversity metrics
EPRA Code
Units of
Measure
Metric
2024
2023
Diversity-
Emp
% of
employees
who identify
Male (top
management)
77.8%
70%
Female (senior
management)
(1)
41.9%
37%
Male (senior
management)
58.1%
63%
Female (junior
management)
(2)
44.9%
47%
Male (junior
management)
55.1%
53%
Female (all
management)
(3)
42.4%
43%
Male (all
management)
57.6%
57%
Female employees
(revenue generating
management
functions)
43.8%
43%
Male (revenue
generating
management
functions)
56.2%
57%
Female (STEM-related
positions)
10.5%
16%
Male (STEM-related
positions)
89.5%
84%
S1-12
Percentage (%)
Employees with
disabilities
2.8%
2.0%
1)
includes Heads of Departments
2)
includes Team Leads
3)
includes junior, senior and top managements
(*)
includes the Daily Management, international executives and other top managers (i.e. Managing Directors, multi-department leaders)
GRAND CITY PROPERTIES S.A.
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S1-10 – ADEQUATE WAGES
All employees of the Company are paid an adequate wage, in line with applicable national
benchmarks.
S1-11
SOCIAL PROTECTION
Across all GCP 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, GCP operations in:
•
Germany offers a company pension scheme, in compliance with state regulations,
through an external insurance provider with employer contributions.
•
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
GCP considers continuous investment in training and development of its employees
essential for both personal and professional development, fostering business resilience,
innovation, engagement, and long-term retention. The Company’s performance is shown
in the table below:
Table 33
Training and Skills Development metrics
EPRA Code
Units of
Measure
Metric
2024
2023
Emp-Dev
% of total
workforce
% of total employees who
received regular performance
and career development reviews
during the reporting period
47.3%
29.6%
Emp-
Training
Average
number
of training
hours
All employees
12.9
14.2
Female
15.5
16.7
Male
10.5
11.8
Management
22.9
21.3
Female
29.8
26.5
Male
17.9
17.5
Non-management
14.2
17.2
Female
17.1
19.4
Male
11.4
14.8
Part-time employees
12.5
12.0
FTE employees
17.0
18.7
Average
amount (€)
Average investment in
training per FTE
667
638
N/A
Percentage
(%)
Percentage of FTEs that
participated in leadership
development programme
2.4%
1.4%
Percentage of FTEs that
participated in language
programme
9.5%
16.8%
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S1-14 – HEALTH AND SAFETY METRICS
All employees of GCP are covered by the Company’s health and safety management system
based on legal requirements. GCP performance on maintaining the health and safety of our
employees within its work environment is shown in Table 34 below:
All our health and safety metrics are calculated based on employee Full-Time Equivalents
(FTE). Below are the details of each individual metric:
•
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 GCP offices.
•
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 GCP
Table 34
Health and Safety metrics
EPRA Code
Units of
Measure
Metric
2024
2023
H&S-Emp
Number of injuries/accidents
per total time worked
Injury/accident rate
0.000004
0.000006
Number of injuries per
million hours worked
Lost-Time Injury
Frequency Rate
(LTIFR)
4.4
5.6
Number of days lost per
total time worked
Lost day rate
0.00009
0.0004
Number of days lost per total
days scheduled to be worked
by employees
Absentee rate
6.1
5.5
(*)
Number of fatalities
Work-related
fatalities
0
0
N/A
Number of injuries/accidents
Recordable work-
related injuries/
accidents for own
workforce
6
8
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 GCP employees. It allows employees to
maintain a healthy balance between professional and personal life, reducing stress, and
enhancing overall well-being. GCP actively track this metric, as shown in Table 35 below,
reinforcing its commitment to fostering a supportive and balanced work environment.
Table 35
Work-life Balance metrics
2024
2023
(*)
Number
Percentage
Number
Percentage
Employees that took
family-related leave
100
12.0%
N/A
N/A
Female
78
19.3%
N/A
N/A
Male
22
5.1%
N/A
N/A
(*)
2023 figure is restated due to a change in the calculation methodology
(*)
this indicator is not applicable to 2023 as it is being tracked for the first time in 2024 in compliance with ESRS
country of operation (e.g., 7.5 hours per FTE in the UK and 8 hours per FTE in other
locations).
•
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.
•
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.
•
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 of the Company.
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S1-17 – INCIDENTS, COMPLAINTS AND SEVERE HUMAN RIGHTS IMPACTS
GCP monitor and report human rights issues and incidents in the workplace, ensuring
accountability and compliance, as shown in Table 37.
Table 37
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
(*)
it was calculated as the ratio of female to male pay gap in 2023. To fully align to EPRA 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 36 presents the gender pay gap among GCP 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 Company closely monitors and reports these
differences 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 36
Gender Pay Gap
Metric
Description
ESRS (%)
EPRA (ratio)
2024
2023
2024
2023
(*)
Remuneration
(salary and
bonus)
Pay Gap
Executive
72.0%
36.0%
3.6
1.6
Management
4.4%
13.8%
1.0
1.2
Non-management
8.7%
9.7%
1.1
1.1
All employees
23.4%
17.4%
1.3
1.2
Salary Pay
Gap
Executive
45.9%
39.6%
1.9
1.7
Management
5.3%
13.2%
1.1
1.2
Non-management
8.8%
9.9%
1.1
1.1
All employees
14.4%
16.5%
1.2
1.2
Total
compensation
ratio
Ratio of the highest
paid individual to the
median annual total
compensation for all
employees (excluding
the highest paid
individual)
77.3
17.4
77.3
17.4
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IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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.
The following table outlines material sustainability matters in ESRS S2:
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.
ESRS S2 Workers in the Value Chain
INTRODUCTION
At GCP we are committed to upholding high standards of social responsibility and ethical
conduct across our operations and supply chain, and we recognise 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 labour. 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, GCP 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.
High-level overview of disclosure
Standard
Indicator
ESRS S2
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
Table 38
Material sustainability matters covered in ESRS S2
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorisation
IRO
Localisation
of IRO
Time
horizon
of IRO
Working
conditions
Secure
employment
Impact
Positive
impact
Value chain
(upstream)
Short-term /
Long-term
Working
time
Impact
Positive
impact
Value chain
(upstream)
Short-term /
Long-term
Adequate
wages
Impact
Positive
impact
Value chain
(upstream)
Short-term /
Long-term
Health and
safety
Impact
Positive
impact
Value chain
(upstream)
Short-term /
Long-term
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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 GCP - 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 regard to working conditions
of value chain workers, focused on secure employment, working time, adequate wages and
health & safety, are mostly connected to GCP’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 GCP aims to ensure suppliers’ compliance with its policies that address
adherence to fair and safe working conditions, monitors suppliers’ treatment of workers
in due diligence processes and by providing reporting channels for potential issues, the
Company 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 labour rights concerns.
GCP 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:
•
Health & Safety Hazards:
Exposure to hazardous materials and unsafe working
conditions may lead to accidents, legal liabilities, and reputational damage.
•
Labor Rights Compliance:
Subcontractors operate independently, making oversight
of fair wages, working hours, and job security more challenging. Non-compliance
with labour standards could result in regulatory penalties or project delays.
•
Supply Chain Vulnerabilities:
Dependence on subcontractors increases exposure to
workforce disruptions due to poor employment conditions or non-compliance issues.
Key opportunities:
•
Sustainable Workforce Practices:
Implementing due diligence procedures and
policies for subcontractors can improve worker conditions, reduce risks and enhance
brand reputation.
•
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.
•
Competitive Advantage:
A strong commitment to fair labour 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 capitalise on opportunities:
•
Supply Chain Risk Management:
Conducting due diligence on subcontractors before
engagement ensures compliance with labour rights and health & safety standards.
•
Policy Enforcement:
Implementing strict contractual obligations for subcontractors
to adhere to fair wages, working hours, and safety measures.
•
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.
Value Chain Workers Affected by GCP’s Operations
The following categories of GCP’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
Company’s construction site but who are not part of GCP’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 labour standards by
contractors. These potential impacts have been identified through GCP’s Supply Chain
Risk Assessment and are addressed by the Company’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 GCP’s
direct oversight, their workers may be more vulnerable to potential negative impacts,
particularly regarding fair working conditions and labour rights compliance.
(*)
GCP’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 labour, forced labour, or compulsory labour. There is no significant risk of such
labour practices within GCP’s value chain in Europe
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2. Property Maintenance and Facility Management Personnel
Workers responsible for cleaning, landscaping, pest control, and general property upkeep.
These are workers working at the Company’s assets but are not part of GCP’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 GCP’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 Company’s
upstream value chain. However, as such companies are mostly owned and run by local
governments and are highly regulated companies, the risks can be considered as minor.
4. Material and Equipment Suppliers
These are workers working for entities in the Company’s upstream value chain, who
resource, produce or deliver construction materials, furniture, or technology solutions
for GCP properties. They may be potentially subject to forced labour or poor workplace
conditions, depending on where the material and products are sourced and manufactured.
GCP 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 Grand City Properties 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:
GCP’s Human Rights Policy and BPCoC outline the Company’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, GCP provides a Whistleblower 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 Company’s internal Whistleblower Policy and can be accessed via GCP’s
website. Besides providing guidance on what issues are relevant to report according to
GCP’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, GCP aims to foster fair
practices and a collaborative approach to labour rights across its value chain.
Through these policies, GCP 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 labour rights violations.
GCP adheres to internationally recognised frameworks to guide the implementation of
its policies, including:
•
Ten Principles of the UN Global Compact
•
International Labour Organization (ILO) Core Conventions
•
OECD Guidelines for Multinational Enterprises
•
UN Guiding Principles on Business and Human Rights (UNGPs)
These frameworks provide essential guidance in shaping GCP’s policies related to
value chain workers, ensuring a structured approach to managing human rights risks,
protecting labour rights, and promoting ethical business conduct.
Table 39
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 to tenants and workers in the supply chain. The
policy further emphasises its zero-tolerance approach to modern slavery, human trafficking
and forced labour and outlines its application for business partners and reporting and
monitoring of potential violations.
Business Partner
Code of Conduct
(BPCoC)
The BPCoC extends GCP’s human rights commitments to suppliers, contractors, and business
partners,
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 labour and forced labour and addresses precarious work
by requiring compliance with applicable labour laws. Aligns with applicable ILO standards.
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Consolidated Sustainability Statement
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Scope and Responsibility of the Policies
The scope of GCP’s Human Rights Policy and its BPCoC encompasses ethical labour
practices, human rights protections, and responsible business conduct across the entire
value chain. These policies apply globally to GCP, its subsidiaries, affiliated companies,
and all business partners. Developed to reflect GCP’s commitment to upholding human
rights and ethical business practices, these policies apply to all employees, contractors,
and partners engaged in GCP’s operations.
The Daily Management 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 labour practices, and
responsible supply chain management.
Commitments and Approach to Human Rights Relevant to Value Chain Workers
GCP 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 Whistleblower System. Our Human
Rights Policy was established in accordance with internationally recognised human
rights 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 must be signed by our business partners and requires compliance
with internationally recognised labour and human rights principles, ensuring responsible
business conduct throughout GCP’s operations and supply chain.
To ensure GCP’s human rights policy framework is translated into practice and
implemented at every level of the business and integrated into business relationships
with suppliers, GCP’s approach encompasses a number of actions listed below.
Creating Awareness and Human Rights Trainings
Within its own operations, GCP ensures that employees respect human rights,
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 GCP’s own operations.
Business Partner Code of Conduct
When it comes to working with suppliers in the value chain on adherence with human
rights, GCP 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 GCP’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, GCP
conducts a human rights due diligence procedure (“HRDD”) on high-risk suppliers. These
are categorised 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 categorised as low, medium, or high-risk based on their contract volume with GCP,
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, GCP requires additional
documentation regarding sustainability-linked topics, including human rights. 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.
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 GCP. Ongoing monitoring and assessment ensure
that suppliers adhere to working conditions, wages, and health and safety regulations.
Furthermore, to ensure that GCP’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 Company 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.
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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 guidance on the implementation of a HRDD procedure, two criteria
determine that compliance with the safeguards was established:
1.
That the Company has established adequate human rights due diligence (HRDD)
processes, as outlined in the UNGPs and OECD Guidelines for Multi-national
Enterprises (MNE).
2.
That there are no indications that the Company does not adequately implement HRDD,
resulting in human rights abuses.
GCP fulfils these criteria.
Reporting via the Whistleblowing System
Should an incident reported via the Company’s Whistleblowing System, or directly
with GCP’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 internal 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. GCP may
also decide to consult with authorities if necessary.
Stated in the Company’s internal Whistleblower Policy, as far as the whistleblower can
be contacted by GCP, the whistleblower will receive information about the ongoing
process, the progress 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, GCP maintains open communication channels with value chain workers
regarding labour rights and ethical practices across its operations. This engagement
primarily occurs during the initial business relationship establishment, where suppliers
acknowledge GCP standards and values as outlined in the BPCoC.
Zero-Tolerance Approach to Forced and Child Labour
GCP enforces a zero-tolerance approach to human trafficking, forced and compulsory
labour, and child labour. These issues are explicitly addressed in the Human Rights
Policy, which covers all three topics and extends to value chain workers. Additionally,
GCP’s BPCoC, which must be signed by suppliers and business partners with contacts
exceeding €5,000, explicitly prohibits child labour and compulsory labour. 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 GCP operates.
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
GCP’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 GCP.
2.
Human Rights Due Diligence Process: Due diligence on high-risk suppliers allows GCP
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: GCP 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 GCP’s values.
GCP 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 (KYB), Business
Partner, Operation and Construction teams collaborate to implement and enhance
existing processes. Aligning with national and international standards and regulations,
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such as the German Supply Chain Act (LkSG) or the upcoming European Corporate
Sustainability Due Diligence Directive, allows GCP 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. GCP is currently reviewing supply chain
management tools for potential implementation. These improvements aim to
streamline communication and engagement with business partners regarding
the Company’s human rights policy and standards, ultimately strengthening
compliance and reducing risks of workers’ rights violation.
GCP’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 Company’s
ongoing operational activities and, therefore, do not have a defined completion date.
Implementation is continuous and integrated into the Company’s broader strategy.
In 2024, no severe human rights issues or incidents connected to workers in the value
chain were reported to GCP.
Dedicated Resources
GCP 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 Company’s ongoing
operational activities, and this information is not tracked at the required level of detail
at this stage. GCP 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, GCP 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 Company has
currently not implemented further assessments or monitoring in how far these actions
are effective in delivering the intended outcome for value chain workers.
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 the BPCoC,
supported by the 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 Company’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 labour 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 Company’s policies with the German Supply Chain Act to strengthen due
diligence procedures and ethical oversight across the Company’s value chain.
The process for setting targets involves multiple levels of engagement across the value
chain. GCP defines its targets based on internal assessments, regulatory requirements,
and stakeholder feedback. While direct engagement with workers in the value chain or
Table 40
Long-term targets
2024 Targets
2024 Progress
2025 Target
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
Company’s
policies
with the Supply Chain
Act in Germany and
initiate possible
changes to ensure
compliance
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their representatives is currently not a formalised 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_14 for more information.
The Company aims to maintain zero human rights violations in the supply chain referring to
the first reporting year, 2024, as the baseline year, and to ensure thorough business partner
scrutiny by following best practices, including guidance on the German Supply Chain Act
which is currently not mandatory for GCP, which a long-term commitment to compliance.
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ESRS S3 Affected Communities
INTRODUCTION
GCP recognises that its operations impact not only its tenants, but the broader communities
residing around its properties, who may be directly or indirectly be affected. As a result, the
Company takes a holistic approach in ensuring positive social impacts in the communities
where it operates.
The Company actively engages with affected communities to integrate their needs into
its strategic and operational decisions. GCP’s approach is guided by the Community
Involvement and Development Guidelines, which outline, inter alia, it’s commitment
to making a meaningful impact on local communities. The guidelines establish a clear
framework for community relationship management, emphasising proactive engagement,
strategic planning, and accountability.
This disclosure outlines the Company’s approach and efforts in addressing its impacts
on affected communities, focusing on balancing our economic objectives with social
responsibilities.
High-level overview of disclosure
Standard
Indicator
ESRS S3
Affected
Communities
S3. SBM-2 Interests and views of stakeholders
S3. SBM-3 – Material impacts, risks and opportunities and their interaction
with strategy and business model
S3-1 - Policies Governing Affected Communities
S3-2 – Processes for engaging with affected communities about impacts
S3-4 – Taking action on material impacts on affected communities, and
approaches to managing material risks and pursuing material opportunities
related to affected communities, and effectiveness of those actions
S3-5 – Targets related to managing material negative impacts, advancing
positive impacts, and managing material risks and opportunities
IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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.
S3. SBM-2 INTERESTS AND VIEWS OF STAKEHOLDERS
For a more detailed overview of how stakeholder interests and views are integrated into
decision-making, refer to ESRS 2, section SBM-2.
S3. SBM-3 MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND
THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL
Engagement with Stakeholders: Understanding Interests and Perspectives
GCP recognises the importance of stakeholder engagement in shaping its business
model and sustainability strategy. Maintaining open and ongoing dialogue with affected
communities, tenants, local authorities, and business partners allows the Company to
align its operations with stakeholders’ expectations and societal needs.
Inclusion of Affected Communities in the Scope of Disclosure
GCP ensures that all affected communities likely to experience material impacts from
its operations are included within the scope of its disclosures under ESRS 2. This
Table 41
Material sustainability matters covered in ESRS S3
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorisation
IRO
Localisation
of IRO
Time
horizon
of IRO
Communities’
economic,
social and
cultural rights
Adequate
housing
Double
Positive
impact/
Opportunity
Own
operations and
Value chain
(downstream)
Short-term/
Long-term
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comprehensive approach considered communities impacted through the Company’s own
activities, as well as those affected by its value chain, services, and business relationships.
Materiality is assessed based on environmental, social, and economic factors to identify
and mitigate potential risks while maximising positive contributions.
Types of Affected Communities and Potential Impacts
Given GCP’s primary business activities in residential real estate, including the provision
of affordable housing in densely populated areas across Germany and London, the key
affected communities are:
•
Residents and tenants: GCP’s tenants, Low-income individuals, including those
eligible for social housing, as well as middle-class residents.
•
Local communities: Neighbouring residents, small businesses and retail operating
within the neighbourhoods of GCP’s assets, which depend on stable housing markets
and local infrastructure.
•
Public Authorities and Local Organisations: Those reliant on public facilities and
urban services impacted by GCP’s developments.
While GCP has not identified any significant material upstream impacts, the Company
acknowledges that certain supply chain activities - such as material sourcing, logistics,
and waste management - may indirectly affects communities near supplier facilities, waste
sites, and urban regeneration areas. As part of its responsible business practices, GCP
continues to assess these potential impacts and explore appropriate mitigation strategies.
Material Impacts
Following an extensive DMA process conducted in 2024, GCP and its stakeholders
determined that the Company’s primary impact on affected communities is overwhelmingly
positive, particularly in terms of providing non-luxury and affordable housing. As no
material negative impacts or risks were identified during this assessment, GCP does not
report any material negative impacts for the current reporting period.
GCP’s commitment to aligning its business operations with the needs of local communities
continues to drive positive social and economic outcomes. As highlighted in the DMA, the
Company fosters resilient, inclusive, and sustainable communities through its housing
initiatives, infrastructural investments, and sustainability-driven projects.
For more information on interests and views of stakeholders, including affected
communities, please see ESRS 2 section SBM-2.
Housing Access and Affordability
GCP plays a crucial role in expanding access to affordable housing solutions across its
markets. In the United Kingdom, the Company collaborates with a third-party organisation
that coordinates with local authorities, housing associations, and charities to provide safe
and affordable accommodation for low-income households, including those in temporary or
emergency housing. Rental rates for these properties are linked to the Local Housing Allowance
(LHA), with annual rent adjustments based on government-determined LHA increases.
To balance housing affordability with responsible asset modernisation, GCP ensures that
any modernisation-related cost allocations remain fair and reasonable. The Rent Control
and Increase Department closely monitors market conditions and regulatory developments
to determine appropriate cost-sharing arrangements and, where necessary, grant rent
increase waivers for modernisation expenses. The Company also considers hardship
applications from tenants adversely affected by rent adjustments.
In Germany, GCP adheres to relevant regulations such as the German Housing Allowance
Act (
Wohngeldgesetz
), which supports access to subsidised housing for eligible residents.
The Company also complies with section 559 of the German Civil Code (BGB), which governs
rent increases following modernisation measures, ensuring that residential upgrades
enhance living conditions without imposing excessive financial burdens on tenants.
Property Management and Infrastructure Improvement
GCP’s property management and refurbishment projects drive community development by
creating employment opportunities and promoting sustainability. Investments in construction,
and renovation projects support local contractors, service providers, and workers, thereby
strengthening the local economy.
Sustainability-focused initiatives, include energy efficiency upgrades, reduction of GHG
emissions, improvement of air quality, and promotion of resource conservation.
Assessing Housing Affordability: GCP’s Approach to Rental Cost Burden and
Modernisation Impact
In order to understand the affordability of its properties, GCP has developed a “rental
cost burden” metric, which was modelled on Eurostat’s housing cost overburden rate.
GCP’s median rent in its managed German portfolio is compared against the net minimum
wage salary in Germany aſter taxes, health insurance, and social security contributions.
The Company considers this as an adequately conservative benchmark, targeting the
lowest-income portion of the population most sensitive to rent affordability. The metric
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distinguishes between net rent, which is determined by the Company, and the “warm
rent”, which includes service charges beyond the Company’s control.
GCP also tracks the average modernisation cost allocation for German residential properties,
comparing it with the legally permitted allocation under German law. Additionally, the
Company monitors the number of hardship cases received relative to the total units
modernised and are subject to rent increase. The low number of hardship applications in
2024 reflects GCP’s targeted approach to modernisation and its careful consideration of
rent increases to ensure affordability.
GCP’s vacancy rate also serves as an additional indicator for assessing the overall affordability
of its assets.
These metrics are guided by regulatory requirements, economic and market analysis
and undergo internal validation by relevant departments, including the Rent Control and
Increase Department, and Compliance Department.
GCP’s Risks and Opportunities Arising from Impacts and Dependencies on
Affected Community
GCP recognises the risks and opportunities arising from impacts and dependencies on
affected communities and proactively works towards achieving positive outcomes.
The Company could face operational risks such as potential community resistance.
Local residents and other stakeholders in the community may raise objections to project
implementations due to concerns about gentrification, strain on infrastructures and social
services such as transportation, healthcare, and community services. These objections can
also lead to project delays, increased costs, and reputational risks for GCP. Since the Company
engages proactively with affected communities, ensuring transparency and alignment with
local priorities, the probability of these risks happening is low across its activities.
Socially vulnerable groups, including elderly residents, disabled individuals, and low-income
households, may struggle to comply with the Company’s rental conditions resulting from
modernisation-rent increases and worsening economic situation, leading to affordability
pressures, and increased vacancy rates. Although, there is insignificant evidence associated
with this scenario, given the outcomes of our assessment parameters, such as, few
unconfirmed hardship applications made during the reporting year (see section S3-4), GCP
has strategies to continuously monitor and mitigate related risks and ensure high rent
retention rate. For description of these strategies refer to the above sub-sections on
Housing
Access and Affordability
as well as
Assessing Housing Affordability: GCP’s Approach to Rental
Cost Burden and Modernisation Impact
. Local market dynamics, such as shiſts in property
values may also pose challenges to achieving business objectives. The Company positions
itself as a responsible operator by ensuring innovative affordable housing solutions, with
modernisation and development strategies that remained accessible and socially inclusive.
In terms of market opportunities, GCP could expand successful community programs
to additional locations, integrating sustainable technologies and new housing solutions
tailored to evolving needs. Strengthened relationships with stakeholders, including tenants
and local organisations, further enhance GCP’s ability to align its activities with community
priorities, driving long-term success. Refer to section S3-4 for comprehensive actions and
resources committed to mitigating adverse impacts on communities it operates.
Understanding Communities at Greater Risk of Harm
In addition to the DMA, GCP developed its understanding of affected communities at
greater risk of harm, through rent affordability evaluations and construction or renovation
projects impact assessments. The Company has identified low-income communities as
being at higher risk of housing affordability challenges due to the potential financial
burden associated with rent increase. This assessment is based on data received from
operations, as well as targeted affordability analyses within its German portfolio. By
tracking the number of hardship cases submitted relative to the total modernisation-
related rent adjustments done in the reporting year, GCP gains an understanding of
the broader impacts of its property improvements on vulnerable communities (Refer
to sub-section on
Assessing Housing Affordability: GCP’s Approach to Rental Cost Burden
and Modernisation Impact
). By engaging with residents, local authorities, and community
organizations, GCP recognises the greater impact its developments may have on residents
and small businesses near construction sites, particularly those at risk of temporary
displacement or reduced patronage due to limitations on customers to access
their
business places during project executions.
GCP has identified ensuring access to adequate and affordable housing for all community
members, with a particular focus on low-income tenants and social housing residents,
as the material opportunity with respect to affected communities. It has been noted that
the Company pays special attention to the needs for housing affordability by tenants in
lower income areas, who may also rely on social housing and government benefits, when
considering rent increases linked to modernisation. In that sense, its positive impact is
most significant for these vulnerable groups.
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S3-1 - POLICIES GOVERNING AFFECTED COMMUNITIES
Key Contents and Scope of the Policies
GCP’s Community Involvement and Development Guidelines outline the Company’s
commitment to fostering positive social impact and enhancing the well-being of tenants and
local stakeholders. The guidelines are structured around three key principles: affordability,
community engagement, and respect for human rights. It reflects GCP’s broader dedication
to social responsibility and sustainable urban development, ensuring that its operations
contribute to social inclusion, economic empowerment, and environmental resilience in
the regions where it operates.
It applies across all of GCP’s operations, subsidiaries, and affiliated companies, including
entities in which GCP holds an interest. The policy is binding for all personnel, including
officers, apprentices, and governing bodies, ensuring that community engagement
and well-being considerations are fully embedded in the Company’s decision-making
processes. While the policy addresses a broad range of community-related concerns, it
does not include provisions for preventing and addressing impacts on indigenous peoples,
as GCP does not operate in regions where indigenous communities reside.
For details on GCP’s Human Rights Policy, refer to section S1-1.
Governance and Accountability for Policy and Programme Implementation
The ESG Committee is responsible for overseeing the implementation and management
of the Community Involvement and Development Guidelines, ensuring adherence at the
highest level of governance.
By integrating sustainable practices into its operations, GCP seeks to create long-term
socio-economic benefits for the communities in which it operates, promoting inclusive
urban development and resilient local economies.
In setting the Community Involvement and Development Guidelines, GCP considers the
interests of key stakeholders as follows:
1.
Residents and Tenants: GCP focuses on affordability, human rights, and community
engagement to improve wellbeing.
2.
Local Communities: The policy promotes sustainable, inclusive neighbourhoods through
investment in infrastructure and public spaces and addressing community needs.
3. Public Authorities and Local Organisations: Through the GCP Foundation, the
Company collaborates with local organisations to support vulnerable groups and
enhance community development.
While the Guidelines themselves are available only to GCP’s employees via the Company’s
intranet, information about community engagement initiatives is shared through
communication channels such as Service Centres, property managers and neighbourhood
meetings, ensuring that residents are informed about ongoing projects and opportunities
for involvement.
S3-2 – PROCESSES FOR ENGAGING WITH AFFECTED COMMUNITIES
ABOUT IMPACTS
Integrating Community Perspectives into Decision-Making
GCP actively integrates the perspectives of affected communities into its decision-making
processes to ensure that both actual and potential impacts are effectively managed.
The Company engages with local residents, community representatives, and credible
proxies, including municipal authorities, social organisations, and media outlets, to foster
transparency and align its activities with community needs.
As part of its Community Involvement and Development Guidelines, GCP conducts early-
stage consultations with stakeholders during property acquisitions, construction projects,
and refurbishment efforts. This approach enables the Company to proactively identify and
Table 42
Policy Title
Short Description
Community Involvement
and Development
Guidelines
Outlines GCP’s commitment to make a positive impact in the local
communities where it operates and improve the wellbeing of its
tenants and stakeholders, by addressing residents’ principal needs
and rights, with emphasis on housing affordability, community
engagement and respect for human rights.
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, as well as right to privacy, rest and leisure.
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address concerns, ensuring that development projects are socially inclusive and well-
received by the communities they affect.
Beyond formal consultations, GCP has multiple channels through which affected
communities can express their interests and concerns. These are:
•
GCP’s Customer Service Centre, which provides a line of communication for tenants.
•
The Whistleblowing System, allowing community members to report issues
confidentially and anonymously.
•
Property management feedback mechanisms, which enable tenants and local
businesses to share insights on housing conditions and service performance.
•
Tenant engagement initiatives, facilitating ongoing dialogue between GCP and its
residents.
At the corporate level, the ESG Committee, with support from the Head of Sustainability,
ensures that community perspectives are systematically considered in GCP’s strategic
decision-making and sustainability agenda.
As noted earlier, the DMA conducted in 2024 found no material negative impacts on
affected communities. As a result, GCP does not report on specific remediation processes
or additional channels for raising concerns in this reporting period.
S3-4 – TAKING ACTION ON MATERIAL IMPACTS, RISKS AND
OPPORTUNITIES RELATING TO AFFECTED COMMUNITIES
GCP takes proactive measures to prevent, mitigate, and remediate material negative impacts
on affected communities. Controlled rent increases for modernisation and a responsive
approach to hardship applications help maintain affordability.
When calculating whether
to implement the full rent increase the Company is legally entitled to, GCP considers local
market dynamics in order to understand whether the amounts are suited for local market
conditions and adjusts the rent increase accordingly.
The Company’s process aſter receiving hardship applications is to first encourage tenants
to pursue all legally available public support in the form of either unemployment benefits
from the Job Centre or housing benefits from the housing benefit authority before GCP
can consider waiving the rent increase. In every case, the Company assesses individual
circumstances and, where necessary, provides targeted relief measures to maintain
housing affordability. In 2024, no follow-up communication was received aſter the initial
contact from tenants in the three hardship applications received.
GCP adheres to regulated safety standards and conducts regular property maintenance
to ensure safe and well-maintained living environments. Energy efficiency upgrades are
managed to minimise disruptions while enhancing property sustainability. Tenant concerns
are addressed through standardised procedures, ensuring timely and effective responses.
These actions reflect GCP’s commitment to balancing operational improvements with the
well-being of the communities it serves.
Prior to any major renovation or construction, the Company undertakes proactive community
engagement and targeted renovation planning, designed to minimise disruptions.
Furthermore, GCP collaborates with municipalities and community organisations to
enhance social integration, economic resilience and positive environmental impacts in its
areas of operation.
These actions are part of the Company’s ongoing operational activities and broader
strategy, therefore, do not have a defined completion date. The scope of GCP’s key actions
encompasses all residential properties under management, including tenant well-being
initiatives, affordability programmes, and infrastructure upgrades.
Key Results from Addressing Material Impacts
GCP’s commitment to affordability and community wellbeing is reflected in measurable
outcomes. In 2024, of the 1,809 modernisation-related rent increases, only three hardship
applications were submitted, demonstrating the effectiveness of GCP’s approach to
maintaining housing accessibility.
Additional key results:
•
Modernisation investments in 2024 impacted 1,809 occupied residential units,
with an average rent increase of 0.34 €/sqm, 6% lower than the legally permitted
allocation under German law.
•
The median warm rent in GCP’s German properties accounted for 38% of net minimum
wage income in 2024, compared to 39% in 2023. This figure is below Eurostat’s
housing cost “overburden” rate of 40%, described in the sub-section on
Assessing
Housing Affordability: GCP’s Approach to Rental Cost Burden and Modernisation Impact.
•
The net rent portion (excluding service charges) remained stable at 24% of the net
minimum wage in 2024.
Through the Company’s cooperation with a leading organisation of accommodation services
in London, GCP UK was able to provide safe, secure and affordable accommodation to
tenants in need. The organisation collaborates with local authorities, housing associations
and charities to offer temporary and emergency accommodation in all boroughs of London.
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Ensuring a Positive Community Impact
GCP considers itself to have a positive impact on affected communities and sees this as an
opportunity. It remains proactive in managing its relationship with affected communities
through transparent communication, structured support programmes, and minimising
disruptions during construction and renovation (such as controlling noise, dust, and
providing alternative access routes). The Company ensures that remediation processes
are accessible and effective, including service centres, structured complaint resolution
processes, and financial hardship application reviews. Where necessary, additional
support—such as rent waivers or alternative housing solutions—is provided to maintain
housing stability. GCP also conducts regular performance reviews and stakeholder
engagement to ensure continuous improvement in mitigating potential community
impacts.
To ensure that its practices do not cause or contribute to material negative impacts, GCP
engages with local authorities during construction projects, as required by the permitting
process, and complies with all legal and regulatory requirements, ensuring full alignment
with urban planning and housing laws.
In 2024, no severe human rights issues or incidents connected to affected communities
were reported to GCP.
Resource Allocation for Community Initiatives
GCP allocates financial and human resources to managing material impacts related to
affected communities in line with its Community Involvement and Development Guidelines.
Currently, the resources allocated to the topic of adequate and affordable housing are GCP
employees focused on the topic within our operations department, tenant Services Centre
and Rent Control and Increase Department ensuring the engagement with tenants and the
monitoring of the rent cost burden metric.
The Company’s financial contributions to community engagement and development are in
general linked to the GCP Foundation, which in 2024 spent approximately €400K in a wide
range of community initiatives. These investments supported youth education, cultural
events, social welfare programmes, and infrastructure enhancements, benefiting children,
low-income families, and vulnerable populations.
Overall, GCP’s resource allocation reflects a strategic and proactive approach to enhancing
positive impacts in affected community, ensuring long-term sustainability and social
cohesion in the neighbourhoods where it operates.
S3-5 – TARGETS RELATED TO MANAGING MATERIAL IMPACTS, RISKS
AND OPPORTUNITIES
GCP acknowledges the importance of tracking the effectiveness of its policies and actions
in relation to material sustainability-related impacts, risks, and opportunities. While the
Company has not formally adopted specific targets on the topic of provision of adequate
housing, it has formulated a target in relation to the GCP Foundation’s annual spending
which is up to €500,000 per annum.
Furthermore, it actively monitors progress of its targets through internal assessments
and reporting, as well as stakeholder engagement mechanisms, ensuring its initiatives on
affected communities are aligned with its strategic objectives.
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ESRS S4 Consumers and End-Users
INTRODUCTION
GCP recognises 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, GCP
prioritises fostering strong relationships with its tenants by providing accessible,
reliable, and high-quality customer services. Central to this commitment is the GCP
Service Centre, which operates 24/7 for emergencies and provides support during regular
business hours on working days. This service is complemented 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. GCP’s Tenant Satisfaction Guidelines outlines its approach to
customer engagement, ensuring that inquiries are met with professionalism and care.
These efforts underscore GCP’s dedication to creating a positive and inclusive living
environment for all its tenants
(*)
.
This section focuses on material impacts related to tenant privacy and access to quality
information. It highlights the implementation of effective measures to safeguard tenant
data through GDPR-compliant processes, alongside collaboration with IT providers and
contractors to uphold high standards of information security.
The Company 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,
we have implemented comprehensive measures, including mandatory awareness
training on GDPR.
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
(*)
when referring to consumers and end-users in this section, we refer to tenants and/or potential tenants of GCP. However,
to follow the language of the ESRS, consumers and end-users is used interchangeably with tenants or potential tenants
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IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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.
S4. SBM-2 INTERESTS AND VIEWS OF STAKEHOLDERS
For more information on interests and views of stakeholders, including consumers and
end-users, please refer to section ESRS 2 SBM-2 in the report.
S4. SBM-3 – MATERIAL IMPACTS, RISKS AND OPPORTUNITIES AND
THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL
Inclusion of Consumers and End-Users in GCP’s Sustainability Disclosures
GCP ensures that all consumers and end-users who may experience material impacts
from its operations are included within its ESRS 2 disclosures. As a residential real estate
company, GCP identifies tenants as the primary end-users of its properties and services.
Types of Consumers and End-Users Affected by GCP’s Operations
GCP recognises that its operations and value chain influence a broad range of consumers
and end-users. The two key groups impacted include:
•
Residential Tenants, who engage with GCP for housing and associated services.
•
Prospective Tenants, interacting with GCP during application processes
(*)
.
Table 43
Material sustainability matters covered in ESRS S4
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorisation
IRO
Localisation
of IRO
Time
horizon
of IRO
Information-
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
Double
Positive
Impact /Risk
Own
operations,
value chain
(downstream)
Short-term /
Long-term
Material Negative Impacts on Tenants
Following its DMA assessment, GCP has identified material negative impacts on
consumers and end-users related to:
•
Privacy Risks – These are primarily linked to the handling of tenant information during
leasing, maintenance, and engagement processes. While no systemic data breaches
have been identified, risks exist due to data handling practices and information
security vulnerabilities.
•
Access to Quality Information Risks – Ensuring tenants receive clear and accurate
service-related information is critical. Although no systemic issues have been
reported, isolated cases of miscommunication occur and are addressed through
structured communication channels and continuous process improvements.
GCP has not identified material impacts related to harmful products or services, freedom
of expression, non-discrimination, vulnerabilities to health risks, or marketing impacts—
including those affecting children and financially vulnerable individuals.
Activities With Positive Impacts on Tenants
Meanwhile, GCP actively ensures positive impacts on tenants by improving privacy
safeguards and access to accurate information through:
•
Direct Operations: Tenant communication via digital platforms (apps, emails),
property management services, and customer support systems.
•
Value Chain: Partnerships with IT providers and service contractors to ensure secure
data management and reliable information dissemination.
Understanding Consumer and End-User Risks and Opportunities
The material risks identified are unauthorised data disclosure, service errors, and insufficient
tenant education on their rights and available channels. GCP proactively mitigates these
risks through:
•
GDPR-compliant data protection measures.
•
Tailored communication strategies for vulnerable tenant groups, such as digitally
excluded tenants or elderly tenants.
•
A centralised Customer Relationship Management (“CRM”) 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.
(*) Unless explicitly indicated that reference is made to prospective tenants, all
references to tenants mean both – existing tenants and prospective
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Specific Groups of Consumer and End-Users
GCP 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, GCP 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
GCP’s approach to tenant engagement is multi-faceted, incorporating digital platforms,
in-person events, and feedback mechanisms such as surveys and complaint resolution
processes.
GCP has developed an understanding of how consumers and end-users with specific
characteristics, working in particular contexts, or undertaking certain activities may be
at greater risk of harm. This understanding has been built through tenant engagement,
including targeted surveys and tenant feedback channels, as well as insights gathered
from property managers. This approach enables GCP to develop targeted strategies for
mitigating risks and enhancing tenant well-being.
GCP has developed an understanding of risks to specific groups, such as low-income
tenants and digitally excluded individuals, through targeted surveys and tenant feedback
channels. Tailored solutions, including alternative communication methods, mitigate
these risks. Specific groups include tenants with limited digital literacy and elderly tenants
reliant on physical documentation. These groups face higher risks in privacy breaches or
missing key updates, prompting in-person support and physical communication rather
than digital channels.
S4-1 – POLICIES RELATED TO CONSUMERS AND END-USERS
GCP has implemented comprehensive policies addressing tenant privacy and information
access. These are:
GCP has established a comprehensive policy framework to uphold ethical business
practices, safeguard data privacy, ensure transparency and enhance tenant satisfaction.
These policies align with global standards to reinforce compliance and trust across all
stakeholders.
Key policies include:
•
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 GCP, ensuring strict adherence to GDPR and
other relevant data security regulations.
•
Tenant Satisfaction Guidelines – Structures 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, emphasising service
excellence and continuous engagement.
Table 44
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
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 labour
and forced labour and addresses precarious work by requiring compliance
with applicable labour laws. Aligns with applicable ILO standards.
Tenant Satisfaction
Guidelines
The GCP 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, as well as right to privacy, rest and leisure.
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For details on GCP’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 Daily Management 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 GCP’s German Operations leads the Tenant Satisfaction
Guidelines, driving service excellence and tenant engagement initiatives.
Global Frameworks and Standards Informing GCP Policies
GCP’s policies align with international frameworks, including the UN Guiding Principles on
Business and Human Rights and GDPR standards, ensuring robust protection for all tenant
interactions.
The quality of GCP’s Customer Service Centre has also been validated through the
certification by TÜV Nord for Quality Management and Service Quality. In line with these
commitments, GCP also prioritises 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 (“ISMS”) at our headquarters in Berlin was
maintained for a fourth consecutive year in 2024. The scope 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, GCP reported zero incidents human rights violations or incidents that are in non-
compliance with company policies in relation to its consumers and end-users. These are based
on international frameworks of the UN Guiding Principles on Business and Human Rights,
the ILO Declaration on Fundamental Principles and Rights at Work, the OECD Guidelines
for Multinational Enterprises. For further details, please refer to section S1-17
in the report.
S4-2 – PROCESSES FOR ENGAGING WITH CONSUMERS AND END-
USERS ABOUT IMPACTS
Tenant Engagement and Data Protection Practices
GCP places a strong emphasis on tenant engagement, ensuring that tenant perspectives are
actively integrated into its decision-making process through various communication channels.
Tenant engagement occurs throughout the tenant lifecycle, from initial inquiry to post-
tenancy feedback, through proactive, reactive, and interactions.
Tenants and prospective tenants can contact GCP via four main methods:
•
Email and postal services
•
24/7 Service Centre, available in multiple languages, with regular support Monday
to Thursday from 8:00–17:00 and Friday from 8:00–15:30
•
GCP’s business chat via mobile phone or the GCP Tenant App
•
In-person consultations with property managers, which can also be booked through
the Tenant App
To improve efficiency, the Service Centre has introduced a voice bot to manage peak
call times, offering tenants an additional contact option. Additionally, 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 GCP’s approach to managing privacy,
information access, and overall tenant experience. Callers to the Service Centre are
informed about GCP’s data privacy regulations at the beginning of each call and directed
to further resources on the Company’s website. While calls are not recorded, tenants can
choose to accept or decline monitoring for training purposes.
GCP also prioritises employee awareness regarding data protection. Regular training
sessions on GDPR compliance and data protection policies are provided to Service
Centre and Property Management employees to ensure compliant behaviour. 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 GCP’s operations.
Operational Oversight of Tenant Engagement
The COO of the German operations and Head of Quality Assurance & Customer Care joint
responsibility for tenant engagement at the highest operational level. They ensure that tenant
feedback informs GCP’s overall strategy and service improvements. The Data Protection
Officer (“DPO”) ensures that tenant interactions comply with data privacy regulations,
reinforcing GCP’s commitment to GDPR compliance and ethical data management.
Assessing Effectiveness of Tenant Engagement
The effectiveness of tenant engagement is tracked through GCP’s Ticketing System,
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which monitors all requests across communication channels, including request types,
resolution processes, and response times. Internal reviews ensure transparency and
accountability. After a request is resolved via the Service Centre, tenants receive a survey
evaluating friendliness, reachability, work quality, and resolution time. In 2024, GCP was
rated 4.68 (out of 5) for accessibility, 4.67 (out of 5) for the service of the staff, and 4.5
or above in all other aspects (friendliness service provider 4,54 (out of 5), quality of work
4,5 (out of 5) and time to resolve 4,53 (out of 5). Our target is to continue to improve our
score across all areas aiming to maintain a minimum score of 4.5 in all aspects.
Insights from particularly vulnerable consumers and end-users
GCP has identified specific tenant groups that may be vulnerable to information access
and privacy-related risks, such as elderly tenants and those with limited digital literacy.
To address this, GCP has implemented solutions, including alternative communication
methods (physical documentation, in-person service) and dedicated support channels.
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
GCP is committed to ensuring that all material negative impacts on tenants, particularly
concerning privacy and access to quality information, are addressed effectively. The
Company maintains a structured approach for identifying, assessing, and resolving these
issues through governance structures and policies aligned with GDPR compliance and
tenant engagement strategies.
When material negative impacts are identified, GCP acts immediately by strengthening
security controls, enhancing tenant communication, and reinforcing internal training
programs. These corrective measures ensure that tenants’ rights to privacy and
transparent information access are upheld.
Channels for Raising Concerns and Support Access
GCP provides multiple channels through which tenants can raise concerns, as outlined in
S4-2 – Processes for engaging with consumers and end-users about impacts.
To ensure the effectiveness of these engagement channels, reported concerns are integrated
into GCP’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 Company continuously reviews the effectiveness of its engagement
channels through internal audits and performance tracking.
Additionally, GCP’s external and anonymous Whistleblower system is also accessible
to our tenants, who can report concerns confidentially and without fear of retaliation.
The Company’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 emphasise ethical conduct and consumer protection.
Tenant Awareness and Trust in Engagement Processes
GCP evaluates tenant awareness and trust in its reporting structures through multiple
methods. Tenant feedback surveys, issued after interactions with the Service Centre,
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.
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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
GCP employs a structured approach to managing material risks and opportunities related
to privacy and information access. The Company collaborates with the Data Protection
Officer (“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 GCP’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 GCP are labelled with an
information security classification, with restricted files requiring password protection.
Staff members sign a commitment to data protection upon joining the Company and are
required to complete annual video-based training modules. In 2024, GCP introduced a
cybersecurity awareness initiative, including an interactive “Information Security Escape
Room” as part of its Awareness Days.
GCP employs the following measures to mitigate potential negative impacts:
•
Data Protection Measures:
Continuous updates to GDPR-compliant data handling
protocols to prevent breaches and unauthorized disclosures.
•
Service Quality Improvements:
Improvements to the tenant app provide easy access
to accurate, and timely information, complemented by 24/7 support through the
Service Centre.
•
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
GCP’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
GCP’s entire portfolio. As these actions are an integral part of GCP’s operational framework,
they do not have a fixed time horizon but are continuously developed and refined.
Table 45
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, emphasising safeguarding tenant,
employee, and business data.
•
Implementation of Privileged Access Management (PAM)
System, which enforces multi-factor authentication (MFA),
session recording, and access approval for external IT service
providers to prevent unauthorised 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
unauthorised disclosure.
•
Continuous training for employees on handling tenant data.
Access to
(quality)
information
•
Providing clear communication channels such as through the
GCP Tenant App and 24/7 Service Centre
•
Community engagement through property managers and
neighbourhood
meetings,
ensuring
that
residents
are
informed about ongoing projects.
•
Continuous development of tenant engagement platforms,
including a feedback mechanism integrated into GCP’s
centralised ticketing system.
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Resources Allocated to Key Actions
The allocation of financial resources to the action plan is part of the Company’s ongoing
operational activities, and this information is not tracked at the required level of detail at
this stage. The Company continuously reviews and enhances its reporting processes to
improve transparency and provide further relevant disclosures where possible.
Remedies for Material Impacts
GCP 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.
GCP’s approach is proactive and solution-oriented. Even in cases where no material impact
is identified, the incident is analysed 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 organisation.
Furthermore, transparent communication is prioritised to promote security and data
protection awareness at all levels. For example, data protection and security best practices
were recently highlighted in the organisation 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
GCP 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 Programme 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.
GCP measures the success of its engagement initiatives through multiple feedback
mechanisms. The 24/7 Service Centre 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 GCP
to refine its initiatives and enhance service quality.
Identifying Appropriate Actions for Managing Material Risks
GCP 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 analysed 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, GCP 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 Company’s ability to
prevent recurrence.
Ensuring Effective Remediation Processes
GCP’s remediation processes are designed to be accessible, transparent, and continuously
improving. Tenants can report concerns through multiple channels, including the Service
Centre, 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.
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.
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Mitigating Risks and Pursuing Material Opportunities
GCP mitigates tenant dependency risks through engagement, regulatory compliance, and
ESG initiatives. Strong tenant communication is maintained across multiple channels, with
continuous improvements in services. Regulatory compliance is ensured through proactive
monitoring of housing laws, rent controls, and health and safety protocols, minimising
legal risks. ESG initiatives, energy-efficient upgrades and community programs, strengthen
tenant relationships and increase market visibility, with impacts measured through energy
efficiency ratings, ESG performance, and community feedback.
Looking ahead to 2025, GCP 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 GCP’s regulatory compliance strategy to
safeguard tenant data and uphold consumer protection standards.
Ensuring Responsible Business Practices
GCP 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 centralised ticketing system ensures
efficient tracking and resolution of tenant concerns.
The following resources have been allocated:
S4-5 – TARGETS SET TO MANAGE MATERIAL IMPACTS, RISKS AND
OPPORTUNITIES RELATED TO CONSUMERS AND END-USERS
Targets
Table 46
Resource Type
Description
Resource Allocation
Personnel
Includes dedicated roles responsible for
managing material impacts
Dedicated roles such as the Data
Protection Officer (DPO) 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
Centralised ticketing and tracking system
to manage and resolve tenant concerns
Table 47
Long-term targets
2024 Targets
2024 Progress
2025 Target
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
campaigns across our
offices.
•
Roll-up Posters were
put up in Branches
and HQ.
•
Phishing Campaigns
(E-Mail) were
pursued.
•
Shared regular
Information Security
Communications via
E-Mail.
•
New starters are
participating in an on-
site “Welcome Day”
format with a segment
of over an hour on
Information Security
and Data Protection.
•
Security facts are
displayed on coffee
makers.
•
Awareness days were
conducted for the
first time with hands
on examples (escape
game truck / lock
picking).
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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Target Setting and Consumer Engagement in Performance Management
GCP’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, GCP establishes a strong foundation for
data protection, ethical business practices, and transparent consumer interactions.
GCP has defined one measurable target—the successful recertification of ISO 27001. This
ensures that the Company continues to uphold internationally recognised information
security standards. In addition to this, GCP 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 Company’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.
GCP defines its targets based on internal assessments, regulatory requirements, and
stakeholder feedback. For further details on stakeholder engagement in the target-
setting process, please refer to subsection Setting Sustainability Targets of section
ESRS
2 GOV-1. 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 GCP’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, GCP gathers tenant insights
through various engagement channels, including satisfaction surveys, property manager
interactions, tenant events, the Service Centre, and digital feedback mechanisms. These
inputs play a crucial role in shaping GCP’s service improvements and operational adjustments.
Tracking Performance Against Targets with Consumer Input
Tenants contribute to tracking GCP’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
GCP 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 Company’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
GCP places strong emphasis on corporate governance, executed responsibly by the
Board of Directors and the Daily Management, as well as senior management, including
department heads. GCP 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.
GCP’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 Company’s policies, which include the
Employee Code of Conduct, the Business Partner Code of Conduct, the Whistleblowing
Policy, the Human Rights Policy and more. GCP’s policies are designed to foster a culture
of compliance, ethical behaviour, and inclusivity across its operations and value chain.
In 2024, these principles were reinforced through an enhanced compliance monitoring
system, regular policy updates, and targeted employee training programs.
GCP is not subject to any mandatory corporate governance code or statutory legal
provisions. Specifically, GCP 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, GCP adheres to recommendations C.10 (pertaining to the Chair of the Audit
Committee), D.8, and D.9 of the German Corporate Governance Code. The Company has
issued a declaration confirming its compliance with these specific recommendations. In
general, GCP 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).
To ensure alignment with ESRS G1 requirements, GCP actively integrates stakeholder
feedback into governance processes. Through structured engagement mechanisms, such
as tenant surveys, employee feedback channels, and investor meetings, the Company
remains responsive to the evolving needs of its diverse stakeholder base. In 2024, this
engagement informed several governance enhancements, including updates to the
Business Partners Code of Conduct and the expansion of whistleblowing channels to
cover tenants and suppliers.
IROs or datapoints that were identified as immaterial to GCP are not covered in this report.
In some cases, GCP 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 G1
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
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Table 48
Material sustainability matters covered in ESRS G1
Sub-topic
Sub-sub-
topic
Materiality
(impact/
financial/
double)
Categorisation
IRO
Localisation
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
relationships 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 Impact /
Negative Impact
Own operations
and Value chain
(upstream)
Short-term /
Long-term
G1. GOV-1 – THE ROLE OF THE ADMINISTRATIVE, MANAGEMENT AND
SUPERVISORY BODIES
GCP’s business strategy is underpinned by our commitment to ethical business conduct,
strong corporate governance and high levels of transparency. Our compliance framework
seeks to embed our principles of integrity, respect, performance, accountability, and
sustainability into all of our business activities. We ensure our Board of Directors and
senior executives hold vast experience and skillsets in relevant business areas in order
to help maintain our high governance standards.
The Board of Directors makes decisions in GCP’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 Company. All Company-wide policies mentioned in this
section are aligned with and approved by the Board of Directors.
The Board is supported by the Advisory Board, which is an important source of guidance for
the Board when making decisions, also on matters of business conduct. Finally, the Daily
Management’s main role is to ensure implementation of GCP’s ethical business conduct
across all levels of the Company and finding solutions in case issues have been identified.
There is strong collaboration with senior management, especially heads of department in
relation to communication of and adherence with GCP’s compliance framework.
Overall, outstanding leadership is crucial in this regard. Our managers are expected to be
examples of our core values of mutual respect and clear communication. This standard
of behaviour usually shows positive effects on our commercial success, as well as on
staff performance. We maintain a horizontal organisational 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, 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 is a mandatory requirement of all employee contracts.
As mentioned above, GCP ensures that its Board of Directors and senior executives hold
vast experience and skillsets in relevant business areas in order to help maintain our
high governance standards. In 2024, GCP 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 Daily Management and also the Board of Directors, please refer to section ESRS 2
GOV-1 in the report.
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G1-1– BUSINESS CONDUCT POLICIES AND CORPORATE CULTURE
Corporate Culture on Ethical Business Conduct
GCP’s corporate culture is guided by strong governance, ethical business practices, and
transparency. The Board of Directors and Daily Management regularly discuss corporate
culture, focusing on compliance, integrity, and stakeholder accountability. Key themes,
including anti-corruption, and ethical conduct, are embedded in company policies and
reinforced through mandatory training.
Through campaigns such as the Awareness Days in 2024, where Information Security,
Compliance and Sustainability and HR departments organised a data security-themed
escape room, compliance and ESG quizzes and other activities to raise awareness with
the Company’s employees on these important topics, GCP fosters a corporate culture of
active engagement, including on Compliance.
GCP 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 Behaviour
GCP has established structured mechanisms for identifying, reporting, and investigating
concerns related to unlawful behaviour or violations of its Code of Conduct. The
Whistleblowing System, managed by an external service provider, ensures a confidential
and anonymous reporting channel, accessible to both internal and external stakeholders,
including employees, business partners, and tenants.
Concerns regarding potential violations of its code of conduct, whether for employees
or business partner, may be reported via direct communication with the Compliance or
HR Departments. Reports are reviewed and investigated by the Compliance Department,
which operates independently to ensure objectivity and adherence to established
protocols. Investigations follow GCP’s Investigation Policy, with potential outcomes
including disciplinary measures, contract terminations, or legal action where necessary.
To promote awareness and accessibility, GCP integrates whistleblowing training into
onboarding programs and annual compliance refresher trainings, ensuring that all
stakeholders are informed about reporting mechanisms and protection from retaliation.
Table 49
Policy Name
Description
Business Partners
Code of Conduct
(BPCoC)
This policy sets ethical standards for GCP’s business partners,
emphasising adherence to legal, social, and environmental standards.
It prohibits corruption, bribery, child labour, and forced labour, 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.
GCP’s Compliance Framework
GCP recognised 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, GCP has established a
comprehensive framework of business conduct policies that promote compliance, ethical
business conduct and accountability. GCP’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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Policy Scope and Applicability
The scope of GCP’s business conduct and corporate culture policies extends across all
levels of operations, ensuring compliance for employees, suppliers, business partners, and
contractors.
•
Employee Code of Conduct, Anti-Corruption Policy, Diversity Policy, Anti-Discrimination
Policy, Whistleblowing Policy, Procurement Policy, and Human Rights Policy apply to
all employees, executives, and board members.
•
Business Partner Code of Conduct, Procurement Policy, and Human Rights Policy cover
suppliers, contractors, and external business partners, setting clear expectations
towards them.
•
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 are responsible for ultimate oversight, ensuring that business
conduct policies align with GCP’s corporate values, regulatory obligations, and long-term
strategic goals. Additionally, the Daily Management of the Company, supported by the Chief
Compliance Officer (“CCO”) as well as other heads of departments, leads the implementation
and enforcement of anti-corruption, whistleblowing, and ethical governance policies.
Alignment with Global Standards
GCP’s governance policies align with globally recognised anti-corruption, business ethics,
and human rights standards, ensuring best-in-class compliance and risk management.
Key frameworks and initiatives include:
•
United Nations Convention Against Corruption (“UNCAC”) – Governing anti-
bribery, fraud prevention, and corporate integrity measures.
•
General Data Protection Regulation (“GDPR”) – Ensuring data privacy, security,
and regulatory compliance.
•
OECD Guidelines for Multinational Enterprises – Defining ethical corporate
governance and responsible business conduct.
•
International Labour Organisation (“ILO”) Core Conventions – Establishing
protections against child labor, forced labor, and workplace discrimination.
•
UN Global Compact Principles – Reinforcing corporate commitments to anti-
corruption, labor rights, and sustainability.
Table 49
Policy Name
Description
Whistleblowing
Policy
Provides mechanisms for confidential reporting of misconduct, ensuring protection
from retaliation. The Whistleblowing system provided by the leading BKMS digital
system, allows internal and external parties to report legal and ethical misconduct. All
reports are handled confidentially by a 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, emphasising safeguarding
tenant, employee, and business data. It mandates secure data handling, staff training,
and effective IT systems to prevent breaches and unauthorised access.
Human Rights
Policy
Commits to upholding international human rights standards across GCP’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
marginalised and underrepresented groups within the workforce.
Grievance and
Complaint
Mechanisms
Embedded in HR and compliance frameworks, these mechanisms allow employees
and external stakeholders to report discrimination, misconduct, or legal violations.
Confidentiality is ensured, and systems are regularly audited for effectiveness and
trustworthiness.
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 emphasises transparency, fair competition, sustainability, and
risk management, fostering long-term, responsible partnerships.
Occupational Health
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 are also the Global Information Security Policy. GCP is also a
signatory of the Charta der Vielfalt (German Diversity Charter). For more information on
our anti-discrimination efforts, please refer to section S1 in the report. Another crucial
subject in our compliance program is the management of ethical standards in our supply
chain, please refer to section S2 in the report.
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Safeguards for Whistleblowers
GCP takes its legal obligations regarding whistleblowers protection and its duty of care as
an employer very seriously. GCP’s management 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 they report.
The Whistleblowing Policy provides a secure and confidential platform for employees,
tenants, and partners to report unethical behaviour. This System is managed an external
service provider, enabling full anonymity, and therefore protection from possible retaliation.
Our intranet and publicly available website feature a dedicated page on our breach reporting
and whistleblowing process, providing direct access to our whistleblowing platform. This
ensures that employees and external stakeholders are informed and can easily access the
platform. Additionally, training on the whistleblowing platform is included in our Welcome
Days programme 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 whistleblowing platform or other channels (such as phone
calls or emails to the Compliance or HR departments) are tracked and investigated by
our 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 further
business with the Company. GCP may also decide to consult with authorities if necessary.
Strengthening our Governance Practices
GCP uses an online learning platform to provide trainings on a wide range of topics related
to business conduct. In line with the Company’s corporate culture of acting responsibly and
in accordance with ethical values and standards outlined in GCP’s corporate policies, regular
training ensures continuous awareness of the importance of these topics. The platform
provides links to the Company’s e-learning tool offering training on anti-corruption, 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 are included in the Welcome Days for new employees, along
with training on the use of our whistleblowing platform. Furthermore, employees are required
to complete annual refresher trainings on these policies, reaffirming their commitment to
maintaining these standards.
Typically, in a real estate business such as GCP’s, functions that are most at risk of corruption
and bribery include business development, construction and transactions. These functions
interact with authorities, developers and construction companies as well as large land and
real estate owners and brokers, which increases their exposure to corruption and bribery
risk. At GCP all of these functions – as do all other functions – receive training on the
subject matters and adhere 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, GCP implements a structured approach to supplier oversight and due diligence.
Business Partner Code of Conduct and Human Rights Due Diligence
Firstly, our Business Partner Code of Conduct (“BPCoC”) is mandatory for all Business
Partners with contracts above €5,000, with the exception of 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. 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 and frameworks.
Secondly, with a view of potential human rights violations in the supply chain, GCP conducts
a human rights due diligence procedure on high-risk suppliers. Taking into account adverse
impacts on human rights in the Company’s materiality assessments and risk management,
we consider such risks associated with our suppliers according to their economic sector
and countries of operation. GCP 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 categorised as low, medium, or high-risk based
on their contract volume with GCP, 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 Company’s Human Rights Due Diligence Process,
please refer to subsection Human Rights Due Diligence Process of section S2-1.
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G1-3 – PREVENTION AND DETECTION OF CORRUPTION AND BRIBERY
Our 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 giſts; charitable
contributions; political engagement; dealing with public officials; dealing with “facilitation
payments”, as well as the extension of the Company’s principles and behavioural 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 Company’s Compliance site of the intranet. Employees are further
sensitised to the topic during the Company’s Welcome Day, which includes a presentation
on several compliance topics. Employees are also required to complete an online compliance
training with the the Company’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, GCP takes a proactive approach to managing risks and leveraging opportunities
within its governance framework. The Company’s risk management strategy includes regular
audits, compliance monitoring, and risk assessments conducted by specialised 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 Company or their employment
terminated. GCP may also decide to consult with authorities if necessary.
GCP 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 Code of Conduct also requires business partners to set up appropriate systems to
ensure that corrupt behaviour does not occur.
Lastly, as the Company 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 Company 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.
Finally, as mentioned in G1-1, GCP has put in place obligatory compliance training for all its
employees, including those working in procurement, as well as operations and construction teams
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, GCP predominantly works with small and medium-
sized, locally operating business partners for construction and maintenance projects.
Regarding payment terms, while GCP does not have a specific policy addressing late payments
to suppliers, it clearly defines the payment terms at the outset of its contracts to ensure
alignment with suppliers. The Company is committed to adhering to these agreed-upon terms.
Consideration of Social and Environmental Criteria in Supplier Selection
GCP incorporates social and environmental criteria in selecting supply-side partners through:
1.
Adherence with Company’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 labour 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 & safety on our construction sites by Construction and Operations
departments. If issues are identified during the process relating to human rights or other
social matters, or environmental topics, the Company very carefully evaluates its business
relationship with this concerned partner and may consider a termination of the relationship
or contract. Further information, please refer to section S2-1 in the report.
3.
Evaluation Methods:
GCP project managers oversee construction projects, engage
directly with contractors, and conduct site visits to assess compliance with environmental
and health & safety standards. A Business Partner Questionnaire is used to verify
adherence to company standards.
4.
Environmental data delivery:
With our construction contract templates, GCP 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, GCP encourages supplier transparency and environmental action.
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Compliance Governance Processes
Our 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,
we 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 CEO and a member of the Board of Directors. This ensures that the Board
of Directors and the Daily Management are promptly informed of the investigation’s
results, allowing for effective oversight and appropriate actions.
Compliance and Anti-Corruption Trainings
Besides the training programme in the Company’s e-learning platform mentioned above,
we also operate a compliance site on our Company’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 organisation, 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 page for
breach reporting and whistleblowing processes and provides access to our whistleblowing
platform. We recognize that maintaining alignment with our high ethical standards
requires a frictionless method 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, GCP 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 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 organisation.
The following table provides an overview of the nature, scope and depth of compliance
trainings offered by GCP:
As all employees are required to complete GCP’s anti-corruption and anti-bribery trainings
at employment entry and by annual refresher. Our training completion data shows that in
2024, 90% of all employees conducted the training, yet it may be that employees leſt the
Company 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 Company is reviewing its
systems and processes to report this in upcoming years.
In 2024, the Board of Directors and Daily Management 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 Daily Management is intended for 2025.
Table 50
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
eLearning
Platform
New
Employee
Onboarding
All new hires
Introduction to company
compliance standards,
anti-corruption policies,
and reporting channels.
Upon hiring
SharePoint
Page,
eLearning &
Handbook
Leadership
Program
Department
Heads &
Leadership
Governance, risk
mitigation, and
enforcement of
compliance policies.
During the
Program
Seminars/
Workshop
Awareness
Campaigns &
Refreshers
All
employees
Building awareness
throughout the Company
Annually
Online
and at the
Headquarters
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
142
Resource Allocation and Continuous Improvement
GCP 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 Company’s ongoing
operational activities, and this information is not tracked at the required level of detail
at this stage. GCP 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, GCP was not subject to any convictions or fines for violations of anti-corruption or
anti-bribery laws. We did not experience any incidents of corruption or bribery, nor were
we 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 GCP 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 date when contractual or statutory
term of payment starts to be calculated is currently not being tracked. GCP is reviewing
processes and its payments systems for possibilities to track this information in the future.
Whereas a payment term of 30 days was determined by GCP for construction suppliers,
payment terms with other suppliers or authorities are oſtentimes determined by the party
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 data on percentage of payments
aligned with standard payment terms and aim to have more clarity in 2025. Yet, in 2024, the
total number of outstanding legal proceedings for late payments amounted to 7 for GCP.
Key Actions on Corruption and Bribery and Governance
GCP’s actions in relation to managing its material impacts, risks and opportunities related to
corruption and bribery are the following:
The scope of GCP’s actions described above extends across all levels of the organisation,
including employees, management, board members, suppliers, contractors, and other
external business partners.
The actions are part of the Company’s ongoing operational activities and, therefore, do not
have a defined completion date. Implementation is continuous and integrated into GCP’s
broader strategy.
The description of activities mentioned above are ongoing efforts by GCP to adhere to
international governance standards and our compliance framework.
Table 51
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
•
Trainings of employees on compliance and human rights-
related topics via the Company’s e-learning platform.
Incidents
Investigation of any reported incidents following the Company’s
Investigation Policy and subsequent corrective actions including
warnings, fines or bans for business partners from doing business
with the Company 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
GCP 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, GCP 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 Company’s
good reputation on the topic.
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
143
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
43
ESRS 2 GOV-1
21 (e)
Percentage of board members who are independent
X
Yes
43
ESRS 2 GOV-4
30
Statement on due diligence
X
Yes
47
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
66-68
ESRS E1-1
16 (g)
Undertakings excluded from Paris-aligned Benchmarks
X
X
Yes
67
ESRS E1-4
34
GHG emission reduction targets
X
X
X
Yes
83
ESRS E1-5
38
Energy consumption from fossil sources disaggregated by sources (only high climate impact sectors)
X
Yes
85-87
ESRS E1-5
37
Energy consumption and mix
X
Yes
85-88
ESRS E1-5
40-43
Energy intensity associated with activities in high climate impact sectors
X
Yes
88
ESRS E1-6
44
Gross Scope 1, 2, 3 and Total GHG emissions
X
X
X
Yes
88-89
ESRS E1-6
53-55
Gross GHG emissions intensity
X
X
X
Yes
89
ESRS E1-7
56
GHG removals and carbon credits
X
Yes
94
ESRS E1-9
66
Exposure of the benchmark portfolio to climate-related physical risks paragraph
X
No
ESRS E1-9
66 (a)
66 (c)
Disaggregation of monetary amounts by acute and chronic physical risk
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 E1-9
69
Degree of exposure of the portfolio to climate-related opportunities paragraph
X
No
ESRS 2 IRO 2:
List of data points that derive from other EU legislation and information on their location in sustainability statement
:
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
144
DR
Paragraph
Name
SFDR
P3
BMR
EUCL
Material
(Yes/No)
Page
ESRS E2-4
28
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
9
Water and marine resources
X
No
ESRS E3-1
13
Dedicated policy
X
No
ESRS E3-4
14
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
102
ESRS S1-1
21
Due diligence policies on issues addressed by the fundamental International Labour Organisation
Conventions 1 to 8
X
Yes
102
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
102-103
ESRS S1-3
32 (c)
Grievance/complaints handling mechanisms
X
Yes
104
ESRS S1-14
88 (b) and (c)
Number of fatalities and number and rate of work-related accidents
X
X
Yes
111
ESRS S1-14
88 (e)
Number of days lost to injuries, accidents, fatalities or illness
X
Yes
111
ESRS S1-16
97 (a)
Unadjusted gender pay gap
X
X
Yes
112
GRAND CITY PROPERTIES S.A.
I
Consolidated Sustainability Statement
145
Legislation
SFDR
Sustainable Finance Disclosure Regulation
P3
EBA Pillar 3 disclosure requirements
BMR
EU Benchmark Regulation
EUCL
EU Climate Law
DR
Paragraph
Name
SFDR
P3
BMR
EUCL
Material
(Yes/No)
Page
ESRS S1-16
97 (b)
Excessive CEO pay ratio
X
No
ESRS S1-17
103 (a)
Incidents of discrimination
X
Yes
112
ESRS S1-17
104 (a)
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
X
Yes
112
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
Yes
115-117
ESRS S2-1
18
Policies related to value chain workers
X
X
Yes
115-117
ESRS S2-1
19
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
X
Yes
115
ESRS S2-1
19
Due diligence policies on issues addressed by the fundamental International Labour Organisation
Conventions 1 to 8
X
Yes
116-117
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
No
128-129
ESRS S4-1
17
Non-respect of UNGPs on Business and Human Rights and OECD guidelines
X
X
Yes
128
ESRS S4-4
35
Human rights issues and incidents
X
Yes
129-131
ESRS G1-1
10 (b)
United Nations Convention against Corruption
X
Yes
138
ESRS G1-1
10 (d)
Protection of whistleblowers
X
Yes
139
ESRS G1-4
24 (a)
Fines for violation of anti- corruption and anti-bribery laws
X
X
Yes
142
ESRS G1-4
24 (b)
Standards of anti-corruption and anti-bribery
X
Yes
142
146
To the Board of Directors of
Grand City Properties 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 Grand City Properties 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 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.
147
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.
Those charged with governance are responsible for overseeing the Consolidated Sustainability
Statement.
148
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
−
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
149
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 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
Alessandro Raone
Partner
Luxembourg, 17 March 2025
150
GRAND CITY PROPERTIES S.A.
I
Board of Directors’ Report - Business performance & analysis
BUSINESS PERFORMANCE
& ANALYSIS
GRAND CITY PROPERTIES S.A.
I
Board of Directors’ Report - Business performance & analysis
151
For the year ended 31 December
Consolidated income statement data
2024
2023
€’000
Net rental income
422,693
411,313
Operating and other income
174,325
196,428
Revenue
597,018
607,741
Property revaluations and capital losses
44,028
(890,017)
Property operating expenses
(253,707)
(279,050)
Administrative and other expenses
(10,632)
(10,906)
Depreciation and amortisation
(6,311)
(9,323)
Operating profit (loss)
370,396
(581,555)
Adjusted EBITDA
335,010
319,647
Finance expenses
(58,845)
(56,814)
Other financial results
(11,245)
(86,088)
Current tax expenses
(41,275)
(40,865)
Deferred tax income (expenses)
(16,900)
127,254
Profit (loss) for the year
242,131
(638,068)
FFO I
187,534
183,936
FFO II
205,177
255,708
Notes on business performance
GRAND CITY PROPERTIES S.A.
I
Board of Directors’ Report - Business performance & analysis
152
GCP recorded operating and other income amounting to €174 million, decreasing by 11%
as compared to the €196 million recorded in 2023. This line item is mainly composed of
income related to recoverable operational expenses from tenants related to utilities and
services, such as heating and water. Accordingly, the decrease in utility costs, also reflected
in a reduction in property operating expenses, were the main driver of this decrease. This
reduction was further impacted by the effect of net disposals in the portfolio.
Property Revaluations and Capital Losses
In 2024, GCP recorded positive property revaluations and a slight capital loss totalling
together €44 million, compared to a loss of €890 million recorded for the year 2023. The
line item is composed primarily of property revaluations, which are non-cash gains (or losses)
related to the changes of the fair value of the investment property. The fair value of the
investment property of GCP is independently assessed by certified external valuers. As part
of this annual report, the Company conducted a full revaluation of its portfolio.
For the year 2024, GCP recorded a revaluation in the amount of €50 million. The slight
positive revaluation for the year is the result of positive revaluation in the second half of
the year driven by strong operational growth and supported by normalisation of interest
rates, which offset the negative revaluation result recorded in the first half of the year,
confirming that the bottom of valuations has been reached in the middle of 2024. GCP’s
portfolio is well diversified and located in key metropolitan areas of Germany and London,
where it benefits from strong demand and supply fundamentals and solid economic drivers,
positioning the Company well in the long term. This is further supported by the strong
operational performance of the portfolio, reflected by 3.8% like-for-like rental growth,
outpacing the negative impact of yield expansion. On a like-for-like basis, the portfolio
value increased by 0.5% compared to December 2023. As of December 2024, the portfolio
had an average value of €2,203/sqm and a rental yield of 4.9%, as compared to an average
value of €2,109/sqm and a rental yield of 4.8% in December 2023, reflecting slight yield
expansion year-over-year.
GCP’s total revenues amounted to €597 million for the year 2024, a slight 2% decrease in
relation to the €608 million recorded for the year 2023. Total revenues are composed of net
rental income and operating and other income. The decrease is the result of lower operating
and other income, as described below, partially offset by higher net rental income.
The Company recorded net rental income in the amount of €423 million in 2024, increasing
by 3% as compared to the €411 million recorded in 2023 as operational growth, reflected also
in a solid like-for-like rental growth, more than offset the impact of net disposals.
GCP continued to record strong like-for-like rental growth of 3.8% in 2024, primarily driven
by in-place rental growth. The vacancy rate remained at a low level of 3.8% as of December
2024, stable compared to December 2023. The Company’s strong operational platform
continues to capture the upside potential from the robust fundamentals and a widening
supply-demand imbalance in German metropolitan areas and in London, which continues to
put upward pressure on market rents in GCP’s locations and results in a high upside potential
to market rental levels. Further details on the like-for-like rental growth are disclosed in the
EPRA performance measures section of this report. As of December 2024, in-place rent for
the portfolio reached €9.2/sqm, continuously increasing from €8.6/sqm in December 2023
and €8.2/sqm in December 2022.
The annualised net rent of the portfolio amounted to €413
million as of the end of 2024, up 2% from €406 million in the end of 2023, due to the strong
like-for-like growth which more than offset the net disposals during the year.
As part of GCP’s prudent approach in 2024, the Company continued to dispose properties
in order to strengthen its balance sheet. These disposals reduced the rental income, but
improved leverage and reinforced the strong liquidity position. During 2024, GCP completed
disposals of properties amounting to ca. €270 million, which only had a partial contribution
to the rental income in 2024, while having a full contribution in 2023. The impact of disposals
was partially offset by a small amount of acquisitions, amounting to €45 million, primarily
comprising properties in London.
For the year ended 31 December
2024
2023
€’000
Net rental income
422,693
411,313
Operating and other income
174,325
196,428
Revenue
597,018
607,741
For the year ended 31 December
2024
2023
€’000
Property revaluations
49,560
(881,382)
Capital losses
(5,532)
(8,635)
Property revaluations and capital losses
44,028
(890,017)
Revenue
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The second component of this line item, capital gains/losses, captures the premium or discount
resulting from the disposal of properties against their book values. GCP completed disposals
amounting to ca. €270 million in 2024, recording a capital loss of €5.5 million, reflecting a
slight discount of 2% to book values. When compared to their acquisition costs including capex,
the Company recorded a profit amounting to €18 million, which reflects a 7% profit margin.
Disposal Analysis
GCP has conducted several balance sheet strengthening measures in 2024, which
included signing ca. €350 million and closing ca. €270 million in property disposals. As
a result of the proactive deleveraging measures and the positive revaluation recorded
in the second half of 2024, the LTV dropped to 33%, compared to 37% in December
2023. The primary locations of the disposed assets are London, NRW, Berlin and Hessen.
Approximately €40 million of the disposals closed in 2024 were signed in 2023, while the
For the year ended 31 December
2024
2023
€’000
Acquisition cost including capex of disposed properties
248,528
234,192
Total revaluation gains on disposed properties since
acquisition
23,175
80,407
(A) Book value (IFRS)
271,703
314,599
Disposal value net of transaction costs
266,171
305,964
(B) Capital losses
(5,532)
(8,635)
(B/A) Discount over net book value
-2%
-3%
(C) Disposal value net of transaction costs
266,171
305,964
Acquisition cost including capex of disposed properties
(248,528)
(234,192)
(D) Result from disposal of properties
17,643
71,772
(C/D) Disposal profit margin on investment property
7%
31%
remainder of the deals closed were signed in 2024. The closed disposals were completed
at a slight discount of 2% and a rent multiple of 17x. As of December 2024, ca. €125
million of properties are signed
but not closed.
Property Operating Expenses
For the year 2024, GCP recorded property operating expenses in the amount of €254
million, 9% lower as compared to the €279 million recorded for the year 2023. The expenses
recorded in this line item are primarily composed of purchased services, which are costs
that are primarily recoverable from tenants, including heating, water, waste management
and winter services. The line item additionally includes maintenance and refurbishment
expenses, operational personnel costs and other operating expenses.
Property operating expenses decreased primarily as a result of the decrease in costs of
purchased services, which was particularly impacted by lower heating costs. As most of
these costs are borne by tenants, the decrease is mirrored in the decrease in operating and
other income. While energy prices have reduced, the Company has continued to take actions
in the direction of more efficient energy consumption, such as by providing easily accessible
information for tenants on how to efficiently heat their apartment. The Company additionally
undertook investments to enhance the energy efficiency of the portfolio. These include the
renewal of heating systems, electrical installations and improving energy efficiency.
GCP has an ongoing commitment to maintain high levels of tenant satisfaction and build long
term relationships with its tenants. These efforts included several initiatives such as tenant
engagement activities and benefit programs. In 2024, the Company once again conducted
its GCP Cinema Summer Festival, taking place in several locations. Throughout the year,
For the year ended 31 December
2024
2023
€’000
Purchased services
(177,434)
(200,384)
Maintenance and refurbishment
(22,953)
(22,187)
Personnel expenses
(26,246)
(26,342)
Other operating costs
(27,074)
(30,137)
Property operating expenses
(253,707)
(279,050)
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façade refurbishments and refits, and upgrades of corridors and staircases, among others.
Also included in repositioning capex are improvements made to the property surroundings,
which increases the value of the properties. Such projects include the renovation or
construction of playgrounds, barbeque pits, and other common meeting areas, among
others. The diverse repositioning capex projects support the value growth of the portfolio
and the letting process, resulting in lower vacancies and higher rent potential. Additionally,
as part of the repositioning capex, GCP carries investments aimed at improving the energy
efficiency and CO
2
reduction.
The Company invested €25 million in pre-letting modifications, higher compared to the €15
million invested in 2023. Pre-letting modifications, relate to investment activities outside
the scope of repositioning capex and include large refurbishment projects and the creation
of new lettable areas, as well as the completion of properties acquired that are in the final
stages of development, among others. These investments will be supportive of additional
rent generation in future periods.
Additionally, GCP invested approximately €2.4 million in modernisation investments in 2024,
lower compared to €10 million invested in 2023. Modernisation projects are carried out
selectively. Examples of such projects include measures such as the instalment of elevators
and balconies, as well as improvements in installations that ensure efficient use of power,
water and heating. Modernisation investments also comprise energetic modernisation
initiatives aimed at increasing energy efficiency such as the installation of green energy
and heating systems and windows with better insulation. In addition to modernisation
investments, the Company carries additional investments related to energy efficiency and
CO
2
reduction, which are carried under repositioning capex and pre-let modification works.
GCP also organized further activities, such as related to the Easter and Christmas holidays.
The GCP app and portal services received further enhancements, introducing new features
to simplify tenant management. The app allows tenants to efficiently handle leases, upload
documents, track energy consumption, and submit service requests. Recent upgrades have
expanded its capabilities to include tenant communications, contract management, and
rent reminders. Additionally, an AI-powered chatbot was integrated to decrease response
times, improve accessibility, and streamline tenant support, ultimately boosting operational
efficiency.
Also impacting property operating expenses are operational personnel expenses and other
operating costs. GCP recorded personnel expenses in the amount of €26 million for the
year 2024, stable compared to the €26 million recorded in 2023. Other operating costs are
primarily constituted by expenses such as legal fees, communication expenses, marketing
activities and transportation, and amounted to €27 million in 2024, slightly lower as
compared to €30 million for the year 2023.
Maintenance and Capex
A key pillar of GCP’s strategy is maintaining high levels of tenant satisfaction and to provide
tenants with quality housing. To ensure this, GCP continuously assesses the quality of its
properties and carries out a broad range of targeted maintenance and refurbishment projects
aimed at the preservation of the quality of the assets. As a result of these projects, intended
to deal with property-specific needs, the living quality of tenants is maintained, ensuring
tenant satisfaction, which in turn decreases vacancies and increases reletting rents, giving
place to higher and stable rental income. As such, in 2024 vacancy was kept at the low level
of 3.8%.
In 2024, GCP recorded maintenance and refurbishment expenses in the amount of €23
million or €5.6 per average sqm, slightly higher as compared to the €22 million or €5.3 per
average sqm recorded in 2023. GCP provides a fast and efficient way for tenants to place their
requests through the GCP app and tenant service portal, from which they can also monitor
the status of their maintenance and service requests and manage the process, as well as
providing the option to contact GCP’s tenant care agents through the GCP service center.
The Company’s investments in repositioning capex amounted to €83 million or €20.2
per average sqm in 2024, as compared to €77 million or €18.4 per average sqm in 2023.
Repositioning capex comprise targeted investments that increase the quality, safety and
overall features of the assets in the portfolio, supporting the ability to capture higher rents.
Examples of these investments include apartment renovations and preparation for letting,
Maintenance & Capex
development (€/sqm)
18.4
23.7
5.3
20.2
25.8
5.6
Repositioning capex / avg sqm
Maintenance / avg sqm
2023
2024
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Administrative and Other Expenses
GCP recorded administrative and other expenses in the amount of €10.6 million in 2024,
stable compared to the €10.9 million recorded in 2023. Administrative and other expenses are
primarily composed of expenses related to administrative personnel, legal and professional
consultancy fees, audit and accounting costs, marketing fees, and other expenses.
Finance Expenses
For the year 2024, GCP recorded finance expenses in the amount of €59 million, slightly
higher compared to the €57 million recorded in 2023. The slightly higher cost is mainly driven
by the change in the interest rate environment, causing new debt to be raised at higher rates
than the debt maturing. This was partially offset by hedging measures taken by the Company
and the recent decrease in rates, which positively impacted the debt with variable and capped
rates. Additionally, the higher finance expenses were further offset by the interest income
earned on the Company’s strong liquidity position.
For the year ended 31 December
2024
2023
€’000
Personnel expenses
(4,613)
(4,441)
Audit and accounting costs
(3,037)
(2,818)
Legal and professional consultancy fees
(2,283)
(2,666)
Marketing and other expenses
(699)
(981)
Administrative and other expenses
(10,632)
(10,906)
For the year ended 31 December
2024
2023
€’000
Finance expenses
(58,845)
(56,814)
In 2024, the Company has taken several proactive measures to strengthen its financial profile,
but which have resulted in slightly higher total finance expense in 2024. These measures
include the issuance of the €500 million Series Y bond, marking the return of GCP to capital
markets with its first bond issuance since 2021, as well as securing €100 million in new
bank financing. During the year, the Company redeemed ca. €300 million of bonds and bank
loans and bought back bonds with notional amounts of ca. €270 million at a slight discount
which had near term maturity dates, reducing the near-term debt maturities and extending
the debt maturity profile. As of December 2024, GCP’s cost of debt is 1.9% with an average
debt maturity of 4.8 years, stable compared to the cost of debt of 1.9% with an average
debt maturity of 5.3 years as of December 2023. Taking into account the liquidity position,
the debt maturity is 6.3 years. GCP’s hedging ratio stands at 95% as of December 2024,
protecting the Company against potential rises in interest rates.
Other Financial Results
In 2024, other financial results amounted to a negative €11 million, compared to a negative
€86 million in 2023. This line item reflects changes in the fair value of financial assets and
liabilities, traded securities, and derivative instruments, which are primarily influenced by
capital markets volatility and interest rate fluctuations. The impact of change in fair value of
financial assets and liabilities was positive in 2024 as compared to a negative impact in 2023.
Other financial results also include expenses related to financial activities such as hedging
fees, bank financing, and other costs related to debt optimisation.
For the year ended 31 December
2024
2023
€’000
Change in fair value of financial
assets and liabilities, net
3,876
(67,015)
Finance-related costs
(15,121)
(19,073)
Other financial results
(11,245)
(86,088)
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In 2024, the Company reported a net profit of €242 million, as compared to a net loss of €638
million in 2023. The change from a significant net loss in 2023 to a profit in 2024 marks the
reversal of the negative trend in 2024, as valuations have reached trough levels and stabilized
in 2024, aſter a period of negative valuations which more than offset the continuous positive
operational results. The profit was driven by robust operational profits, supported by a high
adjusted EBITDA and partially offset by higher finance expenses. Compared to 2023, the net
profit in 2024 was further supported by lower negative other financial results.
Profit attributable to shareholders in 2024 was €197 million, compared to a loss of €548
million in 2023. Profit attributable to non-controlling interests was €3 million in 2024,
compared to a loss of €124 million in 2023. The profit attributable to perpetual notes
investors amounted to €42 million in 2024, higher compared to a profit of €34 million in
2023. The increase was mainly due to the reset of two perpetual note series in 2023, which
had a full period impact in 2024, partially offset by the impact of perpetual notes exchanges
and tender offers that the Company carried out in April and September 2024, which resulted
in lower attribution going forward.
Earnings per Share
In 2024, the Company reported basic earnings per share of €1.14 and diluted earnings per
share of €1.14, compared to a basic loss per share of €3.18 and a diluted loss per share of
€3.17 in 2023. The improvement was driven by the Company’s operational profitability and
supported by positive revaluation effects during the year.
Taxation
In 2024, GCP recorded total tax expense of €58 million, compared to total tax income of €86
million in 2023. Total tax income/expense include both current tax expenses and deferred
tax income/expenses.
Current tax expenses amounted to €41 million in 2024, stable compared to €41 million in
2023. These expenses include corporate income tax and property taxes, which are influenced
by the Company’s underlying financial performance and the size and geographic distribution
of its portfolio.
Deferred tax resulted in an expense of €17 million in 2024 compared to an income of €127
million in 2023. Deferred tax income/expenses primarily reflect non-cash tax adjustments
related to theoretical tax liabilities on revaluation gains, with tax rates depending on asset
locations. Additionally, deferred taxes are affected by revaluation changes in derivatives and
carried-forward losses. In 2024, the Company recorded a deferred tax expense primarily as
a result of the positive revaluation gains recorded in the year, while in 2023 the negative
revaluation resulted in a deferred tax income.
Profit (Loss) for the Year
For the year ended 31 December
2024
2023
€’000
Current tax expenses
(41,275)
(40,865)
Deferred tax income (expenses)
(16,900)
127,254
Total tax income (expenses)
(58,175)
86,389
For the year ended 31 December
2024
2023
€’000
Profit (loss) for the year
242,131
(638,068)
Profit (loss) attributable to the owners of the Company
196,626
(547,507)
Profit attributable to the perpetual notes investors
42,362
33,700
Profit (loss) attributable to non-controlling interests
3,143
(124,261)
For the year ended 31 December
2024
2023
€’000
Basic earnings (loss) per share (in €)
1.14
(3.18)
Diluted earnings (loss) per share (in €)
1.14
(3.17)
Weighted average number of ordinary
shares (basic) in thousands
172,587
172,352
Weighted average number of ordinary
shares (diluted) in thousands
172,874
172,633
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The diluted earnings per share reflects the various dilutive effects. As the Company does
not have dilutive instruments, the basic and diluted earnings per share are not materially
different. The minimal difference in basic and diluted shares in 2024 primarily relate to the
small impact from employees’ share-based remunerations.
Total Comprehensive Income
In 2024, GCP reported a total comprehensive income of €254 million, compared to a
total comprehensive loss of €642 million in 2023. This increase was mainly driven by the
profit recorded during the year and other comprehensive income of €12 million. The other
comprehensive income primarily resulted from changes in forward and other derivative
contracts, as well as foreign currency effects related to hedging activities, mainly associated
with the London portfolio.
For the year ended 31 December
2024
2023
€’000
Profit (loss) for the year
242,131
(638,068)
Total other comprehensive income (loss)
for the year, net of tax
11,757
(3,447)
Total comprehensive income (loss)
for the year
253,888
(641,515)
Adjusted EBITDA and Funds from Operations
The adjusted EBITDA is an industry standard figure representing the Company’s recurring
operational profits before interest, tax expenses, depreciation, and amortisation. It excludes
the effects of property revaluations, capital gains or losses, and other non-operational income
statement items such as equity-settled share-based payments and other adjustments. The
Company recorded an adjusted EBITDA of €335 million for the year 2024, an increase of
5% compared to €320 million in 2023. This increase was primarily due to the rise in net
For the year ended 31 December
2024
2023
€’000
Operating profit (loss)
370,396
(581,555)
Depreciation and amortisation
6,311
9,323
EBITDA
376,707
(572,232)
Less: Property revaluations and capital losses
(44,028)
890,017
Equity settled share-based payments and
other adjustments
2,331
1,862
Adjusted EBITDA
335,010
319,647
Finance expenses
(58,845)
(56,814)
Current tax expenses
(41,275)
(40,865)
Contribution to minorities
(4,994)
(4,332)
Adjustment for perpetual notes attribution
(42,362)
(33,700)
FFO I
187,534
183,936
Weighted average number of ordinary shares
(basic) in thousands, including impact from
share-based payments
172,855
172,634
FFO I per share (in €)
1.08
1.07
Result from disposal of properties
17,643
71,772
FFO II
205,177
255,708
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FFO I per share
The Company recorded an FFO I per share of €1.08 for the year 2024, slightly higher compared
to €1.07 in 2023, driven by the higher FFO I while the average number of outstanding shares
remained broadly unchanged.
FFO II
FFO II is a supplementary performance measure that includes disposal effects in addition
to FFO I. The result from the disposal of properties reflects the amount by which the sale
price exceeded the initial acquisition cost plus capex invested in the disposed properties.
The Company reported an FFO II of €205 million in 2024, lower compared to €256 million
in 2023. The lower result in the current year is due to the lower disposal margin and lower
completed disposals in 2024 compared to 2023. GCP had disposals amounting to ca. €270
million generating gains of €18 million in 2024 over total cost, lower when compared to
disposals of €306 million generating gains of €72 million in 2023.
Adjusted Funds From Operations (AFFO)
Adjusted Funds from Operations (AFFO) is another indicator for the Company’s recurring
operational cash flow and is derived by subtracting the repositioning capex from the
Company’s FFO I. The Company includes in the AFFO calculation repositioning capex which
is targeted at value creation and improving the asset quality of the portfolio, which the
Company deems as being relevant for its AFFO calculation. In 2024, the Company recorded
AFFO of €105 million, compared to €107 million in 2023. The lower AFFO is primarily due to
the increase in repositioning capex, which offset the slight increase in FFO I.
For the year ended 31 December
2024
2023
€’000
FFO I
187,534
183,936
Repositioning capex
(82,892)
(76,610)
AFFO
104,642
107,326
rental income generated from the Company’s strong operational performance, as reflected in
the solid like-for-like rent increase of 3.8%, additionally supported by improved operational
efficiency.
Funds From Operations I (FFO I) is a widely used measure of the recurring operational
cash flow of a real estate company and is considered a key industry performance indicator.
FFO I is calculated by deducting from the adjusted EBITDA finance expenses, current tax
expenses, the contribution to minority interests, and the share of profit attributable to the
Company’s perpetual notes investors. In 2024, GCP generated Funds From Operations I
(FFO I) amounting to €188 million, higher compared to €184 million in 2023, and at the
top of the updated 2024 guidance range of €180 million to €190 million. The FFO I in 2024
was mainly driven by the robust growth in adjusted EBITDA, which offset higher perpetual
notes attribution and increased finance expenses. The increase in perpetual notes attribution
resulted from the reset of two of GCP’s perpetual note series in 2023. This higher attribution
was partially offset by the exchange offers launched by GCP in April and September 2024,
which reduced coupon payments by €2 million on an annualised basis.
FFO I DEVELOPMENT
(in € millions)
FFO I PER SHARE
ANNUAL DEVELOPMENT
(in €)
2023
2023
2024
2024
184
+2%
+1%
1.07
188
1.08
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Cash Flow
In 2024, the Company generated net cash provided by operating activities amounting to
€284 million, higher as compared to €249 million in 2023. The cash from operating activities
during the reporting period was primarily attributable to the Company’s strong operational
performance, further supported by strong like-for-like rental growth of 3.8%. The increase
compared to 2023 is mainly the result of higher operational costs during that period, which
necessitated additional working capital in 2023, while in 2024, the pressure of higher
operational cost has begun to ease, leading to reduced cash outflows in the current period.
The Company recorded net cash provided by investing activities amounting to €52 million in
2024, as compared to €148 million provided in 2023. This decrease was mainly due to a lower
volume of property disposals, which amounted to ca. €270 million in 2024, net of €60 million
in vendor loans provided. GCP also received €24 million in repayments from vendor loans.
These cash inflows were partially offset by capex investments aimed at enhancing rental
growth and, subsequently, operational cash flow in future periods.
The Company recorded net cash used in financing activities amounting to €93 million in
2024, compared to a net cash provided by financing activities of €405 million in 2023. The
cash inflow from financing activities was mainly driven by new bank financing of €100 million
For the year ended 31 December
2024
2023
€’000
Net cash provided by operating activities
284,461
249,407
Net cash provided by investing activities
52,020
147,796
Net cash provided (used) by (in) financing activities
(93,374)
405,304
Net increase in cash and cash equivalents
243,107
802,507
Changes in cash and cash equivalents held-for-sale and
effect of foreign exchange rate changes
576
1,734
Cash and cash equivalents at the beginning of the period
1,129,176
324,935
Cash and cash equivalents at the end of the period
1,372,859
1,129,176
and the €500 million Series Y bond issuance during the year. These inflows were offset by
bond buybacks amounting to ca. €270 million in nominal value at a discount, as well as debt
repayments and redemptions of ca. €300 million. GCP’s proactive measures ensured a well-
managed maturity profile, with cash and liquid assets sufficient to cover debt maturities until
the end of 2027. As of December 2024, GCP maintained a hedging ratio of 95%, with a low
cost of debt at 1.9% and an average debt maturity of 4.8 years. Payments to perpetual note
investors, related to perpetual note exchanges and coupon payments, as well as interest
payments, further impacted the cash flow. Lastly, in December 2024 the Company disposed
most of its remaining treasury shares, resulting in ca. €45 million inflow of cash.
As a result, GCP recorded a net increase in cash and cash equivalents of €243 million in 2024,
compared to €803 million in 2023. The increase in cash balances aligns with the Company’s
objective of maintaining high liquidity levels and stable leverage. GCP’s strong liquidity
position and conservative financial management ensure the Company is well prepared for
future opportunities.
Munich
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Main valuation parameters
As part of its 2024 annual report, the Company conducted a full revaluation of its portfolio,
carried out by certified external valuators. This resulted in a like-for-like revaluation of 0.5%,
with a value per sqm of €2,203, slightly higher as compared to the €2,109 per sqm reported
in December 2023, reflecting a rental yield of 4.9%, compared to 4.8% as of December 2023.
This confirms the trough has been reached, recording the first positive revaluation since
2022. The below tables present the main average valuation parameters.
The non-current assets also include tenant deposits, which serve as security for rent
payments, and which had a balance of €47 million as of December 2024. Long-term financial
investments, including co-investments in promising deals aimed at long-term yield, which
amounted to approximately €50 million, and approximately €50 million investments in
minority stake in real estate portfolios
as of December 2024.
Assets
The Company’s total assets amounted to €11.2 billion as of December 2024, an increase of
3% compared to €10.9 billion as of December 2023.
Non-current assets
As of December 2024, GCP recorded non-current assets amounting to €9.0 billion, stable
compared to €9.1 billion at the end of 2023. Non-current assets primarily consist of
investment property, which amounted to €8.6 billion as of December 2024, stable compared
to €8.6 billion as of December 2023. The change in investment property is mainly due to
disposals of investment properties and the reclassification of certain properties as assets
held-for-sale, which was offset by positive revaluations recorded in the Company’s portfolio,
positive currency impacts on the London portfolio, and a small amount of acquisitions. GCP
disposed of properties amounting to ca. €270 million during 2024, while acquiring €45
million of properties, primarily through gaining control of investment properties in London
which were previously included under loans-to-own.
2024
2023
Value per sqm
€2,203
€2,109
Market rental growth p.a.
1.8%
1.9%
Management cost per unit p.a.
€322
€303
Ongoing maintenance cost per sqm
€11.5
€11.1
Average discount rate
5.4%
5.4%
Average cap rate
4.2%
4.1%
Dec 2024
Dec 2023
€’000
(A) end of period annualised net
rental income
(1)
412,549
405,529
(B) Investment property
(1)
8,441,342
8,478,502
(A/B) rental yield
4.9%
4.8%
(B/A) rent multiple
20.5x
20.9x
(1)
excluding properties classified as development rights & invest
Dec 2024
Dec 2023
€’000
Non-current assets
9,016,959
9,077,640
Investment property
8,628,962
8,629,083
Current assets
2,201,852
1,840,507
Cash and liquid assets (including
those recorded under held-for-sale)
1,514,674
1,230,483
Total assets
11,218,811
10,918,147
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Current assets
The Company recorded current assets amounting to €2.2 billion as of December 2024, an
increase of 20% compared to €1.8 billion as of December 2023. Current assets primarily
consist of cash and liquid assets, which had a balance of €1.5 billion as of December 2024,
an increase compared to €1.2 billion as of December 2023. The increase is a result of new
bonds raised and bank financing obtained, cash flows from operating activities, proceeds
from disposals and repayment of vendor loans. This increase was partially offset by debt
repayments, bond buybacks, and capex. GCP’s liquidity position remains strong, with cash
and liquid assets totalling €1.5 billion, equivalent to 34% of total debt.
The current assets balance include vendor loans amounting to approximately €130 million as
of December 2024. The vendor loan balance was transferred to the current assets balance as
they are expected to be repaid in 2025, of which €66 million was repaid aſter the reporting
date. The vendor loans were given to facilitate and optimize transactions as buyers can utilize
the short-term flexibility in obtaining financing. In the first half of 2024, GCP provided ca.
€60 million of vendor loans, in connection to a disposal in London, while in the second half of
2024, GCP received the repayment of a vendor loan of an amount of €24 million provided in
December 2023. The loans are secured against the sold properties, typically with an average
LTV ratio of about 60% at the time of disposal. In the event of default by a borrower, GCP
could reclaim the assets at a discount and impose penalties on the defaulting party through a
receivership process. The expected cash flows from the vendor loan repayments will reduce
the Company’s leverage but conservatively are not included in LTV calculations until payment
is received.
The current assets balance also include trade and other receivables as well as assets held-for-
sale. As of December 2024, trade and other receivables amounted to €449 million, of which
approximately €194 million were operating cost receivables, reflecting payments for ancillary
services provided to tenants. These receivables are settled annually against advances received
from tenants, which are current liabilities recorded under trade and other payables.
The Company recorded assets held-for-sale in the amount of €233 million as of end of
December 2024, compared to €196 million as of end of December 2023. Assets held-for-sale
include properties which are intended to be sold within the next 12 months. The increase
in this line is primarily due to reclassification of new properties which are expected to be
disposed, partially offset by completed transactions. As of December 2024, approximately
€125 million of assets held-for-sale were signed, but not yet completed, and the transactions
are expected to be finalised in the coming periods.
Liabilities
As of December 2024, the Company’s total liabilities amounted to €5.8 billion, an increase
from €5.7 billion as of December 2023. Total liabilities primarily comprise straight bonds,
loans and borrowings, deferred tax liabilities, other long-term liabilities, derivative financial
instruments, and current liabilities. The increase in total liabilities was mainly driven by new
debt raised. However, the impact of these increases was partially offset by debt repayments
and bond buybacks at a discount. Other long-term liabilities and derivative financial
instruments are also included in this category.
As a part of its deleveraging and debt optimisation strategy, GCP continued to strengthen its
liquidity position, as reflected in its cash and liquid assets balance of €1.5 billion by the end
of December 2024, compared to €1.2 billion in December 2023. During the year, the Company
issued €500 million nominal amount of Series Y straight bonds, and additionally raised €100
million in new secured bank debt. It also redeemed and repurchased an aggregate nominal
amount of ca. €540 million of straight bonds and repaid ca. €30 million of bank loans related
to disposed properties, partially offsetting the increase in new debt.
The Company maintains the flexibility to secure additional bank financing in the future due
to its high unencumbered asset ratio of 73%, representing a total value of €6.4 billion. As of
December 2024, the cost of debt remained low at 1.9%, with most of the debt hedged against
interest rate fluctuations indicated by the Company’s 95% hedging ratio. The average debt
maturity stood at 4.8 years.
Dec 2024
Dec 2023
€’000
Long and short-term loans
and borrowings
929,439
872,427
Straight bonds and bond redemption
3,505,860
3,559,897
Deferred tax liabilities (including
those under held-for-sale)
706,395
671,896
Other long-term liabilities and
derivative financial instruments
(1)
314,030
268,940
Current Liabilities
(2)
348,882
314,878
Total Liabilities
5,804,606
5,688,038
(1)
including short-term derivative financial instruments
(2)
excluding current liabilities included in the items above
GRAND CITY PROPERTIES S.A.
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Deferred tax liabilities at the end of December 2024 amounted to €706 million, an increase of
5% compared to €672 million as of December 2023. The increase was driven the revaluation
gains recorded during the year, partially offset by disposals. Deferred tax liabilities reflect a
hypothetical scenario where investment properties are sold in the form of asset transactions,
with tax rates determined based on the location of each property.
Other non-current liabilities and derivative financial instruments totalled €314 million as of
December 2024, representing an increase of approximately €45 million compared to the prior year.
Current liabilities amounted to €349 million as of December 2024, an increase from €315
million at the end of 2023. This line item includes trade and other payables, liabilities held-
for-sale, and other current obligations. Current liabilities are mainly comprised of trade and
other payables, which amounted to €279 million in the reporting year and are reflected on
the asset side by corresponding operating cost receivables.
Equity
As of December 2024, total equity amounted to €5.4 billion, higher compared to €5.2 billion
at the end of December 2023. Total equity was mainly impacted by the Company’s strong
profit during the year, offset by the reduction in the balance of perpetual notes, resulting
from the exchange and tender offers.
Shareholders equity amounted to €3.7 billion as of December 2024, higher compared to €3.5
billion as of December 2023, due to the profit attributed to shareholders as well as a disposal
of most of the Company’s remaining treasury shares, resulting in ca. €45 million increase
in cash and equity. The sale of treasury shares was carried out in December 2024 at a price
of €11.9 per share, reflecting the market share price at the time of sale. The treasury shares
Dec 2024
Dec 2023
€’000
Total Equity
5,414,205
5,230,109
of which equity attributable to the
owners of the Company
3,700,201
3,477,627
of which equity attributable to the
perpetual notes investors
1,212,444
1,236,693
of which non-controlling interests
501,560
515,789
were sold to several international investors who approached the Company and were looking
to obtain a relatively large stake in GCP. In 2024, GCP did not distribute a dividend for the
2023 financial year due to macroeconomic uncertainty and the Company’s strategic focus on
strengthening its liquidity and debt reduction.
Equity attributable to perpetual note investors stood at €1.21 billion as of December 2024,
lower compared to €1.24 billion at the end of December 2023. In April and September
2024, the Company executed voluntary exchange and tender offers for two outstanding
perpetual notes with nominal values of €200 million and €350 million, carrying coupons
of 6.332% and 5.901%, respectively. The offers had a high combined acceptance rate of
85%, and the Company issued €431.7 million in new perpetual notes with a 6.125% coupon
and a first call date in January 2030. The perpetual exchange and tender offers support
credit metrics under S&P’s methodology and resulted in a slight decrease in the balance of
outstanding perpetual notes.
As of December 2024, non-controlling interests amounted to €502 million, decreasing from
€516 million at the end of December 2023. The decrease was mainly due to dividends paid to
non-controlling interests, partially offset by profits.
Debt financing KPIs
LOAN-TO-VALUE
Dec 2024
Dec 2023
€’000
Investment Property
(1)
8,532,253
8,544,738
Investment properties of assets
held-for-sale
(1)
224,705
191,773
(A) Total value
8,756,958
8,736,511
Total debt
4,435,299
4,432,324
Cash and liquid assets (including
those under held-for-sale)
1,514,674
1,230,483
(B) Net debt
2,920,625
3,201,841
(B/A) LTV
33%
37%
(1)
including advanced payments and deposits and excluding right-of-use assets
GRAND CITY PROPERTIES S.A.
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Unencumbered assets
Dec 2024
Dec 2023
€’000
(A) Unencumbered Assets
6,449,256
6,606,947
(B) Total Investment Property
(including those under held-for-sale)
8,853,667
8,824,724
(A/B) Unencumbered Assets Ratio
73%
75%
For the year ended 31 December
Interest coverage ratio (ICR)
2024
2023
€’000
(A) Adjusted EBITDA
335,010
319,647
(B) Finance Expenses
58,845
56,814
(A/B) Interest Coverage Ratio
5.7x
5.6x
For the year ended 31 December
Debt service coverage ratio (DSCR)
2024
2023
€’000
(A) Adjusted EBITDA
335,010
319,647
(B) Finance Expenses
58,845
56,814
(C) Amortisation of loans from financial institutions
5,958
4,417
[A/(B+C)] Debt Service Coverage Ratio
5.2x
5.2x
The Company maintains a conservative financial profile as a core aspect of its business
strategy, reflected in key debt financing metrics such as a low LTV ratio, a high proportion of
unencumbered assets, and strong coverage ratios.
The Company’s LTV ratio stood at 33% as of December 2024, lower compared to 37% at the
end of December 2023 and well below both the Company’s internal board limit of 45% and the
thresholds set by its bond covenants. The Company also maintained strong coverage ratios,
which is reflected in its solid operational performance. In 2024, GCP recorded an interest
coverage ratio (ICR) of 5.7x and a debt service coverage ratio (DSCR) of 5.2x, compared to
5.6x and 5.2x respectively in 2023, demonstrating the Company’s ability to meet its debt
obligations.
The pool of unencumbered assets, amounting to €6.4 billion and representing 73% of the
total value of the investment property portfolio, provides significant financial flexibility
thereby allowing the Company the option to raise secured financing if needed.
GCP’s conservative financial profile, characterised by a low LTV ratio and high coverage ratios,
ensures broad access to both public and private capital markets. This is further supported by
the Company’s investment-grade credit ratings, including a BBB+/Negative rating from S&P
which was re-affirmed as of December 2024 and an unsolicited Baa1/Negative rating from
Moody’s.
Details regarding the EPRA LTV are included in the EPRA Performance Measures section of
the report.
37%
33%
BoD Limit
LTV
Dec 2023
Dec 2024
45% Board of Directors’ limit
GRAND CITY PROPERTIES S.A.
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2024
2023
In €‘000 unless otherwise indicated
EPRA NRV
4,902,192
4,606,481
EPRA NRV per share (in €)
27.8
26.7
EPRA NTA
4,279,793
4,013,761
EPRA NTA per share (in €)
24.3
23.2
EPRA NDV
3,782,254
3,745,313
EPRA NDV per share (in €)
21.4
21.7
EPRA Earnings
(1)
163,771
153,678
(1)
EPRA Earnings per share
(1)
(in €)
0.95
0.89
(1)
EPRA Earnings (excl. perp.)
(1)
206,133
187,378
EPRA Earnings (excl. perp.) per share
(1)
(in €)
1.19
1.09
EPRA LTV
46%
48%
EPRA LTV (including RETT)
43%
46%
EPRA Net initial yield (NIY)
3.7%
3.6%
EPRA "topped-up" NIY
3.7%
3.6%
EPRA Vacancy
3.8%
3.8%
EPRA Cost Ratio (incl. direct vacancy costs)
21.3%
22.7%
EPRA Cost Ratio (excl. direct vacancy costs)
19.6%
20.8%
EPRA Like-for-like rental growth
3.8%
3.3%
The European Public Real Estate Association (EPRA) is the widely recognised market
standard guidance and benchmark provider for the European real estate industry. EPRA’s
Best Practices Recommendations prescribe the ongoing reporting of a set of performance
metrics which are meant 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 standardised EPRA Performance Measures provide additional perspective on
earnings, balance sheet and operational metrics, and facilitate for the simple and effective
comparison of performance-related information across different companies.
EPRA Performance Measures
(1)
according to the updated EPRA methodology. Fore more details, refer to the EPRA Performance Measures sec-
tion of the report, 2023 figures adjusted accordingly
Halle
GRAND CITY PROPERTIES S.A.
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in € ‘000 unless otherwise specified
EPRA NRV
EPRA NTA
EPRA NDV
EPRA NRV
EPRA NTA
EPRA NDV
Dec 2024
Dec 2023
Equity attributable to the owners of the Company
3,700,201
3,700,201
3,700,201
3,477,627
3,477,627
3,477,627
Deferred tax liabilities on investment property
(1)
699,844
(2)
585,864
(3)
-
665,331
(2)
559,911
(3)
-
Fair value measurements of derivative financial instruments
(4)
(1,487)
(1,487)
-
(17,987)
(17,987)
-
Intangible assets and goodwill
-
(4,785)
-
-
(5,790)
-
Real estate transfer tax
503,634
-
-
481,510
-
-
Net fair value of debt
-
-
82,053
-
-
267,686
NAV
4,902,192
4,279,793
3,782,254
4,606,481
4,013,761
3,745,313
Basic number of shares including in-the-money dilution effects (in thousands)
176,349
172,640
NAV per share (in €)
27.8
24.3
21.4
26.7
23.2
21.7
EPRA Net Asset Value Metrics
The Net Asset Value is a key performance measure used in the real estate industry. Due to the
evolving nature of ownership structures, balance sheet financing as well as the inclusion of
non-operating activities leading to entities being relatively more actively managed, EPRA has
provided three different metrics to reflect this nature of property companies. The EPRA Net
Asset Value Metrics are defined by EPRA and include the Net Reinstatement Value (NRV),
Net Tangible Assets (NTA) and Net Disposal Value (NDV).
EPRA Net Reinstatement Value (NRV)
assumes that entities never sell assets and aims
to represent the value required to rebuild the entity. The EPRA NRV measure provides
stakeholders with the value of net assets on a long-term basis and excludes assets and
liabilities that are not expected to materialise. Furthermore, real estate transfer taxes are
added back, since the intention of this metric is to reflect what would be required to reinstate
the Company through existing investment markets and the Company’s current capital and
financing structures.
EPRA Net Tangible Assets (NTA)
assumes that entities buy and sell assets, thereby
crystallising certain levels of unavoidable deferred tax. Therefore, the EPRA NTA measure
excludes the value of intangible assets while also taking into consideration the fact that
companies acquire and dispose assets and, in the process, realise certain levels of deferred
tax liabilities.
EPRA Net Disposal Value (NDV)
represents the shareholders’ value under a disposal
scenario, where deferred tax, financial instruments and certain other adjustments are
calculated to the full extent of their liability, net of any resulting tax. Therefore, the EPRA
NDV measure is meant to provide stakeholders with the net asset value in the scenario that
all assets are disposed and/or liabilities are not held until maturity.
(1)
including deferred tax liabilities on derivatives
(2)
including balances held-for-sale
(3)
excluding deferred tax liabilities on assets held-for-sale, non-core assets and development rights in Germany
(4)
not including net change in fair value of derivative financial instruments related to currency effects
GRAND CITY PROPERTIES S.A.
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EPRA NRV
As of December 2024, GCP’s EPRA NRV stood at €4.9 billion, or €27.8 per share, compared
to €4.6 billion and €26.7 per share at the end of 2023. The NRV metric reinstates the full
amount of deferred tax and real estate transfer tax, assuming that assets are never sold and
reflecting the estimated cost required to rebuild the Company. The increase in this metric was
mainly due to the profit for the year, along with an increase in deferred tax, offset by lower
negative adjustment for the fair value measurements of derivative financial instruments.
The EPRA NRV per share result, as well and the EPRA NTA and EPRA NDV per share results,
have been slightly diluted by 3.7 million treasury shares sold in December 2024. The shares
were sold to several international investors at market price.
EPRA NTA
As of December 2024, GCP reported an EPRA NTA of €4.3 billion, or €24.3 per share, higher
compared to €4 billion and €23.2 per share as of December 2023. This increase, similar to
the EPRA NRV, was mostly driven by the profit recorded in 2024.
The EPRA NTA portrays the normal business environment where company’s buy and sell
assets thereby incurring a certain amount of unavoidable deferred tax of the properties sold.
To represent this normal business environment, GCP has classified its portfolio into three
categories of properties which it may not hold long-term, for which it conservatively excludes
deferred tax liabilities. These three categories are outlined below:
• Investment properties held-for-sale:
These properties are actively managed for sale
and the Company expects to dispose them within 12 months.
• Propertied classified in its portfolio as “Other”:
This portfolio may be disposed on
an opportunistic basis and is composed of assets located in cities which do not lie in
GCP’s core portfolio locations and therefore are conservatively classified as properties
which may be disposed. On the other hand, it is also likely that they could remain in
the portfolio for the long term. The Company will continue to evaluate the probability
of these properties being disposed or held long term in upcoming periods and make the
necessary adjustments.
•
Development rights in Germany:
As part of GCP’s value creation process, the Company
identifies development potential and works to obtain the relevant development rights.
Once the development rights are granted, GCP decides whether to dispose the rights or
to develop the projects. As GCP is expected to dispose a portion of the building rights
on an opportunistic basis, the deferred tax regarding the building rights is not added
back in the NTA calculation
EPRA NDV
As of December 2024, the Company recorded an EPRA NDV of €3.8 billion, or €21.4 per
share, slightly higher compared to €3.7 billion or €21.7 per share at the end of 2023. The
EPRA NDV reflects the net asset value under the assumption that all assets are sold, and all
liabilities are settled, without reinstating deferred tax liabilities or real estate transfer tax.
The increase in this metric was primarily driven by the higher equity position, which offset
the impact resulting from the recovery of the market value of the Company’s publicly traded
debt securities in the capital markets which negatively impacts the EPRA NDV and offset the
positive impact as a result of the profit for the year.
Particulars
Fair Value
in €‘000
as % of portfolio
% of deferred
tax added back
Portfolio to be held long term*
7,580,743
85.6%
100%
Investment properties held-for-sale
224,705
2.5%
0%
Portfolio cities classified as "Others"
896,173
10.1%
0%
Development rights in Germany
152,046
1.7%
0%
Total (including assets classified as
held-for-sale)
8,853,667
100%
* all investment properties, excluding investment properties held-for-sale, investment properties in cities classified
as “Others” and development rights in Germany
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EPRA NAV METRICS DEVELOPMENT
(in €)
EPRA NAV METRICS DEVELOPMENT
(in € millions)
EPRA NDV P.S
EPRA NDV
EPRA NTA P.S
EPRA NTA
EPRA NRV P.S
EPRA NRV
Dec 2023
Dec 2023
Dec 2023
Dec 2023
Dec 2023
Dec 2023
Dec 2024
Dec 2024
Dec 2024
Dec 2024
Dec 2024
Dec 2024
21.4
21.7
24.3
23.2
27.8
26.7
3,782
3,745
4,902
4,606
4,280
4,014
+4%
-1%
+5%
+1%
+7%
+6%
GRAND CITY PROPERTIES S.A.
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For the year ended 31 December
Excl. perp.
2024
2023
2024
2023
€’000
Earnings per IFRS income statement
242,131
(638,068)
242,131
(638,068)
Property revaluations and capital gains
(44,028)
890,017
(44,028)
890,017
Change in fair value of financial assets and
liabilities, net
(3,876)
67,015
(3,876)
67,015
Adjustment for perpetual notes attribution
(42,362)
(33,700)
-
-
Deferred tax expenses
16,900
(127,254)
16,900
(127,254)
Contribution to minorities
(4,994)
(4,332)
(4,994)
(4,332)
EPRA Earnings
163,771
153,678
206,133
187,378
Weighted average number of ordinary shares
(basic) in thousands
172,587
172,352
172,587
172,352
EPRA Earnings per share (in €)
0.95
0.89
1.19
1.09
Bridge to FFO I
Add back: Depreciation
6,311
9,323
6,311
9,323
Add back: Finance-related costs
15,121
19,073
15,121
19,073
Add back: Equity settled share-based payments
and other adjustments
2,331
1,862
2,331
1,862
Less: adjustment for perpetual notes attribution
-
-
(42,362)
(33,700)
FFO I
187,534
183,936
187,534
183,936
Weighted average number of ordinary shares
(basic) in thousands, including impact from share-
based payments
172,855
172,634
172,855
172,634
FFO I per share (in €)
1.08
1.07
1.08
1.07
EPRA Earnings
*
* EPRA BPR adjustments not disclosed have a zero value
EPRA Earnings serve as a key measure of a real estate
company’s underlying operational profitability and indicate
the extent to which the Company’s dividend distribution
is covered by its operational income. GCP also provides a
reconciliation of EPRA Earnings to FFO I, another widely
recognised performance metric, as it considers FFO I to be
a more accurate measure of recurring operational profits.
This is further reflected in the Company’s dividend payout
policy, which is based on the FFO I metric.
In line with the updated EPRA methodology, GCP reports
the revised EPRA Earnings KPI under “EPRA Earnings” while
also presenting the previous calculation methodology under
“EPRA Earnings (excl. perp.)”, with the change coming from
the inclusion of the adjustment for the perpetual notes in
the updated EPRA Earnings. A detailed explanation of the
changes in EPRA Earnings calculation is included in the
APM section of the report.
GCP recorded EPRA Earnings of €164 million in 2024,
representing an increase of 7% compared to €154 million
in 2023. EPRA Earnings per share amounted to €0.95 in
2024, higher compared to €0.89 in 2023. Based on the old
methodology, EPRA Earnings for the year 2024 amounted
to €206 million, or €1.19 per share, compared to €187
million, or €1.09 per share for 2023.
The bridge to FFO I accounts for one-off expenses and
non-cash charges not adjusted for in the EPRA Earnings. In
2024, GCP reported FFO I of €188 million, a slight increase
of 2% compared to 2023, reflecting the strong operational
performance.
GRAND CITY PROPERTIES S.A.
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Dec 2024
Consolidated
(as reported)
Share of
Joint
Ventures
Share of
material
associates
Material non-
controlling
interests
Proportionate
consolidation
€’000
Total debt
4,435,299
-
-
-
4,435,299
Equity attributable
to perpetual notes investors
1,212,444
-
-
-
1,212,444
Net foreign currency
derivatives on debt
(7,921)
-
-
-
(7,921)
EPRA Gross Debt
5,639,822
-
-
-
5,639,822
Less:
Cash and liquid assets (including
those under held-for-sale)
(1,514,674)
-
-
-
(1,514,674)
(A) EPRA Net Debt
4,125,148
-
-
-
4,125,148
Owner occupied property
47,488
-
-
-
47,488
Investment property
(1)
8,532,253
-
-
-
8,532,253
Investment properties
of assets held-for-sale
(1)
224,705
-
-
-
224,705
Intangible assets
4,785
-
-
-
4,785
Financial assets
143,890
-
-
-
143,890
Net receivables
99,705
-
-
-
99,705
(B) EPRA Net Assets
9,052,826
-
-
-
9,052,826
Real Estate Transfer Tax (RETT)
503,634
-
-
-
503,634
(C) EPRA Net Assets
(including RETT)
9,556,460
-
-
-
9,556,460
(A/B) EPRA LTV
46%
46%
(A/C) EPRA LTV
(including RETT)
43%
43%
EPRA Loan to Value (LTV)*
(1)
including advanced payments and deposits and excluding right-of-use assets
*
EPRA BPR adjustments not disclosed have a zero value
(1)
including advanced payments and deposits and excluding right-of-use assets
*
EPRA BPR adjustments not disclosed have a zero value
Dec 2023
Consolidated
(as reported)
Share of
Joint
Ventures
Share of
material
associates
Material non-
controlling
interests
Proportionate
consolidation
€’000
Total debt
4,432,324
-
-
-
4,432,324
Equity attributable
to perpetual notes investors
1,236,693
-
-
-
1,236,693
Net foreign currency
derivatives on debt
(50,124)
-
-
-
(50,124)
EPRA Gross Debt
5,618,893
-
-
-
5,618,893
Less:
Cash and liquid assets (including
those under held-for-sale)
(1,230,483)
-
-
-
(1,230,483)
(A) EPRA Net Debt
4,388,410
-
-
-
4,388,410
Owner occupied property
47,577
-
-
-
47,577
Investment property
(1)
8,544,738
-
-
-
8,544,738
Investment properties
of assets held-for-sale
(1)
191,773
-
-
-
191,773
Intangible assets
5,790
-
-
-
5,790
Financial assets
129,079
-
-
-
129,079
Net receivables
152,896
-
-
-
152,896
(B) EPRA Net Assets
9,071,853
-
-
-
9,071,853
Real Estate Transfer Tax (RETT)
481,510
-
-
-
481,510
(C) EPRA Net Assets
(including RETT)
9,553,363
-
-
-
9,553,363
(A/B) EPRA LTV
48%
48%
(A/C) EPRA LTV
(including RETT)
46%
46%
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EPRA Net Initial Yield (NIY) and EPRA “Topped-Up” NIY
*
The EPRA Net Initial Yield (NIY) is intended to serve as a standardised portfolio valuation indicator.
It is calculated by subtracting the passing non-recoverable operating costs from the passing net
rental income as of the end of the period and dividing the result by the fair value of the full property
portfolio (including held-for-sale properties and excluding the value of properties classified as
development rights and new buildings, as these are non-income generating assets), plus an
allowance for estimated purchasers’ costs. EPRA ‘topped-up’ NIY is an additional calculation that
factors into consideration the effects of rent-free periods and other lease incentives.
As of December 2024, the Company’s portfolio recorded an EPRA Net Initial Yield (NIY) of
3.7%, increasing slightly compared to December 2023 as a result of increased annualised net
rental income period over period. EPRA ‘topped-up’ NIY was also 3.7%, as GCP did not record
material rent-free periods and other lease incentives.
Dec 2024
Dec 2023
€’000
Investment property
8,628,962
8,629,083
Investment properties of assets held-for-sale
224,705
195,641
Less: Classified as development rights and new buildings
(187,692)
(182,199)
Complete property portfolio
8,665,975
8,642,525
Allowance for estimated purchaser's costs
651,269
634,036
(A) Gross up complete property portfolio valuation
9,317,244
9,276,561
End of period annualised net rental income (including
impact from assets held-for-sale)
423,986
412,452
Operating costs
(1)
(79,625)
(82,851)
(B) Annualised net rent, aſter non-recoverable costs
344,361
329,601
Notional rent expiration of rent-free periods or other
lease incentives
N/A
N/A
(C) Topped-up net annualised rent
344,361
329,601
(B/A) EPRA NIY
3.7%
3.6%
(C/A) EPRA "topped-up" NIY
3.7%
3.6%
The EPRA Loan-To-Value (LTV) is a metric which aims to assess the leverage of the
shareholder equity within a real estate company. The greatest difference between the EPRA
LTV and the Company calculated LTV metric is the wider categorization of liabilities in EPRA
gross debt and assets in EPRA net assets with the greatest impact coming from the inclusion
of the perpetual notes considered as debt. Under IFRS the Company’s perpetual notes are
accounted for as equity as a result of having no maturity date, being deeply subordinated and
protective to all debt types, and not carrying any covenants and is considered as 100% equity
also for the bond covenant calculations. EPRA LTV also adds net foreign currency derivatives
on debt and working capital adjustments, such as net payables, if applicable to EPRA Gross
Debt and the fair value of intangible assets, financial assets, and net receivables if applicable
to EPRA net assets. Furthermore, EPRA LTV (including RETT) is further adjusted by adding
back the Real Estate Transfer Taxes to the EPRA Net Assets. In its own LTV calculation, the
Company does not make such adjustments.
GCP views its LTV calculation as a better measure of leverage and the debt position which is
closer aligned with the bond covenant calculations. However, for enhanced transparency the
Company presents both LTV metrics.
As of December 2024, EPRA LTV stood at 46%, down from 48% as of December 2023. EPRA
LTV (including RETT) amounted to 43% as of December 2024, down from 46% in December
2023. The change was mainly driven by a relative increase in EPRA net assets due to positive
revaluations in 2024. EPRA net debt also declined, primarily because of operational profits
and property disposals, which strengthened the Company’s liquidity position, as well as the
perpetuals notes exchanges and buyback of debt at slight discount.
(1)
to reach annualised operating costs, cost margins were used for each respective period
*
EPRA BPR adjustments not disclosed have a zero value
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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, as opposed to in-place rents and
physical vacancy. It is calculated by dividing the estimated market rental value of the vacant
spaces in the portfolio by the market rental value of the entire portfolio, including vacancy
rented at market rents.
As of December 2024, the Company’s portfolio recorded an EPRA Vacancy of 3.8%, remaining
stable compared to 3.8% in December 2023. The continued low vacancy rate in 2024 was
primarily driven by strong letting performance, reflecting sustained demand in the Company’s
portfolio locations.
Dec 2024
Dec 2023
€’000
(A) Estimated rental value (ERV) of vacant
space
16,196
16,179
(B) December annualised net rent including
vacancy rented at ERV
428,745
421,708
(A/B) EPRA Vacancy Rate
3.8%
3.8%
(1)
net of operating and other income, excluding maintenance and refurbishment
*
EPRA BPR adjustments not disclosed have a zero value
EPRA Cost Ratios
*
For the year ended 31 December
2024
2023
€’000
Property operating expenses, net
(1)
56,429
60,435
Maintenance and refurbishment
22,953
22,187
Administrative and other expenses
10,632
10,906
Depreciation and amortisation
6,311
9,323
Exclude:
Depreciation and amortisation
(6,311)
(9,323)
(A) EPRA Costs (including direct vacancy costs)
90,014
93,528
Direct vacancy costs
(7,196)
(8,072)
(B) EPRA Costs (excluding direct vacancy costs)
82,818
85,456
Revenue
597,018
607,741
Less: operating and other income
(174,325)
(196,428)
(C) Rental income, net
422,693
411,313
(A/C) EPRA Cost Ratio (including direct vacancy costs)
21.3%
22.7%
(B/C) EPRA Cost Ratio (excluding direct vacancy costs)
19.6%
20.8%
The EPRA Cost Ratios provide a detailed analysis of a Company’s operating costs structure and
provides for increased comparability across companies. The cost ratio is derived by dividing
the Company’s direct administrative expenses and property operating expenses (including
non-recoverable service charges as well as share-based payments) by the rental income for
the year, excluding ground rents. The ratio is calculated both including and excluding the
direct vacancy costs.
As of 2024, GCP’s EPRA Cost Ratios, including and excluding direct vacancy costs, were 21.3%
and 19.6%, respectively, compared to 22.7% and 20.8% in 2023. The decrease in the EPRA
Cost Ratio, including direct vacancy costs, was mainly driven by solid operational growth and
a relative reduction in property operating expenses.
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EPRA Capital Expenditure
The Company recorded EPRA property-related capex in the amount of €156 million in 2024,
compared to €111 million in 2023. EPRA property-related capex includes expenditures
pertaining to acquisitions, pre-letting modifications and other costs, repositioning
investments, and modernisation projects. The increase in EPRA property-related capex was
primarily due to larger volume of acquisitions as well as cost inflation in 2024 as compared
to 2023.
In 2024, GCP acquired properties amounting to €45 million, primarily through gaining control
of investment properties in London which were previously included under loans-to-own.
GCP recorded €25 million in pre-letting modifications and others in 2024, higher compared
to €15 million in 2023. Pre-letting modifications, relate to investment activities outside the
scope of repositioning capex and include large refurbishment projects and the creation of
new lettable areas as well as the completion of properties acquired that are in the final
stages of development. These investments will be supportive of additional rent generation
in future periods.
The Company invested €83 million in repositioning capex in 2024. Repositioning capex comprise
targeted investments that increase the quality, safety and overall features of the assets in the
portfolio, supporting the ability to capture higher rents. Examples of these investments include
apartment renovations and preparation for letting, façade refurbishments and refits, and
For the year ended 31 December
2024
2023
€’000
Acquisitions
45,337
10,079
Investment Properties:
Pre-letting modifications and others
25,358
14,792
Repositioning capex
82,892
76,610
Modernisation
2,400
9,647
EPRA property-related capex
155,987
111,128
*
EPRA BPR adjustments not disclosed have a zero value
upgrades of corridors and staircases, among others. Also included in repositioning capex are
improvements made to the property surroundings, which increases the value of the properties.
Such projects include the renovation or construction of playgrounds, barbeque pits, and other
common meeting areas, among others. The diverse repositioning capex projects support the
value growth of the portfolio and the letting process, resulting in lower vacancies and higher
rent potential. Additionally, as part of the repositioning capex, GCP carries investments aimed
at improving the energy efficiency and CO
2
reduction.
The Company invested €2.4 million in modernisation projects in 2024, relatively lower
compared to €10 million in 2023. Modernisation projects are carried out selectively. Examples
of such projects include measures such as the instalment of elevators and balconies, as
well as improvements in installations that ensure efficient use of power, water and heating.
Modernisation investments also comprise energetic modernisation initiatives aimed at
increasing energy efficiency such as the installation of green energy and heating systems
and windows with better insulation. As a result of the modernisation and repositioning
capex, the Company enhances its portfolio which allows for an increase in rental rates. In
addition to modernisation investments, the Company carries additional investments related
to energy efficiency and CO
2
reduction, which are carried under repositioning capex and pre-
let modification works.
EPRA Like-for-like rental growth
EPRA like-for-like rental growth is a non-financial operational performance measure that the
Company discloses for enhanced transparency. The Company recorded 3.8% EPRA like-for-
like rental growth (“Like-for-like rental growth”), which reflects an increase of €15 million for
the December 2024 annualised rent of the like-for-like portfolio to the comparable number
in December 2023. The like-for-like rental growth as at December 2024 reflects an increase
compared to 3.3% as at December 2023, resulting from stronger in-place rental growth. The
like-for-like rental growth can be broken down further to 3.6% like-for-like rental growth
from the German portfolio and 4.6% from London. Like-for-like rental growth reflects the
growth in the annualised net rent of the portfolio between two periods and is derived from the
like-for-like portfolio, which includes properties held in both December 2024 and December
2023, excluding properties held-for-sale and development rights & invest and which, as of
December 2024, comprises €8.4 billion of investment property reflecting 99% of the portfolio
by value, with the remainder primarily related to acquisitions carried in 2024 and therefore
not part of the like-for-like portfolio. Foreign currencies are accounted for at constant rates
and therefore the impact of currency fluctuations is excluded from the calculation, with FX
rates applied as of December 2024 (see note 2.4 of the notes to the financial statements).
GRAND CITY PROPERTIES S.A.
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Mannheim
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Alternative Performance Measures
In this section, GCP provides an overview of the use of its alternative performance measures.
For enhanced transparency and more industry specific comparative basis, the Company provides market and industry standard performance indicators. GCP provides a set of measures that can
be utilised to assess the Company’s operational earnings, net asset value of the Company, leverage position, debt and interest coverage abilities as well as liquidity headroom. The following
measurements apply to the real estate industry’s specifications and include adjustments where necessary that are in compliance with the standards.
Adjusted EBITDA
The adjusted EBITDA is an industry standard figure indicative
of the Company’s recurring operational profits before interest
and tax expenses, excluding the effects of capital gains,
revaluations, and other non-operational income statement
items such as profits from disposal of buildings, share of
profit from investment in equity-accounted investees and
other adjustments. GCP starts from its
Operating profit
and
adds back the item
Depreciation
and
amortisation
to arrive at
the
EBITDA
value. Non-recurring and non-operational items
are deducted such as the
Property revaluations and capital
gains, Result on the disposal of buildings and Share of profit
from investment in equity-accounted investees
. Further
adjustments are labelled as
Equity settled share-based
payment and other adjustments,
which are subtracted since
these are non-cash expenses.
Funds From Operations I (FFO I)
Funds From Operations I (FFO I) is an industry-wide standard
measure of the recurring operational cash flow of a real
estate company, oſten utilised as a key industry performance
indicator. It is calculated by deducting the
Finance expenses
,
Current tax expenses, Contribution to minorities, Adjustment
for perpetual notes attribution and adding the Contribution
from joint ventures
if applicable
,
to the
Adjusted EBITDA.
To arrive at the
FFO I per share
the
FFO I
is divided by the
Weighted average number of ordinary shares (basic) in
thousands, including impact from share-based payments,
which reflects the impact of the
Equity settled share-based
payments
adjustment in the
Adjusted EBITDA.
Funds From Operations II (FFO II)
FFO II additionally incorporates on top of the
FFO I
the r
esults
from asset disposals
, calculated as the difference between
the disposal values and the property acquisition costs plus
capex, reflecting the economic profit generated on the sale of
the assets. Although, property disposals are non-recurring,
disposal activities provide further cash inflow that increase
the liquidity levels. As a result, this measure is an indicator
to evaluate operational cash flow of a company including the
effects of disposals.
(1)
the excess amount of the sale price, net of transaction costs and total costs (cost price
and capex of the disposed properties)
(1)
named as “Adjustment for accrued perpetual notes attribution” in FY 2017,2018, 2019
(2)
named “FFO I aſter perpetual notes attribution” prior to FY 2020
Adjusted EBITDA reconciliation
Operating Profit
(+)
Depreciation and amortisation
(=)
EBITDA
(+/-)
Property revaluations and capital gains
(+/-) Result on the disposal of buildings
(+/-) Share of profit from investment in equity-accounted investees
(+/-) Equity settled share-based payments and other adjustments
(=) Adjusted EBITDA
FFO I reconciliation
Adjusted EBITDA
(-) Finance expenses
(-) Current tax expenses
(-) Contribution from/(to) joint ventures and minorities, Net
(-) Adjustment for perpetual notes attribution
(1)
(=) (A) FFO I
(2)
(B) Weighted average number of ordinary shares (basic) in
thousands, including impact from share-based payments
(=) (A/B) FFO I per share
FFO II reconciliation
FFO II
FFO I
(+/-) Result from disposal of properties
(1)
(=) FFO II
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Adjusted Funds From Operations (AFFO)
The Adjusted Funds From Operations (AFFO) is an additional
measure of comparison which factors into the FFO I, the Com-
pany’s repositioning capex, which targets value enhancement
and quality increase in the portfolio. Modernisation and pre-
letting capex are not included in the AFFO as it is considered
as an additional investment program, similar to the property
acquisitions, which is conducted at the Company’s discretion.
Therefore, in line with the industry practices, GCP deducts
the
Repositioning capex
from the
FFO I
to arrive at the
AFFO
.
As a result, AFFO is another widely used indicator which tries
to assess residual cash flow for the shareholders by adjusting
FFO I for recurring expenditures that are capitalised.
Loan-to-Value (LTV)
LTV ratio is an acknowledged measurement of the leverage
position of a given firm in the real estate industry. This ratio
highlights to which extent financial liabilities are covered by
the Company’s real estate asset value as well as how much
headroom of the fair value of real estate portfolio is available
compared to the net debt. Following the industry specifications,
GCP calculates the LTV ratio by dividing the total net debt to
the total value at the balance sheet date. Total value of the
portfolio is a combination of the
Investment property
which
includes the
Advanced payments and deposits, inventories -
trading properties, Investment properties of assets held-for-
sale and the investment in equity-accounted investees and
excludes right-of-use assets
. For the calculation of net debt,
total
Cash and liquid assets
are deducted from the
Straight
bonds, Convertible Bonds and Total loan and borrowings.
Total loan and borrowings include the
Short-term loans and
borrowings, debt redemption,
and
Financial debt held-for-
sale
while Straight bonds and Convertible bonds include
Bond
redemption.
Cash and liquid assets is the sum of
Cash and cash
equivalents, Financial assets at fair value through profit and
loss,
and
Cash and cash equivalents held-for-sale.
(1)
including advanced payments and deposits, inventories - trading properties and
excluding right-of-use assets
(2)
excluding right-of-use assets
(3)
including loans and borrowings held-for-sale
(4)
including cash and cash equivalents held-for-sale
Rental Yield and Rent Multiple
The rental yield and rent multiple are industry standard
measures that indicate the rent generation potential of a
property portfolio relative to the value of that property
portfolio and are generally used as
key valuation indicators
by market participants.
The
rental yield
is derived by dividing the
end of period
annualised net rental income
, by the
Investment
property
.
The
end of period annualised net rental income
represents the
annualised monthly in-place rent of the related
investment
property
as at the end of the period. The rent multiple reflects
the inverse of the rental yield and is derived by dividing the
Investment property
by the
end of period annualised net rental
income
. As the Company’s assets classified as
development
rights & invest
do not generate material rental income, these
are excluded from the calculation for enhanced comparability.
GCP 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.
(1)
excluding properties classified as development rights & invest
AFFO reconciliation
FFO I
(-) Repositioning capex
(=) AFFO
Rental yield and rent multiple reconciliation
(A) end of period annualised net rental income
(1)
(B) Investment property
(1)
= (A/B) rental yield
= (B/A) rent multiple
Loan-to-Value reconciliation
(+) Investment property
(1)
(+) Investment properties of assets held-for-sale
(2)
(+) Investment in equity-accounted investees
(=) (A) Total value
(+) Total debt
(3)
(-) Cash and liquid assets
(4)
(=) (B) Net debt
(=) (B/A) LTV
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Unencumbered Assets Ratio
The unencumbered assets ratio is a liquidity measure as
it reflects the Company’s ability to raise secure debt over
these assets and thus provides an additional layer of financial
flexibility and liquidity. Moreover, the unencumbered assets
ratio is important for unsecured bondholders, providing them
with an asset backed security. Hence, the larger the ratio
is, the more flexibility a firm has in terms of headroom and
comfort to its debtholders. Unencumbered assets ratio is
calculated by dividing the
Unencumbered investment property
of the portfolio by the
Total investment properties
which is the
sum of
Investment property, Inventories - trading property
and
Investment properties of assets held-for-sale.
* including investment properties, investment properties of assets held-for-sale and
inventories - trading property
Unencumbered Assets Ratio reconciliation
(A) Unencumbered assets
(B) Total investment properties*
(=) (A/B) Unencumbered Assets Ratio
ICR and DSCR
Two widely recognised debt metrics Interest Coverage Ratio
(ICR) and Debt Service Coverage Ratio (DSCR) are utilised
to demonstrate the strength of GCP’s credit profile. These
metrics are oſten used to see the extent to which interest and
debt servicing are covered by recurring operational profits and
provides implications on how much of cash flow is available
aſter debt obligations. Therefore, ICR is calculated by dividing
the
Adjusted EBITDA
by the
Finance expenses
and DSCR is
calculated by dividing the
Adjusted EBITDA
by the
Finance
expenses
plus the
Amortisation of loans from financial
institutions.
With this ratio, GCP is able to show that with its
high profitability and long-term oriented conservative financial
structure, GCP consistently exhibits high debt cover ratios.
Net Reinstatement Value according to EPRA
(EPRA NRV)
The Net Reinstatement Value measure provides stakeholders
with the value of net assets on a long-term basis and excludes
assets and liabilities that are not expected materialise.
Furthermore, real estate transfer taxes are added back,
since the intention of this metric is to reflect what would
be required to reinstate the Company through existing
investment markets and the Company’s current capital and
financing structures.
The reconciliation of the EPRA NRV starts from the
Equity
attributable to the owners of the Company
and adds
back
Deferred tax liabilities on investment property fair
value measurements of derivative financial instruments.
Further, the EPRA NRV includes
real estate transfer tax
in
order to derive the
EPRA NRV
and provide the reader with
a perspective of what would be required to reinstate the
Company at a given point of time. To arrive at the
EPRA NDV
per share
the
EPRA NDV
is divided by the
Basic number of
shares including in-the-money dilution effects (in thousands).
(1)
including balances held-for-sale, and including deferred tax liabilities on derivatives
(2)
not including net change in fair value of derivative financial instruments related to
currency effect
ICR reconciliation
(A) Adjusted EBITDA
(B) Finance expenses
(=) (A/B) ICR
DSCR reconciliation
(A) Adjusted EBITDA
(B) Finance expenses
(C) Amortisation of loans from financial institutions
(=) [A/(B+C)] DSCR
EPRA NRV reconciliation
Equity attributable to the owners of the Company
(+) Deferred tax liabilities
(1)
(+/-) Fair value measurements of derivative financial
instruments, net
(2)
(+) Real Estate Transfer Tax
(1)
(=) (A) EPRA NRV
(B) Basic number of shares including in-the-money
dilution effects (in thousands)
(=) (A/B) EPRA NRV per share
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Net Tangible Assets according to EPRA
(EPRA NTA)
The Net Tangible Assets measure excludes the value of
intangible assets while also taking into consideration the fact
that companies acquire and dispose assets and, in the process,
realise certain levels of deferred tax liabilities.
The reconciliation of the EPRA NTA begins at the
Equity
attributable to the owners of the Company
and adds back
Deferred tax liabilities on investment property
excluding
deferred tax liabilitiesw related to the assets which are
considered non-core, assets expected to be disposed
within the following 12 months and the development rights
in Germany. In addition,
intangible assets as per the IFRS
Balance sheet
is subtracted and
fair value measurements
of derivative financial instruments
are considered for this
measure of valuation by EPRA. To arrive at the
EPRA NTA
per
share
the
EPRA NTA
is divided by the
Basic number of shares
including in-the-money dilution effects (in thousands).
(1)
excluding deferred tax liabilities
on non-core assets, assets held-for-sale and
development rights in Germany, including deferred tax liabilities on derivatives
(2)
not including net change in fair value of derivative financial instruments related to
currency effect
EPRA NTA reconciliation
Equity attributable to the owners of the Company
(+) Deferred tax liabilities
(1)
(+/-) Fair value measurements of derivative financial instruments, net
(2)
(-) Intangible assets and goodwill
(=) (A) EPRA NTA
(B) Basic number of shares including in-the-money dilution
effects (in thousands)
(=) (A/B) EPRA NTA per share
Net Disposal Value according to EPRA
(EPRA NDV)
The Net Disposal Value measure is meant to provide
stakeholders with the net asset value in the scenario that
all assets are disposed and/or liabilities are not held until
maturity. In this measure of net asset value, deferred tax
liabilities, fair value measurements of financial instruments
and certain other adjustments are considered to the full
extent of their liabilities, without including any optimisation
of real estate transfer tax.
Accordingly, to arrive at the EPRA NDV the starting point is
the
Equity attributable to the owners of the Company
and
includes the
Net fair value of debt.
The adjustment is the
difference between the market value of debt and book value
of debt. To arrive at the
EPRA NDV
per share the
EPRA NDV
is
divided by the
Basic number of shares including in-the-money
dilution effects (in thousands).
EPRA NDV reconciliation
Equity attributable to the owners of the Company
(+/-) Net fair value of debt
(=) (A) EPRA NDV
(B) Basic number of shares including in-the-money dilution
effects (in thousands)
(=) (A/B) EPRA NDV per share
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EPRA Earnings
The EPRA Earnings indicator is intended to serve as a key
indicator of the underlying operational profits for the year in
the context of a real estate company, intended to measure the
extent to which the Company’s dividend distribution is covered
by its operational income. GCP computes EPRA Earnings by
excluding from its IFRS Earnings,
Property revaluations and
capital gains, Result on the disposal of buildings, Changes in
the fair value of financial assets and liabilities (net), Deferred
tax expenses, its Share of profit from investment in equity-
accounted investees, Contribution to minorities and adding
the Contribution from joint ventures.
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. To arrive at the
EPRA Earnings
per share
the
EPRA Earnings
is divided by the
Weighted
average number
of ordinary shares (basic) in thousands.
In accordance with the EPRA guidelines, GCP reports the
updated EPRA Earnings KPI under
EPRA Earnings
while also
providing the previous calculation methodology under
EPRA
Earnings (excl. perp.)
for reference.
GCP also provides a reconciliation of the EPRA Earnings to
the FFO I, another widely-recognized and key performance
measure, as it believes it to be a better measure of recurring
operational profits and given that its dividend payout policy is
based on the FFO I, supporting its importance and relevance.
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.
EPRA Earnings reconciliation
*
EPRA Earnings
Earnings per IFRS income statement
Excluding:
(+/-) Property revaluations and capital gains
(+/-) Result on the disposal of buildings
(+/-) Change in fair value of financial assets and liabilities, net
(+) Deferred tax expenses
(-) Adjustments for perpetual notes attribution
(1)
(+/-) Share in profit from investment in equity-accounted investees
(+/-) Contribution from joint ventures
(+/-) Contribution to minorities
(=) (A) EPRA Earnings
(B) Weighted average number of ordinary shares (basic)
in thousands
(=) (A/B) EPRA Earnings per share
Bridge to FFO I
Excluding:
(+) Depreciation
(+) Finance-related costs
(+/-)Equity settled share-based payments and other adjustments
(-) Adjustment for perpetual notes attribution
(1)
(=) (C) FFO I
(D) Weighted average number of ordinary shares (basic) in
thousands, including impact from share-based payments
(=) (C/D) FFO I per share
(1)
following EPRA methodology update Adjustment for perpetual notes attribution is
included in the EPRA Earnings calculation starting FY 2024
*
EPRA BPR adjustments not disclosed have a zero value
EPRA Loan-To-Value (EPRA LTV)
The EPRA Loan-To-Value (EPRA LTV) is a key metric which
aims to assess the leverage of the shareholder equity within
a real estate company. The main difference between the
EPRA LTV and the Company calculated LTV metric is the
wider categorization of liabilities in EPRA gross debt and
assets in EPRA net assets with the largest impact coming
from the inclusion of the perpetual notes as debt. The
EPRA
LTV
is calculated by dividing the
EPRA Net debt
by
EPRA Net
Assets. EPRA Net debt
is composed of
EPRA Gross Debt
subtracted by
Cash and liquid assets
.
EPRA Gross Debt
is
calculated from
Total financial debt
which is the sum of the
current and non-current portions of
Loans and borrowings
,
Convertible Bonds, Straight Bonds
and adds to this
Foreign
currency derivatives, Equity attributable to perpetual notes
investors,
and
Net Payables
(if applicable).
EPRA Net Assets
is calculated by adding together
Owner-occupied property,
Investment property
and
Investment properties of assets
held-for-sale
(each excluding right-of-use assets),
Intangible
assets, Financial Assets
and
Net receivables
(if applicable).
Net receivables
or
Net payables
are
Payables
net of
Receivables
, and whichever item is greater is applicable to
the calculation.
Additional items which are included in the calculation, but
are currently not applicable to GCP include
Share of net debt
of joint ventures
(in EPRA Gross Debt),
Share of Investment
properties of joint ventures
(in EPRA Gross Assets), and
the
Net minority impact of material minorities
(applicable
to both assets and liabilities) which would be added to the
EPRA LTV calculation if applicable.
EPRA updated the BPR guidelines in September 2024,
introducing an updated methodology which includes
EPRA
LTV
(incl. RETT)
.
EPRA LTV (incl. RETT)
adds back
Real
Estate Transfer Tax (RETT)
to the EPRA Net Assets.
GRAND CITY PROPERTIES S.A.
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Board of Directors’ Report - Business performance & analysis
179
(1)
including balances held-for-sale
(2)
including advance payments and deposits and excluding right of use assets
(3)
net receivables to be used when receivables are greater than payables and net payables
to be used when payables are greater than receivables
*
EPRA BPR adjustments not disclosed have a zero value
EPRA Loan-To-Value (EPRA LTV) reconciliation
*
(+) 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) Net debt
(+) Owner-occupied property
(+)
Investment property
(2)
(+) Investment properties of assets held-for-sale
(2)
(+) Intangible assets
(+) Financial assets
(+) Net receivables
(3)
(=) (B) EPRA Net Assets
(=) (A/B) EPRA LTV
(+) Real Estate Transfer Tax (RETT)
(=) (C) EPRA Net Assets (including RETT)
(=) (A/B) EPRA LTV
(=) (A/C) EPRA LTV (including RETT)
*
EPRA BPR adjustments not disclosed have a zero value
EPRA Vacancy rate
EPRA Vacancy rate is a key disclosure that provides for the
comparable and consistent reporting of vacancy across com-
panies. EPRA Vacancy rate is expressed as a percentage,
being the
Estimated Rental Value (ERV) of vacant space
divi-
ded by the
annualised rental value of the portfolio, including
vacancy rented at ERV
,
for a given month.
(1)
named as “Classified as development rights and new buildings” in FY 2018 and 2019
prior to that, such classification did not exist.
(2)
including net rental income from assets held-for-sale and GCP’s share in equity-
accounted investees
(3)
to reach annualised operating costs, cost margins were used for each respective period
EPRA Net Initial Yield (NIY) and EPRA‚
topped-up‘ NIY
The EPRA Net Initial Yield (NIY) is intended to serve as a
standardised portfolio valuation indicator. It is calculated
by subtracting the passing non-recoverable operating
costs from the passing net rental income as of the end of
the period, and dividing the result by the fair value of the
full property portfolio (including held-for-sale properties
and inventories – trading properties) plus an allowance for
estimated purchasers’ costs. EPRA ‘topped-up’ NIY is an
additional calculation that factors into consideration the
effects of rent-free periods and other lease incentives.
The fair value of the full property portfolio is the sum of
investment property, share of investment properties in
equity accounted investees, investment properties from
assets held-for-sale as well as the inventories - trading
properties.
Properties classified as development rights &
invest are subtracted, as these are non-income generating
assets and therefore not relevant to the NIY calculation.
In addition, this sum is grossed up with an
allowance
for
estimated purchaser’s cost.
The
annualised net rental income
is arrived by subtracting
non-recoverable property operating
costs
based on cost margins for comparability.
EPRA NIY and ‘topped-up’ NIY reconciliation
*
EPRA Net Initial Yield (NIY) and EPRA ‘topped-up’ NIY
(+) Investment property
(+) Investment properties – share of JV
(+) Investment properties of assets held-for-sale
(+) Inventories - trading properties
(-) Classified as development rights & invest
(1)
(=) Complete property portfolio
(+) Allowance for estimated purchasers’ costs
(=) (A) Gross up complete property portfolio valuation
(+) End of period annualised net rental income
(2)
(-) Operating costs
(3)
(=) (B) Annualised net rent, after non-recoverable costs
(+) Notional rent expiration of rent-free periods or other lease
incentives
(=) (C) Topped-up net annualised rent
(=) (B/A) EPRA NIY
(=) (C/A) EPRA “topped-up” NIY
EPRA Vacancy rate reconciliation
(A) ERV of vacant space, for a given month
(B) annualised rental value of the portfolio, including vacancy
rented at ERV, for a given month
(=) (A/B) EPRA Vacancy rate
GRAND CITY PROPERTIES S.A.
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Board of Directors’ Report - Business performance & analysis
180
EPRA Cost Ratios
EPRA Cost Ratio is a key measure to enable meaningful
measurement of the changes in a company’s operating costs
as well as comparability between companies. EPRA Costs
(including direct vacancy costs) is the sum of non-recoverable
operational expenses, maintenance and refurbishment,
administrative expenses
and the
share of expenses from
investments in equity accounted investees
related to the
above. EPRA Costs (excluding direct vacancy costs) eliminate
direct vacancy costs from the EPRA Costs (including direct
vacancy costs).
* including share of operating expenses recovered from tenants
EPRA Cost Ratios reconciliation
EPRA Cost Ratios
(+) Property operating expenses, net
(+) Maintenance and refurbishment
(+) Administrative and other expenses
(+) Share of expenses from investments in equity
accounted investees*
(=) (A) EPRA Costs (including direct vacancy costs)
(-) Direct vacancy costs
(=) (B) EPRA Costs (excluding direct vacancy costs)
Revenue
(-) Operating and other income
(+) Share of net rental income from equity-accounted investees
(=) (C) Rental income, net
(=) (A/C) EPRA Cost Ratio (including direct vacancy costs)
(=) (B/C) EPRA Cost Ratio (excluding direct vacancy costs)
* EPRA BPR adjustments not disclosed have a zero value
EPRA capital expenditure
The EPRA capital expenditure disclosure is based on EPRA
guidelines, which 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.
Pre-letting modifications and others
refer to costs related to
snagging and the final preparation of new buildings as well as
re-opening of converted/refurbished buildings prior to leasing.
Repositioning
Capex
comprise of costs involved in improving
the long-term asset quality.
Modernisation
refers to capex carried on a targeted basis
aimed at further improving the quality of the portfolio and
increasing rents.
EPRA capital expenditure reconciliation
*
(+) Acquisitions
Investment Properties:
(+) Pre-letting modifications and others
(+) Repositioning Capex
(+) Modernisation
(=) EPRA property-related capex
GRAND CITY PROPERTIES S.A.
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Board of Directors’ Report - Business performance & analysis
181
Hamburg
182
CONSOLIDATED FINANCIAL
STATEMENTS
02
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
183
Berlin
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
184
Consolidated statement of profit or loss
Year ended 31 December
2024
2023
Audited
Audited
Note
€’000
Revenue
6
Property revaluations and capital losses
7
(890,017 )
Property operating expenses
8
(253,707 )
(279,050 )
Administrative and other expenses
9
(10,632 )
(10,906 )
Depreciation and amortisation
14
(6,311 )
(9,323 )
Operating profit (loss)
(581,555 )
Finance expenses
10.1
(58,845 )
(56,814 )
Other financial results
10.2
(11,245 )
(86,088 )
Profit (loss) before tax
(724,457 )
Current tax expenses
11.2
(41,275 )
(40,865 )
Deferred tax income (expenses)
11.3
(16,900 )
Profit (loss) for the
year
(638,068 )
Profit (loss) attributable to:
Owners of the Company
(547,507 )
Perpetual notes investors
Non-controlling interests
(124,261 )
(638,068 )
Net earnings (loss) per share attributable to the owners of the Company (in euro):
Basic earnings (loss) per share
12.1
(3.18 )
Diluted earnings (loss) per share
12.2
(3.17 )
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
185
Consolidated statement of comprehensive income
Year ended 31 December
2024
2023
Audited
Audited
€’000
Profit (loss) for the year
(638,068 )
Other comprehensive income:
Items that will not be reclassified to profit or loss in subsequent periods, net of tax:
Gain (loss) on owner-occupied property revaluation
(5,087 )
Items that may be reclassified to profit or loss in subsequent periods, net of tax:
Foreign currency translation, net of investment hedges of foreign operations
Cash flow hedges and cost of hedging
(17,172 )
(14,604 )
Total other comprehensive income (loss) for the year, net of tax
(3,447 )
Total comprehensive income (loss) for the year
(641,515 )
Total comprehensive income (loss) attributable to:
Owners of the Company
(550,529 )
Perpetual notes investors
Non-controlling interests
(124,686 )
(641,515 )
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
186
Consolidated statement of financial position
As at 31 December
2024
2023
Audited
Audited
Note
€’000
ASSETS
Investment property
15
Owner-occupied property
14
Equipment
14
Intangible assets and goodwill
14
Deposits and advance payments
Derivative financial assets
26
Other non-current assets
13
Deferred tax assets
11.3
Non-current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Trade and other receivables
16
Derivative financial assets
26
Assets held-for-sale
24.2
Current assets
Total assets
EQUITY
Share capital
17.1
Treasury shares
17.3
(1,920 )
(83,226 )
Share premium and other reserves
17.4/17.5
Retained earnings
Total equity attributable to the owners of the Company
Equity attributable to perpetual notes investors
17.7
Total equity attributable to the owners of the Company and perpetual notes investors
Non-controlling interests
17.8
Total equity
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
187
Mr. Christian Windfuhr
Chairman and member of the Board of Directors
Ms. Simone Runge-Brandner
Member of the Board of Directors
Mr. Markus Leininiger
Member of the Board of Directors
the Board of Directors of Grand City Properties S.A. authorised these consolidated financial statements to be issued on 17 March 2025.
As at 31 December
2024
2023
Audited
Audited
Note
€’000
LIABILITIES
Loans and borrowings
19.1
Straight bonds
19.2
Derivative financial liabilities
26
Other non-current liabilities
21
Deferred tax liabilities
11.3
Non-current liabilities
Current portion of long-term loans
19.1
Bond redemption
19.2
Trade and other payables
20
Derivative financial liabilities
26
Tax payable
Provisions for other liabilities and charges
22
Liabilities held-for-sale
24.2
Current liabilities
Total liabilities
Total equity and liabilities
Consolidated statement of financial position
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
188
Consolidated statement of changes in equity
Equity attributable to the owners of the Company
€’000
Share capital
r
Treasury
shares
Share
premium
Cash flow
hedge and
cost of hedge
reserves, net
Foreign
exchange
translation
eserves, net
Revaluation
surplus
reserve, net
Other
reserves
Retained
Earnings
Total equity
attributableto
the owners
of the
Company
Equity
attributable
to perpetual
notes
investors
Equity
attributable
to owners of
the Company
and perpetual
notes
investors
Non-
controlling
interests
Total Equity
Balance as at 31 December 2023
(audited)
(83,226 )
(49,155 )
(21,246 )
Profit for the year
Other comprehensive income (loss)
for the year
(17,172 )
Total comprehensive income
(loss) for the year
(17,172 )
Share-based payment
(1)
(1,661 )
(783 )
(783 )
(783 )
Disposal of treasury shares
(2)
(36,953 )
Deconsolidation, transactions
with non-controlling interests
and dividend distributions to non-
controlling interests
(3)
(20,182 )
(18,728 )
Payments to perpetual notes
investors
(24,645 )
(24,645 )
(24,645 )
Repayment to perpetual notes
investors
(4)
(27,145 )
(27,145 )
(470,893 )
(498,038 )
(498,038 )
Issuance of perpetual notes
(4)
Balance as at 31 December 2024
(audited)
(1,920 )
(11,675 )
(23,327 )
(50,052 )
(1) see note 17.3 and 18
(2) see note 17.3
(3) see note 5 and 24.1
(4) see note 17.7
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
189
Consolidated statement of changes in equity
Equity attributable to the owners of the Company
€’000
Share capital
Treasury
shares
Share
premium
Cash flow
hedge and
cost of
hedge
reserves, net
Foreign
exchange
translation
reserves, net
Revaluation
surplus
reserve, net
Other
reserves
Retained
Earnings
Total equity
attributable to
the owners of
the Company
Equity
attributable
to perpetual
notes
investors
Equity
attributable
to owners of
the Company
and perpetual
notes
investors
Non-
controlling
interests
Total Equity
Balance as at 31 December
2022 (audited)
(83,872 )
(67,561 )
(20,654 )
Profit (loss) for the year
(547,507 )
(547,507 )
(513,807 )
(124,261 )
(638,068 )
Other comprehensive income
(loss) for the year
(14,604 )
(2,025 )
(3,022 )
(3,022 )
(425 )
(3,447 )
Total comprehensive income
(loss) for the year
(14,604 )
(2,025 )
(547,507 )
(550,529 )
(516,829 )
(124,686 )
(641,515 )
Share-based payment
(592 )
Initial consolidation,
deconsolidation, transactions
with non-controlling interests
and dividend distributions to non-
controlling interests
(25,164 )
(23,138 )
Disposal of foreign operation
Payments to perpetual notes
investors
(24,750 )
(24,750 )
(24,750 )
Balance as at 31 December
2023 (audited)
(83,226 )
(49,155 )
(21,246 )
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
190
Consolidated statement of cash flows
Year ended 31 December
2024
2023
Audited
Audited
Note
€’000
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit (loss) for the period
(638,068 )
ADJUSTMENTS FOR THE PROFIT (LOSS):
Depreciation and amortisation
14
Property revaluations and capital losses
7
(44,028 )
Net finance expenses
10
Tax and deferred tax expenses (income)
11.4
(86,389 )
Equity settled share-based payment
18.2
Change in working capital
(9,898 )
(38,014 )
Tax paid
(40,651 )
(32,226 )
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment and intangible assets, net
14
(2,635 )
(2,547 )
Acquisition of investment property, capex and advance payments
15.1
(109,319 )
(114,887 )
Disposal of investment property, net
24.1
Disposal of investees, net of cash disposed
24.1
Disposal of (investment in) financial and other assets, net
(38,821 )
Net cash provided by investing activities
GRAND CITY PROPERTIES S.A.
I
The notes on pages 192 to 243 form an integral part of these consolidated financial statements
191
Consolidated statement of cash flows
Year ended 31 December
2024
2023
Audited
Audited
Note
€’000
CASH FLOWS FROM FINANCING ACTIVITIES:
Amortisation of loans from financial institutions
19.3
(5,958 )
(4,417 )
Proceeds (repayments) of loans from (to) financial institutions and others, net
19.3
Proceeds from straight bonds, net
19.3
Redemption and buy-back of straight bond
19.3
(506,280 )
(83,334 )
Proceeds (payment) from (to) perpetual notes investors, net
17.7
(93,756 )
(24,750 )
Disposal of treasury shares
17.3
Transactions with non-controlling interests and dividends paid to non-controlling interests
5
(15,609 )
(17,021 )
Interest and other financial expenses, net
19.3
(65,010 )
(49,035 )
Net cash provided (used) by (in) financing activities
(93,374 )
Net increase in cash and cash equivalents
Change in cash and cash equivalents held-for-sale
24.2
(376 )
Cash and cash equivalents at the beginning of the year
Effect of foreign exchange rate changes
(29 )
Cash and cash equivalents at the end of the year
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
192
Notes to the consolidated
financial statements
1.1. INCORPORATION AND PRINCIPAL ACTIVITIES
on 16 December 2011 as a Société Anonyme (public limited liability company). Its registered
office is at 37, Boulevard Joseph II, L-1840 Luxembourg.
in densely populated areas, predominantly in Germany as well
in London. The Company’s
strategy is to improve its properties through targeted investment and intensive tenant
These consolidated financial statements for the year ended 31 December 2024 comprise the
Company and its investees (“the Group” or “GCP”).
1.2. LISTING ON THE FRANKFURT STOCK EXCHANGE
Since 2012, the Company’s shares are listed on the Frankfurt Stock Exchange. On 9 May 2017
the Company’s shares were uplisted to the Prime Standard of the Frankfurt Stock Exchange.
The Company’s shares are included in the SDAX index of the Deutsche Börse.
As at 31 December 2024 the issued share capital consists of 176,187,899 shares with a par
value of euro 0.10 per share, of which 90,340 shares with suspended voting rights are held in
treasury. For additional information see note 17.3.
1.3. CAPITAL INCREASE, PERPETUAL NOTES AND BOND ISSUANCES
Since 2012, the Company undertook several capital market transactions which included the
issuance of straight bonds, convertible bonds, perpetual notes and equity.
In addition, the Company established Euro Medium Term Notes Programme (“the EMTN
programme”).
For more information see notes 17 and 19.2.
1.4. GROUP RATING
As at 31 December 2024, the Group has the following credit ratings from credit rating agencies:
S&P |
Moody’s |
|
BBB+ |
Baa1 |
|
| Long-term corporate credit rating of the Company |
(negative outlook) |
(negative outlook) |
BBB+ |
Baa1 |
|
| Senior unsecured debt of the Company |
(negative outlook) |
(negative outlook) |
BBB- |
Baa3 |
|
| Subordinated perpetual notes |
(negative outlook) |
(negative outlook) |
Since
2021 Moody’s maintains its public rating the Company on an unsolicited basis.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
193
1.5. DEFINITIONS
In these consolidated financial statements:
The Company | Grand City Properties S.A. |
The Group | The Company and its investees |
Ultimate controlling party | |
The parent company | |
Companies that are controlled by the Company (as defined in | |
Subsidiaries | IFRS 10) and whose financial statements are consolidated with |
those of the Company | |
Companies over which the Company has significant influence | |
(as defined in IAS 28) and that are not subsidiaries. The | |
Associates | Company’s investment therein is included in the consolidated |
financial statements of the Company using equity method of | |
accounting | |
Investees | Subsidiaries, jointly controlled entities and associates |
Related parties | As defined in IAS 24 |
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:
y
Financial assets at fair value through profit or loss;
y
Investment properties are measured at fair value;
y
Owner-occupied properties are measured at fair value;
y
Derivative financial assets and liabilities;
y
Assets and liabilities classified as held for sale;
y
Deferred tax liability on fair value gain on investment property, Owner-occupied property
and derivative financial instruments.
The preparation of consolidated financial statements in accordance with IFRS 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 revised on a regular basis. Revisions in
accounting estimates are recognised 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.
Judgements
In the process of applying the Group’s accounting policies, management has made the
following judgements, which have the most significant effect on the amounts recognised 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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
194
>
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 performance obligation 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 that 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 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 recognised 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 when all the significant conditions
are satisfied.
>
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 upon their relative fair values, and no goodwill
or deferred tax is recognised.
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 the 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
properties. 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 make assumptions that are mainly based on market conditions existing
at the end of each reporting period.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
195
>
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 recognises 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 and deferred tax
provisions in the period in which such determination is made. Deferred tax assets are
recognised for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits, together
with future tax planning strategies. Significant judgement is also applied for deferred
tax liabilities related to the investment property. Deferred tax liabilities consider the
theoretical disposal of investment properties 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 amortised 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
The Group’s consolidated financial statements are presented in euro, which is also the
Company’s functional currency, and rounded to the nearest thousand (€’000) unless stated
otherwise.
For each entity, 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 the transaction first qualifies for recognition.
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 recognised 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 recognised 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 recognised 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 recognised in other
comprehensive income or profit or loss are also recognised 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 recognises 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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
196
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 recognised in other comprehensive income and accumulated in a separate component
of equity under the header of foreign currency translation reserve. On 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.
The Group’s main foreign exchange rates versus the euro were as follows:
EUR/GBP | EUR/HKD | EUR/CHF | EUR/JPY | |
As of 31 December 2024 | 0.829 | 8.069 | 0.941 | 163.060 |
As of 31 December 2023 | 0.869 | 8.631 | 0.926 | 156.330 |
Change (%) | (4.6)% | (6.5)% | 1.6% | 4.3% |
Average exchange rate during the year | 0.847 | 8.445 | 0.953 | 163.852 |
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 several 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 1 January 2024:
>
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback
In September 2022, the 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 recognise 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 aſter 1 January
2024 and must applied retrospectively to sale and leaseback transactions entered into
aſter 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
y
Classification of Liabilities as Current or Non-current (issued on 23 January 2020);
y
Classification of Liabilities as Current or Non-current - Deferral of Effective Date
(issued on 15 July 2020); and
y
Non-current Liabilities with Covenants (issued on 31 October 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 25 May 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.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
197
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
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at 31 December 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:
y
Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)
y
Exposure, or rights, to variable returns from its involvement with the investee
y
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:
y
The contractual arrangement(s) with the other vote holders of the investee
y
Rights arising from other contractual arrangements
y
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.
Unrealised gains arising from transactions with equity-accounted investees are eliminated
against the investment to the extent of the Group’s interest in the investee. Unrealised
losses are eliminated in the same way as unrealised 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 recognised 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 recognised in the consolidated statement of profit or loss
under ‘Property revaluation 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 recognised in other comprehensive income and
accumulated in equity, the amounts previously recognised 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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
198
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 bring
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
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 organised
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.
Any contingent consideration to be transferred by the acquirer will be recognised 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 recognised in the
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 recognised 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 financial assets 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
recognised at their fair value at the acquisition date, except that:
y
deferred tax assets or liabilities and liabilities or assets related to employee benefit
arrangements are recognised and measured in accordance with IAS 12 Income Taxes and
IAS 19 Employee Benefits respectively;
y
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
y
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.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests and any previous
interest held over the net identifiable assets acquired and liabilities assumed). If the fair
value of the net assets acquired is 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 recognised 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 is
recognised in profit or loss.
Aſter initial recognition, goodwill is measured at cost less any accumulated impairment
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
199
losses. For the purpose of impairment testing, goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Group’s cash-generating units (CGUs)
that are expected to benefit from the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU and part of the operation within that unit is
disposed of, the goodwill associated with the disposed operation is included in the carrying
amount of the operation when determining the gain or loss on disposal. Goodwill disposed
in these circumstances is measured based on the relative values of the disposed operation
and the portion of the CGU.
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 (see above), or additional assets or liabilities are recognised, to reflect
new information obtained about facts and circumstances that existed at the acquisition date
that, if known, would have affected the amounts recognised at that date.
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
■
Sale of properties
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 recognised when it arises. Initial direct costs incurred in negotiating and arranging
an operating lease are capitalised to the investment property and recognised 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 recognised 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. Therefore, the Group records
revenue on a gross basis.
Sale of property
The Group enters into contracts with customers to sell properties that are either
complete or under development.
The sale of completed property constitutes a single performance obligation and the Group has
determined that this is satisfied at the point in time when control transfers. For unconditional
exchange of contracts, this generally occurs when legal title transfers to the customer. For
conditional exchanges, this generally occurs when all significant conditions are satisfied.
For contracts relating to the sale of properties under development, the Group is responsible
for the overall management of the project and identifies various goods and services to
be provided. In such contracts, the goods and services are not distinct and are generally
accounted for as a single performance obligation. Depending on the terms of each contract,
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
200
the Group determines whether control is transferred at a point in time or over time.
The Group has elected to make use of the following practical expedients:
y
Contract costs incurred related to contracts with an amortization period of less than one
year have been expensed as incurred.
y
The Group applies the practical expedient in paragraph 121 of IFRS 15 and does not
disclose information about remaining performance obligations for contracts in which the
Group has a right to consideration from tenants in an amount that corresponds directly
with the value to the tenant of the Group’s performance completed to date.
y
The Group does not adjust the transaction price for the effects of significant financing
component since at contract inception it is expected that the period between when the
entity transfers the services to tenants and when the tenants pay for these services will
Finance income comprises interest income on funds invested.
Finance expenses comprise interest expense on bank loans, third party borrowings and bonds.
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-off payments.
Financial expenses are recognised as they are incurred in the consolidated statement of
Current tax
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 recognised directly in other comprehensive income
or equity is recognised in other comprehensive income (OCI) or in equity and not in the
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 provided using the liability method on temporary differences between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes at the
reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
y
When the deferred tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither accounting profit nor taxable profit or loss. In such case, no
deferred tax liability is recognized either at initial recognition or in subsequent periods,
even if the temporary difference reverses over time.
y
In respect of taxable temporary differences associated with investments in subsidiaries,
branches and associates and interests in joint arrangements, when the timing of the
reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carryforward
of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carryforward of unused tax credits and unused tax losses can
be utilised, except:
y
When the deferred tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss. In such case, no deferred tax liability is recognized either at initial
recognition or in subsequent periods, even if the temporary difference reverses over time
y
In respect of deductible temporary differences associated with investments in
subsidiaries, branches and associates and interests in joint arrangements, deferred tax
assets are recognised only to the extent that it is probable that the temporary differences
will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised.
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 utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
201
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
in the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the reporting date.
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 recognised on subsequent
changes to the taxable and temporary differences.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit
or loss. Deferred tax items are recognised 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 recognised 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 recognised 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 realise 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 the
Owner-occupied properties are measured at fair value less accumulated depreciation and
impairment losses recognised 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 recognised in profit or loss, the increase is recognised in profit and loss.
A revaluation deficit is recognised in the statement of profit or loss, except to the extent that
it offsets an existing surplus on the same asset recognised in the asset revaluation surplus.
Equipment includes furniture, fixtures and office equipment and is measured at cost less
accumulated depreciation and impairment losses.
Depreciation is recognised in profit or loss using the straight line method over the 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 | 7.33 |
Property | 3 |
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
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 for repairs and maintenance is charged to profit or loss of the year in which it is
incurred. The cost of major renovations and other subsequent 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 derecognised 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 and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in the
Expenditure on research activities is recognised in profit or loss as incurred.
Development expenditure is capitalised 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 recognised in profit or loss as incurred. Subsequent
to initial recognition, development expenditure is measured at cost less accumulated
amortisation and any accumulated impairment losses.
Other intangible assets that are acquired by the Group and have finite useful lives are
measured at cost less accumulated amortisation and any accumulated impairment losses.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
202
Subsequent expenditure is capitalised only when it increases the future economic benefits
embodied in the specific asset to which it relates. All other expenditure, including
expenditure on internally generated goodwill and brands, is recognised in profit or loss
as incurred.
Amortisation 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 recognised in profit or loss.
The estimated useful lives for current and comparative periods are as follows:
% | |
Soſtware | 20-30 |
Amortisation methods, useful lives and residual values are reviewed at each reporting date
and adjusted if appropriate.
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated
Deferred income represents income which relates to future periods.
>
Prepayments
The Group receives prepayments from tenants for ancillary services and other charges on
a monthly basis. Once a year, the prepayments received from tenants are settled against
the operating cost receivables.
>
Tenancy deposits
Tenancy deposits are paid to ensure the tenant occupied real estate is returned in good
Investment property comprises property that is 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 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 recognised 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).
Investment property is derecognised either when it 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 recognised 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, noncash consideration, and consideration
payable to the buyer (if any) in accordance with the requirements for determining the
GRAND CITY PROPERTIES S.A.
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Notes to the Consolidated Financial Statements
203
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 statement of financial position.
When the Group is committed to a sale plan involving loss of control of a subsidiary, 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 non-controlling
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.
i.
Initial recognition and measurement
Financial assets are classified at initial recognition as subsequently measured at amortised
cost, fair value through other comprehensive income (OCI), or fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial assets’
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 3.5.
In order for a financial asset to be classified and measured at amortised 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 recognised
on the trade date, i.e., the date that the Group commits to purchase or sell the asset.
ii. Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified in four
categories:
1.
Financial assets at amortised 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 amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
y
The financial asset is held within a business model with the objective to hold financial
assets in order to collect contractual cash flows, and
y
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 amortised cost are subsequently measured using the effective interest
rate (EIR) method and are subject to impairment. Gains or losses are recognised in profit
or loss when the asset is derecognised, modified or impaired refer to expected credit loss
model in determined impairment.
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:
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
204
y
The financial asset is held within a business model with the objective of both holding to
collect contractual cash flows and selling, and
y
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 recognised in consolidated statement of profit or loss
and computed in the same manner as for financial assets measured at amortised cost. The
remaining fair value changes are recognised in OCI. Upon de-recognition, the cumulative fair
value change recognised 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
recognised 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
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 amortised 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 recognised in the consolidated
statement of profit or loss.
Dividends on listed equity instruments are also recognised as other financial results in the
consolidated statement of profit or loss when the right of payment has established.
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 recognised 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-recognised (i.e., removed from the Group’s consolidated
statement of financial position) when:
y
The rights to receive cash flows from the asset have expired, or
y
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
recognise the transferred asset to the extent of its continuing involvement. In that case, the
Group also recognises 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 maximum amount of
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
205
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments
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 recognised 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 aſter 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 recognises 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 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
i.
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
ii. Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
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 recognised 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 value through
profit or loss.
This is the category most relevant to the Group. Aſter initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortised cost using the EIR method.
Gains and losses are recognised in profit or loss when the liabilities are de-recognised as
well as through the EIR amortization process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
iii. De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
206
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
III. 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 aſter 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 derecognised. Therefore, as financial instruments
transition from IBOR to RFRs, the Group applies judgement to assess whether the transition
has taken place on an economically equivalent basis. In making this assessment, the Group
considers the extent of any changes to the contractual cash flows as a result of the transition
and the factors that have 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 Association (ISDA) or which is implicit in the market forward rates
for the RFR.
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 recognised amounts and there is an intention to settle on a net basis, or to realise
SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
When shares recognised as equity are repurchased, the amount of the consideration paid
including acquisition direct costs is recognized as a deduction from equity. Repurchased
shares are classified as treasury shares, presented in the treasury share reserve and are not
revalued aſter the acquisition. When treasury shares are subsequently sold or reissued, the
amount received is recognized as an increase in equity and the resulting surplus or deficit on
VII.
PERPETUAL NOTES
Perpetual notes have no maturity date and may be redeemed by the Company, at its sole
discretion, on certain dates. The Perpetual notes are recognised 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
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING
Initial recognition and subsequent measurement
The Group uses derivative financial instruments, such as forward currency contracts and
options, 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
recognised 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:
y
Fair value hedges when hedging the exposure to changes in the fair value of a recognised
asset or liability or an unrecognised commitment.
y
Cash flow hedges when hedging the exposures to variability in cash flows that is either
attributable to a particular risk associated with a recognised asset or liability or a highly
probable forecast transaction or the foreign currency risk in an unrecognised firm commitment.
y
Hedges of a net investment in a foreign operation.
GRAND CITY PROPERTIES S.A.
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Notes to the Consolidated Financial Statements
207
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.
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 of the following effectiveness requirements:
y
There is ‘an economic relationship’ between the hedged item and the hedging instrument.
y
The effect of credit risk does not ‘dominate the value changes’ that result from that
economic relationship.
y
The hedge ratio of the hedging relationship is the same as that resulting from the quantity
of the hedged item that the Group actually hedges and the quantity of the hedging
instrument that the Group actually 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:
>
Fair value hedges
The change in the fair value of a hedging instrument is recognised 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
recognised in the consolidated statement of profit or loss.
Where the Group designates only the spot element as a hedging instrument, the forward
element is recognised in OCI and accumulated in a separate component of equity under
cost of hedging reserve as time period related element and amortised to the consolidated
statement of profit or loss over the hedged period.
If the hedged item is derecognised, the unamortised fair value is recognised immediately
in profit or loss.
>
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. Aſter 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.
>
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 as a hedging instrument. The forward
element is recognised in OCI and accumulated in a separate component of equity under
cost of hedging reserve as time period related element and amortised 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 recognised as OCI while any gains or losses relating to the ineffective portion are
recognised 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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
208
>
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 an
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 item
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 up to three months, that are readily convertible
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
income statement. Refurbishment that takes place subsequent to the property valuation,
thus excluded in its additional value, will also be stated in this account, until the next
An operating segment is a component of the Group that meets the following three criteria:
y
Is engaged in business activities from which it may earn revenues and incur expenses,
including revenues and expenses relating to intragroup transactions;
y
whose operating results are regularly reviewed by the Group’s chief operating decision
maker to make decisions about resources to be allocated to the segment and assess its
performance; and
y
For which separate financial information is available.
The Group has one reportable operating segment which refers to rental income from owned
3.18. COMPARATIVES
Where necessary, comparative figures have been adjusted to conform to changes in
presentation in the current period.
Earnings per share are calculated by dividing the net profit attributable to owners of the
Company by the weighted number of Ordinary shares outstanding during the period.
Basic earnings per share only include shares that were actually outstanding during the
period. Potential Ordinary shares (convertible securities such as convertible debentures,
warrants and employee options) 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 of earnings of investees
is included based on the earnings per share of the investees multiplied by the number of
The grant-date fair value of equity-settled share-based payment awards granted to employees
is generally recognised as an expense, with a corresponding increase in equity, over the vesting
period of the awards. The amount recognised 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 recognised is based on the number of awards that
Provisions are recognised 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 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 payable as at the
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.
GRAND CITY PROPERTIES S.A.
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Notes to the Consolidated Financial Statements
209
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 recognises lease liabilities to make
lease payments and right-of-use assets representing the right to use the underlying assets.
The Group recognises 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 recognised, 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. The
right-of-use assets are classified and presented as part of the line item ‘Investment property’
II) Lease liabilities
At the commencement date of the lease, the Group recognises 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
recognised as expenses (unless they are incurred to produce inventories) 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. Aſter 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 cash payments for interest portion of lease liabilities under “interest
and other financial expenses, net” in the consolidated statement of cash flows.
III) 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
recognised as expense on a straight-line basis over the lease term.
Group as a lessor
The new and amended standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the Group’s financial statements are disclosed below, if they are
expected to have an impact on the Group’s financial statements. The Group intends to adopt
these new and amended standards and interpretations, if applicable, when they become
effective.
The following amendments were adopted by the EU, but not yet effective in 2024:
>
Amendments to IAS 21 The effects of Changes in Foreign Exchange Rates: Lack of
Exchangeability (issued on 15 August 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 been
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
210
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair value at 31 December 2024 and 31 December
2023 on
a recurring basis:
As at 31 December 2024 |
As at 31 December 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 |
market |
inputs |
inputs |
Carrying |
Total |
market |
inputs |
inputs |
|
amount |
fair value |
(Level 1) |
(Level 2) |
(Level 3) |
amount |
fair value |
(Level 1) |
(Level 2) |
(Level 3) |
|
| €’000 |
||||||||||
FINANCIAL ASSETS |
||||||||||
Financial assets at fair value |
||||||||||
through profit or loss (*) |
244,311 |
244,311 |
97,878 |
95,013 |
51,420 |
185,408 |
185,408 |
89,451 |
61,804 |
34,153 |
Derivative financial assets |
39,078 |
39,078 |
- |
39,078 |
- |
71,383 |
71,383 |
- |
71,383 |
- |
Total financial assets |
283,389 |
283,389 |
97,878 |
134,091 |
51,420 |
256,791 |
256,791 |
89,451 |
133,187 |
34,153 |
FINANCIAL LIABILITIES |
||||||||||
Derivative financial liabilities |
121,131 |
121,131 |
- |
121,131 |
- |
69,193 |
69,193 |
- |
69,193 |
- |
Total financial liabilities |
121,131 |
121,131 |
- |
121,131 |
- |
69,193 |
69,193 |
- |
69,193 |
- |
(*) including non-current financial assets at fair value through profit or loss, see note 13
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
211
The Group also has a number of financial instruments which are not measured at fair value in the consolidated statement of financial position. For the majority of these instruments, the fair values
are not materially different to their carrying amounts, since interest receivable/payable is either close to current market rates or the instruments are short-term in nature. Significant differences
were identified for the following instruments as at 31 December 2024 and 31 December 2023:
| As at 31 December 2024 | As at 31 December 2023 | |||||||||
Fair value measurement using | Fair value measurement using | |||||||||
Significant | Significant | Significant | Significant | |||||||
Quoted prices | observable | unobservable | Quoted prices | observable | unobservable | |||||
Carrying | Total | in active market | inputs | inputs | Carrying | Total | in active market | inputs | inputs | |
amount | fair value | (Level 1) | (Level 2) | (Level 3) | amount | fair value | (Level 1) | (Level 2) | (Level 3) | |
| €’000 | ||||||||||
FINANCIAL LIABILITIES | ||||||||||
Loans and borrowings (1) | 929,439 | 928,767 | - | 928,767 | - | 872,427 | 878,281 | - | 878,281 | - |
Straight bonds (2) | 3,505,860 | 3,397,216 | 3,213,409 | 183,807 | - | 3,559,897 | 3,197,414 | 3,030,389 | 167,025 | - |
Total financial liabilities | 4,435,299 | 4,325,983 | 3,213,409 | 1,112,574 | - | 4,432,324 | 4,075,695 | 3,030,389 | 1,045,306 | - |
(1) including current portion of long-term loans
(2) including bond redemption
Fair value hierarchy
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
maximise 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 recognise transfers into and transfers out of fair value hierarchy
levels as at the end of the reporting period.
There were no transfers between level 1, level 2 and level 3 during the year.
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 flows
(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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
212
Valuation techniques used to determine fair values:
T
he following methods and assumptions were used to estimate the fair values:
y
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 flows method with observable inputs.
y
There’s an active market for the Group’s listed equity investments and quoted debt instruments.
y
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 aſter
considering the period of restrictions and the nature of the underlying investments.
y
The Group enters into derivative financial instruments with various counterparties, principally
financial institutions with investment grade credit ratings. Interest rate and foreign exchange
swap and forward, collar and cap 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
ACQUISITIONS AND DISPOSALS OF NON-CONTROLLING
INTERESTS
During the year, the Group changed its holdings rates in subsidiaries without losing control. The
carrying amount of the Group’s interest and non-controlling interests was adjusted to reflect
the changes in their relative interest in the subsidiaries. During the year the Company acquired,
disposed and distributed dividend to non-controlling interests in the amount of euro 5.7 million,
euro 5.7 million and 17.1 million respectively. The results of the transactions of euro 1.5 million
are recognised directly in equity attributed to the owners of the Company. In addition, the Group
Year ended 31 December | ||
2024 | 2023 | |
€’000 | ||
Net rental income | 422,693 | 411,313 |
Operating and other income | 174,325 | 196,428 |
597,018 | 607,741 | |
The Group is not exposed to significant revenue derived from an individual customer.
During the year, approximately 77% (2023: 77%) of the Group’s net rental income derive
from Germany, 22% (2023: 22%) derive from the United Kingdom and 1% (2023: 1%) from
PROPERTY REVALUATIONS AND CAPITAL LOSSES
Year ended 31 December | ||
2024 | 2023 | |
€’000 | ||
Property revaluations (see note 15.1) | 49,560 | (881,382) |
Capital losses (see note 24.1) | (5,532) | (8,635) |
44,028 | (890,017) | |
Year ended 31 December | ||
2024 | 2023 | |
€’000 | ||
Purchased services | (177,434) | (200,384) |
Maintenance and refurbishment | (22,953) | (22,187) |
Personnel expenses | (26,246) | (26,342) |
Other operating costs | (27,074) | (30,137) |
(253,707) | (279,050) | |
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
213
Year ended 31 December |
||
2024 |
2023 |
|
€’000 |
||
Personnel expenses |
(4,613) |
(4,441) |
Audit and accounting costs |
(3,037) |
(2,818) |
Legal and professional consultancy fees |
(2,283) |
(2,666) |
Marketing and other expenses |
(699) |
(981) |
(10,632) |
(10,906) |
|
During the year, the Group recorded euro 1.4 million (2023: euro 1.7 million) and euro 1.6
million (2023: euro 1.2 million) related to audit and audit-related fees provided by KPMG
audit firms and other audit firms, respectively, and less than euro 0.1 million (2023: less than
euro 0.1 million) and euro 0.4 million (2023: euro 0.3 million) related to tax and consultancy
Year ended 31 December |
||
2024 |
2023 |
|
€’000 |
||
10.1. FINANCE EXPENSES |
||
Finance expenses from financial institutions and |
||
third parties, net |
(3,852) |
(8,755) |
Finance expenses from straight bonds, net |
(54,993) |
(48,059) |
(58,845) |
(56,814) |
|
10.2. OTHER FINANCIAL RESULTS |
||
Changes in fair value of financial assets |
||
and liabilities, net |
3,876 |
(67,015) |
Finance-related costs |
(15,121) |
(19,073) |
(11,245) |
(86,088) |
|
TAXATION
11.1. TAX RATES APPLICABLE TO THE GROUP
The Company is subject to taxation under the laws of Luxembourg. The corporation tax rate
for Luxembourg companies 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 euro 175,000 will decrease from 15% to 14%, and
for companies with taxable income exceeding euro 200,000, 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 1 January 2025 and the new corporation tax rate for Luxembourg
companies will be 23.87% .
The German subsidiaries with property are subject to taxation under the laws of Germany.
Income taxes are calculated using a federal corporate tax of 15% as of 31 December 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%).
German property taxation includes taxes on the holding of real estate property.
The Cypriot subsidiaries are subject to taxation under the laws of Cyprus. The 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 defense
contribution at the rate of 17% (2023: 30%). In such cases this interest will be exempt from
corporation tax.
In certain cases, overseas dividend income of Cyprus tax resident companies may be subject
to special defense contribution at a flat rate of 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 United Kingdom subsidiaries with property are subject to taxation under the laws of the
United Kingdom. Income taxes are calculated using a federal corporate tax (that includes
capital gains) of 25% for 31 December 2024 (2023: 25%).
Subsidiaries in other jurisdictions are subject to corporate tax rate of up to 27.9%
(2023: 27.9%).
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
214
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’s consolidat-
ed revenue does not exceed euro 750 million, meaning it does not independently meet the
applicability threshold of the Pillar Two rules.
However, as the Group’s ultimate parent company exceeds the threshold, the Group may be
subject to top-up tax assessments at the parent level or through jurisdictional-level imple-
mentations of Pillar Two rules.
In line with the amendments to IAS 12 (Income Taxes) issued in May 2023, the Group has ap-
plied the temporary exception to recognizing deferred taxes related to Pillar Two. The Group
does not expect a material top-up tax charge under these rules for the 2024 financial year.
Among the jurisdictions in which the Group operates, Cyprus currently has a statutory cor-
porate tax rate of 12.5%, below the 15% minimum threshold. However, based on the Group’s
current assessment, the impact of Pillar Two is expected to be immaterial.
The Group continues to monitor legislative developments and will provide further dis-
closures in future reporting periods as additional guidance and implementation details
become available.
11.2.
CURRENT TAX IN CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Year ended 31 December |
||
2024 |
2023 |
|
€’000 |
||
Corporate income tax |
(27,456) |
(26,112) |
Property tax |
(13,819) |
(14,753) |
Charge for the year |
(41,275) |
(40,865) |
MOVEMENT IN DEFERRED TAX ASSETS (LIABILITIES) NET
Investment |
Owner-occupied |
Derivative financial |
Losses |
Others |
Total |
|
property |
property |
instruments, net |
carried forward |
|||
€’000 |
||||||
BALANCE AS AT 1 JANUARY 2023 |
(768,710) |
(7,696) |
(2,479) |
53,774 |
(9,720) |
(734,831) |
Credit (charge) to profit or loss for the year |
96,114 |
174 |
(7,100) |
15,802 |
22,264 |
127,254 |
Credit (charge) to other comprehensive income for the year |
(1,083) |
956 |
6,762 |
139 |
- |
6,774 |
Deconsolidation |
1,158 |
- |
- |
(144) |
- |
1,014 |
Transfers |
19,870 |
- |
- |
(3,582) |
(12,544) |
3,744 |
BALANCE AS AT 31 DECEMBER 2023 |
(652,651) |
(6,566) |
(2,817) |
65,989 |
- |
(596,045) |
Credit (charge) to profit or loss for the year |
(38,949) |
151 |
1,973 |
19,925 |
- |
(16,900) |
Credit (charge) to other comprehensive income for the year |
(2,377) |
(136) |
826 |
48 |
- |
(1,639) |
Deconsolidation |
3,850 |
- |
(18) |
(720) |
- |
3,112 |
Transfers |
5,077 |
- |
- |
(818) |
- |
4,259 |
BALANCE AS AT 31 DECEMBER 2024 |
(685,050) |
(6,551) |
(36) |
84,424 |
- |
(607,213) |
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
215
As at 31 December 2024 the Group has unused tax losses for which no deferred tax assets
have been recognised as it is not considered probable that there will be future taxable
profits available. These deferred tax assets which have not been recognised amounted to
approximate euro 83 million (2023: 79 million). The unused tax losses as at 31 December
2024 amounted to euro 346 million (2023: euro 316 million) and can be carried forward for
up to 17 years starting from 2035 until 2040.
The Group has applied the initial recognition exception on acquisitions of investment
property which did not meet the definition of business combination. As at 31 December
2024, the deferred tax liabilities which have not been recognised in the consolidated
11.4. RECONCILIATION OF EFFECTIVE TAX RATE
Year ended 31 December | ||
2024 | 2023 | |
€’000 | ||
Profit (loss) before tax | 300,306 | (724,457) |
Statutory tax rate | 24.94% | 24.94% |
Tax computed at the statutory tax rate | 74,896 | (180,680) |
Decrease in taxes on income resulting | ||
from the following factors: | ||
Effect of different tax rates of subsidiaries | ||
| operating in other jurisdictions | (4,353) | 56,861 |
Effect of deferred tax assets not recognised | ||
| in prior years | (11,688) | - |
Effect of permanent differences | 2,767 | 40,663 |
Others | (3,447) | (3,233) |
Tax and deferred tax expenses (income) | 58,175 | (86,389) |
Berlin
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
216
12.1. BASIC EARNINGS (LOSS) PER SHARE
The calculation of basic earnings per share as of 31 December 2024 is based on the profit attributable
to ordinary shareholders of euro 196,626 thousand (2023: euro 547,507 thousand loss), and a
weighted average number of ordinary shares outstanding of 172,587 thousand (2023: 172,352
thousand), calculated as follows:
Year ended 31 December |
||
PROFIT (LOSS) ATTRIBUTED TO ORDINARY |
||
SHAREHOLDERS (BASIC) | 2024 | 2023 |
€’000 |
||
Profit (loss) for the year, attributable to the owners |
||
of the Company |
196,626 |
(547,507) |
Year ended 31 December |
||
| WEIGHTED AVERAGE NUMBER OF |
||
ORDINARY SHARES (BASIC) |
2024 |
2023 |
Thousand of shares |
||
Issued ordinary shares, net of treassury |
||
shares on January 1 |
172,356 |
172,326 |
Share based payment |
19 |
26 |
Disposal of treasury shares (see note 17.3) |
212 |
- |
Weighted average number of ordinary |
||
shares as at 31 December |
172,587 |
172,352 |
Basic earnings (loss) per share (euro) |
1.14 |
(3.18) |
12.2. DILUTED EARNINGS (LOSS) PER SHARE
The calculation of diluted earnings per share at 31 December 2024 is based on the profit attributable
to ordinary shareholders of euro 196,626 thousand (2023: euro 547,507 thousand loss), and a
weighted average number of ordinary shares outstanding aſter adjustment for the effects of all
dilutive potential ordinary shares of 172,874 thousand (2022: 172,633 thousand), calculated as
follows:
Year ended 31 December |
||
PROFIT (LOSS) ATTRIBUTED TO ORDINARY |
||
SHAREHOLDERS (DILUTED) |
2024 |
2023 |
| Profit (loss) for the year, attributable to the |
€’000 |
|
owners of the Company (basic) |
196,626 |
(547,507) |
Profit (loss) for the year, attributable to the |
||
owners of the Company (diluted) |
196,626 |
(547,507) |
Year ended 31 December |
||
WEIGHTED AVERAGE NUMBER OF ORDINARY |
||
SHARES (DILUTED) |
2024 |
2023 |
Thousand of shares |
||
Issued ordinary shares, net of treassury shares |
||
on January 1 |
172,356 |
172,326 |
Share based payment |
19 |
26 |
Disposal of treasury shares (see note 17.3) |
212 |
- |
Effect of equity settled share-based payment |
287 |
281 |
Weighted average number of ordinary shares |
||
as at 31 December |
172,874 |
172,633 |
Diluted earnings (loss) per share (euro) |
1.14 |
(3.17) |
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
217
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
Tenancy deposit (1) |
46,622 |
46,523 |
Investment in other long-term |
||
assets (2) |
21,155 |
106,075 |
Financial assets at fair value through |
||
profit and loss (3) |
102,872 |
84,101 |
Others |
14,206 |
13,095 |
184,855 |
249,794 |
|
(1) tenancy deposits mainly include 1-3 months net rent from the tenants which are paid at the
beginning of the lease. The deposits are considered as a security payment by the tenant and
the Group can use those funds mainly if the tenant has unpaid debts or causes damages to the
property. Past experience shows that the majority of the leases are long term and therefore the
deposits are presented as long term assets.
(2) include non-current investments and vendor loans. The change in the balance is mainly related to
the reclassification of vendor loan to other short-term assets - see note 16.
(3) investment in various equity and debt instruments as well as investment as minority stakes
Furniture, |
Goodwill, |
Total |
||
Owner-occupied |
fixtures and |
soſtwares and |
||
property (*) |
office |
other intangible |
||
equipment |
assets |
|||
€’000 |
||||
COST |
||||
Balance as at 1 January 2023 |
56,010 |
32,380 |
25,730 |
114,120 |
Additions, net |
- |
2,474 |
73 |
2,547 |
Revaluation adjustment |
(6,043) |
- |
- |
(6,043) |
Transfer to held-for-sale |
- |
(284) |
- |
(284) |
Deconsolidation |
- |
(177) |
- |
(177) |
Balance as at 31 December 2023 |
49,968 |
34,392 |
25,803 |
110,163 |
Additions, net |
- |
4,894 |
799 |
5,693 |
Revaluation adjustment |
868 |
- |
- |
868 |
Deconsolidation |
- |
(133) |
- |
(133) |
Balance as at 31 December 2024 |
50,836 |
39,153 |
26,602 |
116,591 |
DEPRECIATION/AMORTISATION |
||||
Balance as at 1 January 2023 |
1,290 |
20,894 |
14,728 |
36,912 |
Depreciation/Amortisation for the year |
1,101 |
2,937 |
5,285 |
9,323 |
Balance as at 31 December 2023 |
2,391 |
23,831 |
20,013 |
46,235 |
Depreciation/Amortisation for the year |
957 |
3,550 |
1,804 |
6,311 |
Balance as at 31 December 2024 |
3,348 |
27,381 |
21,817 |
52,546 |
CARRYING AMOUNTS |
||||
Balance as at 31 December 2024 |
47,488 |
11,772 |
4,785 |
64,045 |
Balance as at 31 December 2023 |
47,577 |
10,561 |
5,790 |
63,928 |
(*) owner-occupied property measured at fair value less accumulated depreciation and impairment losses and classified in
accordance with the fair value hierarchy (see note 4). Since one or more of the significant inputs is not based on observable
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
218
15.1. RECONCILIATION OF INVESTMENT PROPERTY
Year ended 31 December |
||
2024 |
2023 |
|
Level 3 (1) |
Level 3 (1) |
|
€’000 |
||
As at 1 January |
8,629,083 |
9,529,608 |
Plus: investment property classified as held-for-sale (2) |
195,641 |
330,853 |
Total investment property |
8,824,724 |
9,860,461 |
Acquisitions of investment property (3) |
45,337 |
10,079 |
Capital expenditure on investment property |
110,650 |
101,049 |
Disposals of investment property (4) |
(271,703) |
(314,599) |
Fair value adjustment |
49,560 |
(881,382) |
Effect of foreign currency exchange differences |
95,099 |
49,116 |
Total investment property |
8,853,667 |
8,824,724 |
Less: investment property classified as held-for-sale (2) |
(224,705) |
(195,641) |
As at 31 December |
8,628,962 |
8,629,083 |
(1) classified in accordance with the fair value hierarchy (see note 4). Since one or more of the significant inputs is
not based on observable market data, the fair value measurement is included in level 3.
(2) see note 24.2
(3) In 2024, the Group obtained control over properties in London of approximately euro 40 million, which previ-
ously were classified as asset-backed loan and presented under trade and other receivables. Upon obtaining
control, these properties were reclassified as investment property.
(4) see note 24.1
As at 31 December 2024 and 2023, the fair values of the properties are based on valuations
performed by accredited independent valuers.
15.2. GEOGRAPHICAL INFORMATION
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
Investment property (*) |
||
Germany |
6,904,804 |
6,935,405 |
United Kingdom |
1,770,263 |
1,738,452 |
Others |
178,600 |
150,867 |
8,853,667 |
8,824,724 |
|
(*) including assets held-for-sale
The fair value of the properties of the Group is determined at least once a year by external,
independent and certified valuators, who are specialist in valuing real estate properties. As
at 31 December 2024, the full portfolio of the Group has been revalued. The prime valuator,
responsible for the major part of the portfolio is Jones Lang LaSalle GmbH (JLL) and is considered
as one of the market leading valuators in the European real estate market. The fair value of
the properties was prepared in accordance with the RICS Valuation - Professional Standards
(current edition) published by the Royal Institution of Chartered Surveyors (RICS) as well as
the standards contained within the TEGoVA European Valuations Standards, and in accordance
with IVSC International Valuation Standard (IVS), the International Accounting Standard (IAS),
International Financial Reporting Standards (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
valuators. Therefore, the valuation is based on internationally recognized standards.
As part of the engagement, the Company and the valuators confirm that there is no actual
or potential conflict of interest that may have influenced the valuators status as external and
independent. The valuation fee is determined on the scope and complexity of the valuation.
As of 31 December 2024, 96% (2023: 97%) of investment property have been valued using
the discounted cash flows method, 3% (2023: 2%) comparable approach and 1% (2023: 1%)
residual value approach.
>
Discounted cash flow (DCF) 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 behaviour that is a
characteristic of the class of real property.
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 anticipated at the end of the projection period, is then discounted.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
219
The key assumptions used to determine the fair value of the investment properties under the DCF method, which account for 96% (2023: 97%) of the investment property, are further
discussed below.
Rent growth p.a. (%) | Long-term vacancy rate (%) | Discount rate (%) | Capitalization rate (%) | |||||
| As at 31 December | ||||||||
Regions | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 |
| Range (weighted average) | ||||||||
Berlin | 1.2 - 2.5 (1.9) | 1.3 - 2.6 (2.0) | 0.8 - 4.0 (2.5) | 0.6 - 7.0 (3.4) | 3.3 - 7.6 (5.0) | 3.3 - 7.7 (5.0) | 2.2 - 6.9 (3.9) | 2.1 - 7.0 (3.9) |
NRW | 1.1 - 2.5 (1.8) | 1.2 - 2.4 (1.9) | 1.0 - 3.0 (2.5) | 0.6 - 3.0 (2.3) | 3.3 - 9.0 (5.4) | 3.4 - 9.0 (5.3) | 2.1 - 7.5 (4.1) | 2.1 - 7.5 (4.0) |
Dresden/Leipzig/Halle | 0.6 - 2.2 (1.6) | 1.2 - 2.4 (1.8) | 1.0 - 3.9 (2.4) | 1.0 - 6.0 (2.4) | 4.6 - 8.3 (5.2) | 4.5 - 8.3 (5.1) | 3.1 - 6.5 (3.9) | 3.0 - 6.5 (3.8) |
Mannheim/KL/Frankfurt/Mainz | 1.2 - 2.0 (1.6) | 1.2 - 2.4 (1.7) | 2.0 - 3.9 (2.8) | 2.0 - 5.1 (3.4) | 4.6 - 7.2 (5.3) | 4.5 - 7.4 (5.3) | 3.2 - 5.7 (4.1) | 3.0 - 6.4 (4.1) |
Nuremberg/Furth/Munich | 1.4 - 2.4 (1.7) | 1.5 - 2.4 (1.8) | 1.0 - 4.4 (3.9) | 1.0 - 5.8 (4.2) | 4.5 - 9.2 (5.3) | 4.4 - 5.5 (5.0) | 3.0 - 7.0 (3.8) | 2.9 - 3.7 (3.4) |
Hamburg/Bremen | 1.2 - 2.4 (1.8) | 1.2 - 2.4 (1.8) | 1.0 - 4.0 (2.3) | 1.0 - 4.0 (3.1) | 4.4 - 8.2 (5.4) | 4.3 - 8.5 (5.4) | 2.6 - 7.0 (4.5) | 2.6 - 7.0 (4.4) |
London | 2.0 - 3.1 (2.9) | 1.3 - 3.0 (2.2) | 2.7 -2.7 (2.7) | 2.7 - 2.7 (2.7) | 6.3 - 8.5 (6.7) | 6.2 - 8.5 (6.7) | 4.5 - 6.8 (5.0) | 4.2 - 6.8 (4.9) |
Others | 0.6 - 2.5 (1.6) | 0.6 - 3.0 (1.8) | 0.2 - 4.5 (3.1) | 0.2 - 7.8 (3.2) | 3.8 - 9.4 (5.7) | 4.6 - 12.0 (6.2) | 3.3 - 8.3 (4.8) | 3.1 - 8.3 (5.1) |
Total | 0.6 - 3.1 (1.8) | 0.6 - 3.0 (1.9) | 0.2 - 4.6 (2.7) | 0.2 - 4.6 (2.8) | 3.3 - 9.4 (5.4) | 3.3 - 12.0 (5.4) | 2.1 - 8.3 (4.2) | 2.1 - 8.3 (4.1) |
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.
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
220
>
Sensitivity analysis
The table below shows the percentage impact on values (under the DCF method) in the event of a
change in the valuation parameters:
Long-term vacancy | ||||
Rent growth p.a. | rate -1% / +1% | Discount Rate | Capitalization rate | |
+50bps / -50bps | Void period | -25bps / +25bps | -25bps / +25bps | |
-3M / +3M | ||||
Regions | As at 31 December 2024 | |||
Berlin | 3.5 / - 4.8 | 1.1 / - 1.0 | 2.2 / - 2.2 | 5.4 / - 4.7 |
NRW | 11.6 / - 11.1 | 2.6 / - 4.2 | 2.0 / - 2.0 | 5.0 / - 4.4 |
Dresden/Leipzig/Halle | 11.4 / - 13.7 | 2.0 / - 2.8 | 2.1 / - 2.1 | 5.1 / - 4.5 |
Mannheim/KL/ | ||||
Frankfurt/Mainz | 8.9 / - 12.4 | 1.7 / - 1.7 | 2.2 / - 2.1 | 5.1 / - 4.6 |
Nuremberg/ | ||||
Furth/Munich | 4.6 / - 8.0 | 0.8 / - 0.9 | 2.2 / - 2.2 | 5.5 / - 4.8 |
Hamburg/Bremen | 9.3 / - 9.9 | 2.5 / - 3.5 | 2.0 / - 2.0 | 4.5 / - 3.9 |
London | 4.0 / - 3.9 | 1.3 / - 1.3 | 1.9 / - 1.9 | 3.5 / - 3.2 |
Others | 9.1 / - 10 | 2.0 / - 3.1 | 2.1 / - 2.1 | 3.8 / - 3.5 |
Total | 8.0 / - 9.1 | 1.8 / - 2.5 | 2.1 / - 2.1 | 4.9 / - 4.3 |
>
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 (sqm).
In general, enquiries have been made of the valuers and public databases, local sales 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 residents 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 taken into account and adjusted by premium according to
the specifics of the property and its units. The achieved market sales price per sqm will be multiplied
by the area of the property to achieve the property specific market value.
The key assumptions used to determine the fair value of the investment properties under the comparable
approach, which account for 3% (2023: 2%) of the investment property, are further discussed below:
| Valuation | Significant unobservable inputs | As at 31 December | |
technique | |||
2024 | 2023 | ||
Market | |||
comparable | Price per sqm (in euro) | 5,500 - 13,900 (9,200) | 6,800 - 12,800 (10,800) |
approach | |||
>
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 suboptimally utilised. The residual value is determined by first calculating the net
capital value of the property aſter 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. In order 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 of 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). In order 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.
The key assumptions used to determine the fair value of the investment properties under the residual
value approach, which account for 1% (2023: 1%) of the investment property, are further discussed below:
Valuation | Significant unobservable inputs | As at 31 December | |
technique | |||
2024 | 2023 | ||
Sale price per sqm (in euro) | 3,400 – 7,900 (5,400) | 3,400 – 7,500 (4,600) | |
Residual | Rent price per sqm (in euro) | 18.8 – 21.0 (19.2) | 16.6 – 28.0 (22.3) |
value | Development cost per sqm (in euro) | 1,300 - 5,200 (3,000) | 1,300 - 3,500 (2,800) |
approach | Developer margin (%) | 5.0 – 12.7 (10.4) | 7.5 – 10.0 (9.7) |
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
221
Highest and best use
As at 31 December 2024, the current use of all investment property is considered the highest
and best use, except for 2% (2023: 1%) of the investment properties, for which the Group
determined that fair value based on the development and the 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 increasing the rental income and improving these properties, the value of these
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
Operating cost receivables (1) |
193,832 |
215,594 |
Rent and other receivables |
79,211 |
91,685 |
Prepaid expenses |
8,992 |
8,631 |
Other short-term assets (2) |
167,339 |
75,166 |
449,374 |
391,076 |
|
(1)
operating costs receivables represent a right to consideration in exchange for ancillary services that the Group has
transferred to tenants and other charges billed to tenants. Once a year, the operating cost receivables are settled
against advances received from tenants (see note 20).
(2) include prepayments, Group’s vendor loans, as well as loans connected with future real estate transactions, short
term investment and deposits. The increase in the balance is mainly related to vendor loans provided as part of
disposal of investment property during the years 2023-2024. See note 24.1 and 32.
EQUITY
| As at 31 December |
||||
2024 |
2023 |
|||
Number of |
€’000 |
Number of |
€’000 |
|
shares |
shares |
|||
Authorised |
||||
| Ordinary shares of |
||||
euro 0.10 each |
400,000,000 |
40,000 |
400,000,000 |
40,000 |
Issued and fully paid |
||||
Balance as at 1 January |
176,187,899 |
17,619 |
176,187,899 |
17,619 |
Balance as at 31 December |
176,187,899 |
17,619 |
176,187,899 |
17,619 |
17.2. AUTHORISED CAPITAL
As at 31 December 2024, the Group holds 90,340 (2023: 3,831,666) shares in treasury
which represent 0.1% (2023: 2.2%) out of the total ordinary shares. These shares do not
have voting rights.
Year ended 31 December |
||
2024 |
2023 |
|
Thousand of shares |
||
As at 1 January |
3,832 |
3,862 |
Disposal of shares (*) |
(3,700) |
- |
Share based payment |
(42) |
(30) |
As at 31 December |
90 |
3,832 |
(*) in December 2024, the Company sold most of its shares held in treasury to several investors for total amount
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
222
17.4. SHARE PREMIUM
The share premium derives directly from the capital increases which were affected since
the date of incorporation and from conversions of bonds into shares.
The other reserves include shareholder loans that have been converted to equity and therefore
can be distributed at any time, and proceeds from financial instruments and share-based
payments reserves which temporarily cannot be distributed.
17.6. RESOLUTION OF DIVIDEND DISTRIBUTION
As part of the shareholders’ annual meetings it was resolved upon the distribution of cash
dividend for the following years:
| Amount per |
||||
| For |
share |
Gross amount |
Ex-date |
Payment date |
| the year |
(in cents) |
(€’000) |
||
2014 |
20.00 |
24,344 |
25 June 2015 |
3 July 2015 |
2015 |
25.00 |
38,447 |
30 June 2016 |
1 July 2016 |
2016 |
68.25 |
112,468 |
29 June 2017 |
1 July 2017 |
2017 |
73.00 |
120,296 |
30 June 2018 |
17 July 2018 |
2018 |
77.35 |
129,002 |
27 June 2019 |
22 July 2019 |
2019 |
82.38 |
138,407 |
25 June 2020 |
14 July 2020 |
2020 |
82.32 |
136,433 |
1 July 2021 |
20 July 2021 |
2021 |
83.40 |
137,580 |
30 June 2022 |
19 July 2022 |
The Company has decided not to recommend a dividend payment for 2023 and 2022, follow-
ing the increase in macro-economic uncertainty and volatility and preserve further liquidity.
17.7. PERPETUAL NOTES
Nominal |
||||||
Composition |
amount |
Placement |
Next call |
Next reset |
Coupon as |
|
(€’000) |
outstanding |
date |
Coupon |
date |
date |
of next |
(€’000) |
reset date |
|||||
3.887% over |
||||||
Perpetual |
48,400 |
Sep-16 |
6.332% |
Jan-25 |
Jan-28 |
five-year mid |
notes 200,000 |
swap rate |
|||||
2.682% over |
||||||
Perpetual |
25,100 |
Apr-18 |
5.901% |
Oct-25 |
Oct-28 |
five-year mid |
notes 350,000 |
swap rate |
|||||
2.184% over |
||||||
Perpetual |
700,000 |
Dec-20 |
1.5% |
Mar-26 |
Jun-26 |
five-year mid |
notes 700,000 |
swap rate |
|||||
3.508% over |
||||||
Perpetual |
431,713 |
Apr-24 |
6.125% |
Jan-30 |
Apr-30 |
five-year mid |
notes 431,713 |
Sep-24 |
swap rate |
Movement during 2023-2024
17.7.1.
In September 2023, the Company announced its decision not to call the euro 350
million of perpetual notes which had its first call date in October 2023.
17.7.2.
On 2 April 2024, the Board of Directors approved a voluntary exchange and
tender offer targeting the holders of two outstanding perpetual notes, with
nominal values of euro 200 million and euro 350 million, carrying coupons of
6.332% and 5.901%, respectively (the “Existing Perpetual Notes”).
The offer provided the holders of the Existing Perpetual Notes with two options:
1.
Exchange option: exchange their holdings for newly issued perpetual notes at
a specified exchange ratio.
2.
Exchange and partial redemption option: exchange their holdings for new
perpetual notes at the specified exchange ratio and redeem 15% of their
exchanged notes at a small premium over the market prices prevailing prior
to the offer.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
223
On 10 September 2024, a second offer was approved for the same notes, allowing
holders to:
1.
Exchange option: exchange their holdings for new perpetual notes.
2.
Exchange and partial redemption: exchange 80% of holdings and tender 20% for
purchase at a small premium over the market prices prevailing prior to the offer.
The first offer period commenced on 2 April 2024 and closed on 9 April 2024.
The second offer period commenced on 10 September 2024 and closed on 18
September 2024.
On 10 April 2024, the Company announced an acceptance of euro 449 million
in aggregate nominal amount of Existing Perpetual Notes, reflecting an 82%
acceptance rate. Subsequently, on 19 September 2024, the Company announced
an additional acceptance of euro 25.3 million, leading to a combined acceptance
rate of 85% for both offers.
On 16 April 2024, Grand City Properties Finance S.à r.l, a wholly-owned subsidiary
of the Company (the "Perpetual Notes Issuer") issued euro 410 million in new
perpetual notes and the Company repurchased euro 34 million of the existing
perpetual notes through the tender offer. On 26 September 2024, an additional
euro 22 million in new perpetual notes were issued, and euro 1.6 million of
Existing Perpetual Notes were repurchased via the tender offer.
The newly issued perpetual notes have a coupon of 6.125% and are undated,
with an unlimited duration and can only be called by the Perpetual Notes Issuer
on contractually agreed dates or specific occasions. They are subordinated and
feature a first reset date on 16 April 2030. The coupon rate remains at 6.125%
until this date. If the Perpetual Notes Issuer chooses not to exercise its call
option at that time, the coupon will reset as follows:
y
From April 2030 to April 2035: 3.508% over five-year swap rate.
y
From April 2035 to April 2050: 3.758% over five-year swap rate.
y
From April 2050 onwards: 4.508% over five-year swap rate.
The newly issued perpetual notes were admitted to trading on the Euro MTF
Market operated by the Luxembourg Stock Exchange.
These perpetual notes are presented in the consolidated statement of financial
position as equity reserve attributable to its holders, which is part of the total
equity of the Group. The coupon is deferrable until payment resolution of a
dividend to the shareholders. The deferred amounts shall not bear interest.
The majority of the non-controlling interests is held indirectly by Aroundtown S.A. through
18.1. DESCRIPTION OF SHARE-BASED PAYMENT ARRANGEMENTS
As of 31 December 2024, the Group had the following share-based payment arrangements:
>
Incentive Share plan
On 25 June 2014, the Annual General Meeting has approved to authorize the Board of
Directors to issue up to one million shares for an incentive program for the directors,
key management personnel and senior employees. The incentive plan has up to four
years vesting period with target to enhance employees’s long-term commitment to the
Company’s strategic targets.
>
The key terms and conditions related to the programs are as follows:
| Vesting period |
Number |
Weighted |
Contractual life |
of shares |
vesting period |
of the shares |
|
1 July 2021 – 30 June 2028 |
483 thousands |
2.08 years |
Up to 4 years |
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
224
18.2. RECONCILIATION OF OUTSTANDING SHARE OPTIONS
The number and weighted average of shares under the share incentive program and
replacement awards were as follows:
2024 |
2023 |
|
Number of shares |
Number of shares |
|
’000 |
||
Outstanding as at January 1 |
558 |
434 |
Granted during the year |
156 |
245 |
Exercised during the year (*) |
(231) |
(121) |
Outstanding as at 31 December |
483 |
558 |
(*)
of which 41 thousand (2023: 30 thousand) shares have been transferred from the Company’s shares held
in treasury.
During the year, the total amount recognised as share-based payment was euro 2,331
thousand (2023: euro 1,862 thousand). It was presented as Property operating expenses
and as Administrative and other expenses in the consolidated statement of profit or loss
19.1. LOANS AND BORROWINGS
Weighted |
Maturity |
As at 31 December |
||
average interest rate (*) |
||||
2024 |
2023 |
|||
€’000 |
||||
Non-current |
||||
Bank loans |
2.6% |
2027-2082 |
917,223 |
862,619 |
Total non-current |
917,223 |
862,619 |
||
Current |
||||
Current portion of |
2.6% |
2025 |
12,216 |
9,808 |
long-term loans |
||||
Total current |
12,216 |
9,808 |
||
(*)
as at 31 December 2024, including hedging impact, where applicable
The bank loans are in general non-recourse loans with the related assets serving, among
others, as a security. Approx. euro 2.4 billion (2023: euro 2.2 billion) of investment properties
are encumbered.
The financial covenants under the existing loan agreements include, among others, Debt-
Service Coverage Ratio (DSCR) of 105-120% and LTV of 50-70%. As at 31 December 2024,
the Group is compliant with its financial covenants to the financing banks.
During the year the Group drew euro 100 million in new secured debt and early repaid euro
30 million in bank loans. The Group holds undrawn credit lines from several banks in the
amount of euro 300 million, the financial covenants of which being aligned with the Group’s
bond covenants and not subject to a material adverse effect clause.
During the year the Group signed but did not draw a euro 58.4 million bank loans.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
225
19.2. STRAIGHT BONDS
Composition | Note | Nominal amount | Effective coupon (1) | Placement | Maturity | As at 31 December | |
outstanding | 2024 | 2023 | |||||
’000 | €’000 | ||||||
STRAIGHT BONDS | |||||||
Non-current | |||||||
Straight bond series G | (a) (e) (f) | EUR 407,300 | 1.38% | Aug-17 | Aug-26 | 404,288 | 570,487 |
Straight bond series H | EUR 255,000 | 2.00% | Oct-17 | Oct-32 | 246,491 | 245,400 | |
Straight bond series I | HKD 900,000 | 4.1475% | Feb-18 | Feb-28 | 102,752 | 95,489 | |
Straight bond series J | (e) (f) | EUR 583,300 | 1.50% | Feb-18 | Feb-27 | 579,974 | 663,829 |
Straight bond series K | CHF 125,000 | 0.96% | Mar-18 | Sep-26 | 132,641 | 134,714 | |
Straight bond series L | JPY 7,500,000 | 1.20% | Jun-18 | Jun-38 | 43,087 | 45,541 | |
Straight bond series M | EUR 47,000 | 2.18% | Jul-18 | Jul-33 | 48,677 | 48,864 | |
Straight bond series N | EUR 88,000 | 1.71% + 3M Euribor | Feb-19 | Feb-39 | 62,606 | 60,111 | |
Straight bond series O | EUR 15,000 | 1.68% + 3M Euribor | Feb-19 | Feb-34 | 12,010 | 11,647 | |
Straight bond series P | HKD 290,000 | 4.30% | Mar-19 | Mar-29 | 31,486 | 29,452 | |
Straight bond series R | EUR 40,000 | 2.50% | Jun-19 | Jun-39 | 39,833 | 39,821 | |
Straight bond series V | EUR 70,000 | 2.293% | Aug-19 | Aug-34 | 66,778 | 67,816 | |
Straight bond series X | EUR 1,000,000 | 0.125% | Jan-21 | Jan-28 | 989,742 | 986,347 | |
Straight bond series Y | (d) | EUR 500,000 | 4.375% | Jul-24 | Jan-30 | 487,250 | - |
Straight bond series E | - | 191,520 | |||||
Straight bond series U | - | 79,937 | |||||
3,247,615 | 3,270,975 | ||||||
Current | |||||||
Straight bond series E (2) | (a) (e) (f) | EUR 178,900 | 1.50% | Apr-15 | Apr-25 | 178,268 | - |
Straight bond series U (2) | EUR 80,000 | 0.75% | Jul-19 | Jul-25 | 79,977 | - | |
Straight bond series Q | (c) | 0.57% | Jun-19 | Jun-24 | - | 140,329 | |
Straight bond series W | (a) (b) | 1.70% | Apr-20 | Apr-24 | - | 148,593 | |
Accrued interest straight bonds (3) | 32,577 | 26,303 | |||||
290,822 | 315,225 | ||||||
Total straight bonds and | 3,538,437 | 3,586,200 | |||||
accrued interest | |||||||
(1) including hedging impact, where applicable
(2) presented in bond redemption in the consolidated statement of financial position
(3) presented in provisions for other liabilities and other charges in the consolidated statement of financial position
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
226
As of 31 December 2024, the weighted average interest rate on the outstanding loans,
borrowings and bonds, aſter taking into account hedging impact, is 1.9% (2023: 1.9%).
As of 31 December 2024, the Company has maintained a euro 10 billion EMTN programme.
Notes issued under the EMTN programme are the direct obligation of the Company.
Movement during 2023-2024
(a)
During 2023, the Group bought back euro 11.2 million, euro 55.9 million and euro 22.6
million principal amount of straight bond series E, W and G respectively for a cumulative
amount of euro 89.7 million.
(b)
On 9 April 2024, the Company redeemed euro 148.8 million principal amount of straight
bond series W.
(c)
On 24 June 2024, the Company redeemed CHF 130 million principal amount of straight
bond series Q.
(d)
On 9 July 2024 under EMTN program, the Company issued euro 500 million of straight
bond series Y due 2030, at an issue price of 97.774% of the principal amount with euro
coupon 4.375%.
(e)
On 1 July 2024, the Board of Directors decided to invite holders of three outstanding
straight bonds euro 667.6 million, euro 600 million, and euro 550 million, series J, G,
and E respectively to tender the notes for purchase by the Company for cash. The offer
was open until 8 July 2024. As a result of the tender offer, on 10 July 2024, the Company
repurchased euro 74.3 million, euro 149.5 million, and euro 14.5 million principal amount
of straight bond series J, G, and E respectively, excluding any accrued interest.
(f)
During the reporting period and in addition to the offer to the holder, the Company
bought back euro 1 million, euro 20.6 million and euro 10 million principal amount of
straight bond series E, G and J respectively for a cumulative amount of euro 31.6 million.
COVENANTS
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, before or at the
same time in the case of the creation of a Security Interest and, in any other case 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 ratably 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 Company’s Series E bonds contain a substantially similar negative pledge.
Under its outstanding bond series, the Company has covenanted, among other things, the
following (capitalised terms have the meanings set forth in the relevant bond series):
1.
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
Refinancing Indebtedness) if, immediately aſter giving effect to the incurrence of such
additional Indebtedness and the application of the net proceeds of such incurrence:
a.
The sum of: (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% of the sum
of (without duplication): (i) the Total Assets (less Cash and Cash Equivalents) as at
the Last Reporting Date; (ii) ((in case of bonds other than the series E bonds) 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)/ ((in case of the Series E bonds) 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
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
227
b.
The sum of: (i) the Consolidated Secured Indebtedness (excluding the Series E
Bonds and less Cash and Cash Equivalents) as at the Last Reporting Date; and (ii)
the Net Secured Indebtedness (excluding the Series E Bonds and less Cash and Cash
Equivalents) incurred since the Last Reporting Date shall not exceed 45% of the sum
of (without duplication): (i) the Total Assets (less Cash and Cash Equivalents) as at
the Last Reporting Date; (ii) ((in case of bonds other than the Series E bonds) 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/ ((in case of Series E bonds) 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);
2. 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% 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;
3. Up to and including the Final Discharge Date, the Company undertakes that, on each
Reporting Date, the Consolidated Coverage Ratio will be at least 1.8 (excluding the Series
E bonds, for which the Consolidated Coverage Ratio will be at least 2.0);
“Financial Statements” means the annual audited consolidated financial statements
(including the management report) of the Company or the consolidated interim financial
statements (including the management report) of the Company, in each case as published
by the Issuer Company as at the Last Reporting Date and prepared in accordance with IFRS.
As at 31 December 2024 under its outstanding bond series the Group is compliant with its
financial covenants.
Halle
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
228
The table below details changes in the Group’s liabilities from financing activities aſter hedging impact, 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.
Finance cash flows |
Non-cash changes |
|||||||
Finance |
Other cash |
Change in liabilities |
Foreign |
Other |
Other |
|||
€’000 |
31 Dec 2023 |
expenses paid (6) |
flows (1) |
held-for-sale |
exchange effect |
non-cash (2) |
changes (3) |
31 Dec 2024 |
Straight bonds (4) |
3,586,200 |
(45,376) |
(20,244) |
- |
- |
10,578 |
7,279 |
3,538,437 |
Loans and borro- |
||||||||
| wings (5) |
872,427 |
(37,160) |
57,770 |
- |
- |
4,882 |
31,520 |
929,439 |
Lease liabilities |
105,115 |
(5,637) |
- |
3,868 |
2,841 |
6,132 |
5,471 |
117,790 |
4,563,742 |
(88,173) |
37,526 |
3,868 |
2,841 |
21,592 |
44,270 |
4,585,666 |
|
Finance cash flows |
Non-cash changes |
||||||
Finance |
Other cash |
Foreign |
Other |
Other |
|||
€’000 |
31 Dec 2022 |
expenses paid (6) |
flows (1) |
exchange effect |
non-cash (2) |
changes (3) |
31 Dec 2023 |
Straight bonds (4) |
3,638,862 |
(46,295) |
(83,334) |
5,833 |
14,967 |
56,167 |
3,586,200 |
Loans and borrowings (5) |
323,280 |
(15,813) |
531,067 |
- |
- |
33,893 |
872,427 |
Lease liabilities |
57,422 |
(4,066) |
48,377 |
(380) |
(269) |
4,031 |
105,115 |
4,019,564 |
(66,174) |
496,110 |
5,453 |
14,698 |
94,091 |
4,563,742 |
|
(1)
other cash flows include proceeds, repayment (including amortisation) from financial institutions and others, net of related derivatives
(2)
other non-cash changes include discount and issuance cost amortisation as well as fair value adjustment of bonds and remeasurement of lease liabilities
(3)
other changes include interest accruals, results on early repayment of debt and results on linked derivatives
(4) including accrued interest and bond redemption. see note 19.2
(5) including current portion of long-term loans. see note 19.1
(6)
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
229
As at 31 December | ||
2024 | 2023 | |
€’000 | ||
Trade and other payables | 75,034 | 60,197 |
Prepayments received from tenants (*) | 174,426 | 173,539 |
Deferred income | 14,042 | 11,542 |
Other liabilities | 15,728 | 8,688 |
279,230 | 253,966 | |
(*) the Group receives prepayments from tenants for ancillary services and other charges on a monthly basis. Once
As at 31 December | ||
2024 | 2023 | |
€’000 | ||
Tenancy deposits | 48,352 | 47,884 |
Lease liability (see note 21.1) | 117,790 | 105,115 |
Long-term positions with | ||
| non-controlling interest and others | 26,757 | 46,748 |
192,899 | 199,747 | |
21.1.
LEASE LIABILITIES
Set out below are the carrying amounts of lease liabilities of the Group as a lessee and the
movements during the year:
2024 | 2023 | |
€’000 | ||
As at 1 January | 105,115 | 57,422 |
Additions, net | - | 48,377 |
Reclassification from held-for-sale | 3,868 | - |
Expenses | 14,610 | 3,417 |
Payments | (5,803) | (4,101) |
As at 31 December | 117,790 | 105,115 |
As at 31 December 2024, all lease liabilities are related to right-of-use assets accounted
€’000 | |
Balance as at 1 January 2023 | 32,102 |
Movement during the year | 7,937 |
Balance as at 31 December 2023 | 40,039 |
Movement during the year | 6,321 |
Balance as at 31 December 2024 | 46,360 |
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
230
For the year ended 31 December 2024 |
||||||
Chairman of |
Non- |
Independent |
Independent |
Independent |
||
the Board of |
Executive |
Director |
Director |
Director |
||
Directors |
Director |
Total |
||||
Mr. Christian |
Ms. Simone |
Mr. Markus |
Ms. Monica |
Mr. Scot |
||
Windfuhr |
Runge- |
Leininger |
Porfilio (2) |
Wardlaw (2) |
||
€’000 |
Brandner (1) |
|||||
Fix remuneration |
274,384 (3) |
50,000 |
50,000 |
30,815 |
30,815 |
436,014 |
Multi years fixed |
||||||
share incentives plan |
100,000 |
- |
- |
- |
- |
100,000 |
Total remuneration |
374,384 |
50,000 |
50,000 |
30,815 |
30,815 |
536,014 |
(1) Changed her role in the board of directors starting on 26 June 2024 from independent director to non executive director
(2) nominated as independent director of the Company starting on 26 June 2024
(3) including monthly salary, bonus and supplementary payments based on employer cost
Mr. Refael Zamir, the Company’s CEO as at 31 December 2024, was entitled to a total remuneration of euro 1,646
thousand, of which euro 730 thousand refer to monthly salary, annual bonus and supplementary payments based
on employer cost, and 916 thousand refer to multi-year fix and variable share incentive plan.
Mr. Idan Hadad, the Company’s CFO as at 31 December 2024, was entitled to a total remuneration of euro 417
thousand, of which euro 325 thousand refer to monthly salary, annual bonus and supplementary payments based
on employer cost, and 92 thousand refer to multi-year fix and variable share incentive plan.
There were no other material transactions between the Group and its directors and executive management during
23.2. OTHER RELATED PARTY TRANSACTIONS AND BALANCES
Some of the Group’s transactions and arrangements are with related parties
and the effect of these on the consolidated financial statements is stated below:
23.2.1
For the year ended 31 December 2024 |
||
2024 |
2023 |
|
€’000 |
||
Provided services |
6,857 |
3,191 |
Purchased services (*) |
(2,812) |
(1,194) |
Receivables |
2,885 |
- |
Payables |
9,589 |
1,311 |
(*) The purchased services in the above table for 2024 do not include an amount of approximately
euro 200 thousand (approximately euro 750 thousand for 2023) for facility services (caretaker,
etc.) between the Group and a facility services company (“FSC”). Until March 2024 the regis-
tered shareholder of FSC was a related party of the Group who in the opinion of the Group did
not exercise any control over FSC.
a.
During 2023, the Group acquired investment property from Aroundtown
SA’s subsidiary for a total consideration of euro 3.2 million, reflecting
the fair value of the property as at the transaction date. During 2024
the Group did not acquire investment property from related party.
b.
During 2024, the Group sold investment property to Aroundtown SA’s
subsidiary for a total consideration of euro 1 million (2023: euro 3.7 million),
reflecting the fair value of the property as at the transaction date.
c.
The Group has subscribed to the Turnaround Capital Investment Fund
(Luxembourg) SCSp RAIF, a fund established in 2024 to capitalize on
market opportunities by acquiring quality real estate properties in strong
locations and at attractive price levels and with high upside potential. The
fund was set up together with Aroundtown SA, with a total commitment
for GCP of up to euro 28 million. As of December 2024, the Group has
funded euro 19 million of this commitment.
d.
During 2024, the Group sold minority stakes to Aroundtown SA’s
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
231
24.1. DISPOSALS OF INVESTMENT PROPERTY DURING THE YEAR
During the year, the Group disposed several investment properties and subsidiaries which
held investment properties, The following table describes the amounts of assets and
liabilities disposed:
Year ended 31 December |
||
2024 |
2023 |
|
€’000 |
||
Investment property |
271,703 |
314,599 |
Net deferred tax liabilities |
(3,112) |
(1,014) |
Other net assets (liabilities) |
2,140 |
(1,104) |
Total net assets disposed |
270,731 |
312,481 |
Non-controlling interests disposed |
3,136 |
1,884 |
Total consideration (*) |
262,063 |
301,962 |
Loss from disposal of investment |
||
property and subsidiaries |
(5,532) |
(8,635) |
(*)
including vendor loans of approximately euro 60 million and euro 85 million, provided in 2024 and 2023,
respectively. These vendor loans were issued to facilitate and optimize transactions, allowing buyers to leverage
short-term flexibility in obtaining financing. The loans are secured against the sold properties, typically with
an average loan-to-value (LTV) ratio of approximately 60% at the time of disposal. In the event of a borrower's
default, the Group may reclaim the assets at a discount and impose penalties on the defaulting party through a
receivership process. During the reporting period, euro 24 million of the vendor loans provided in 2023 has been
repaid. See note 32a
24.2. ASSETS AND DISPOSAL GROUP 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 of the properties,
or mature properties with lower-than-average upside potential in their current condition.
The intention of the Group to dispose non-core and mature properties is part of its capital
recycling plan of is following a strategic decision to increase the quality of its portfolio.
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 through asset deals are presented as assets held-for-
sale and as liabilities held-for-sale in the consolidated statement of financial position.
Efforts to sell the properties have started and a sale is expected within twelve months.
As of 31 December 2024, the Group has signed contracts to sell approximately euro 125
million of investment property. See note 32b.
The major classes of assets and liabilities comprising the Disposal Group classified as
held-for-sale are as follows:
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
ASSETS CLASSIFIED AS HELD-FOR-SALE |
||
Investment property (see note 15.1) |
224,705 |
195,641 |
Cash and cash equivalents |
376 |
- |
Deferred tax assets |
949 |
- |
Other assets |
6,664 |
- |
Total assets classified as held-for-sale |
232,694 |
195,641 |
LIABILITIES CLASSIFIED AS HELD-FOR-SALE |
||
Deferred tax liabilities |
14,758 |
9,862 |
Other liabilities |
5,022 |
3,867 |
Total liabilities classified as held-for-sale |
19,780 |
13,729 |
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
232
Set out below, is an overview of financial assets, held by the Group as at 31 December 2024
and 31 December 2023:
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
FINANCIAL ASSETS AT AMORTISED COST: |
||
Cash and cash equivalent (1) |
1,373,235 |
1,129,176 |
Trade and other receivables (1) |
454,930 |
391,076 |
Other non-current assets (2) |
81,983 |
165,693 |
FINANCIAL ASSETS AT FAIR VALUE |
||
THROUGH PROFIT OR LOSS: |
||
Financial assets at fair value through |
||
profit or loss (3) |
244,311 |
185,408 |
Derivative financial assets (4) |
4,412 |
6,157 |
Total |
2,158,871 |
1,877,510 |
(1)
including assets held-for-sale
(2)
excluding non-current financial assets at fair value through profit or loss
(3)
including non-current financial assets at fair value through profit or loss included in other non-current assets
(see note 13)
(4)
Set out below, is an overview of financial liabilities, held by the Group as at 31 December
2024 and 31 December 2023:
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
FINANCIAL LIABILITIES AT AMORTISED COST: |
||
Trade and other payables (1) |
282,949 |
253,966 |
Tax payable |
18,270 |
17,006 |
Loans and borrowings (2) |
929,439 |
872,427 |
Straight bonds (3) |
3,505,860 |
3,559,897 |
Accrued interest on straight bonds |
32,577 |
26,303 |
Other long-term liabilities (1) |
193,943 |
203,615 |
FINANCIAL ASSETS AT FAIR VALUE |
||
THROUGH PROFIT OR LOSS: |
||
Derivative financial liabilities (4) |
505 |
- |
Total |
4,963,543 |
4,933,214 |
(1) including liabilities held-for-sale
(2) including current portion of long-term loan
(3) including bond redemption
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
233
25.3. RISKS MANAGEMENT OBJECTIVES AND POLICES
As at 31 December 2024, the Group’s principal financial liabilities, other than derivatives,
comprise loans and borrowings, straight bonds, 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 asset. 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 advices 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 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.
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. The Group manages its
interest rate risk by hedging long-term debt with floating rate using swap and cap contracts.
For additional information see note 26.
As at 31 December 2024, aſter taking into account the effect of the hedging, the interest
profile of the Group’s interest-bearing debt was as follows:
Nominal amount outstanding as at 31 December | ||
2024 | 2023 | |
€’000 | ||
Fixed rate | 4,298,552 | 3,537,824 |
Capped rate | 13,370 | 428,812 |
Floating rate | 222,000 | 549,938 |
4,533,922 | 4,516,574 | |
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, aſter the impact of hedging as of the
reporting date. 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:
Increase/decrease | Effect on profit before tax | |
in basis points | and pre-tax equity | |
€’000 | ||
2024 | 100 | (2,325) |
-100 | 2,354 | |
2023 | 100 | (6,624) |
-100 | 9,788 | |
The Group had no long-term debt for which the benchmark rate had been replaced with an
alternative benchmark rate as at 31 December 2024.
FOREIGN CURRENCY RISK
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 issued several straight bonds in different currencies and in fixed and floating
interest. The Company used cross currency swap contracts to hedge the foreign currency
risk
as explained in note 26.1 and 26.2.
In addition, the Company used forwards and option contracts to hedge the foreign currency
risk of its net investment in foreign operation which operates in British pound (GBP) as
explained in note 26.3.
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 regular basis.
As at 31 December 2024, the exposure to listed equity instruments was euro 81,261
thousand
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
234
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) and from its financing activities,
including cash and cash equivalents held in banks, derivatives and other financial instruments.
TRADE AND OTHER RECEIVABLES
Customer credit risk is managed by the property managers subject to the Group’s established
policy, procedures and control 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 maximum exposure to credit risk at the reporting date is the carrying value of each class
of financial assets disclosed in note 25.1.
The aging of rent receivables at the end of the reporting period that were not impaired was
as follows:
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.
As at 31 December |
||
2024 |
2023 |
|
€’000 |
||
Neither past due and past due 1–30 days |
26,618 |
22,382 |
Past due 31–90 days |
11,217 |
15,333 |
Past due above 90 days |
10,183 |
5,453 |
48,018 |
43,168 |
|
FINANCIAL INSTRUMENTS AND CASH AND CASH EQUIVALENTS
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 minimise the concentration of risks and therefore mitigate
financial loss through a counterparty’s potential failure to make payments.
The Group’s investment in financial instruments at fair value through profit or loss consist of
quoted debt and equity securities that are graded in the investment category.
The Group holds its cash and cash equivalents in high rated countries with high-rated
financial institutions. Concentration risk is mitigated by limiting the exposure to a single
counter party.
As at 31 December 2024, the Group has recorded euro 695 thousand (2023: 546 thousand)
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
235
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
committed credit facilities.
The following are the remaining contractual maturities at the end of 2024 end of 2023 of financial liabilities, including estimated interest payments, the impact of derivatives and excluding the
impact of netting agreements:
Contractual cash flows including interest | ||||||||
As at 31 December 2024 | Carrying amount | Total | 2 months or less | 2-12 months | 1-2 years | 2-3 years | More than 3 years | |
| €’000 | ||||||||
FINANCIAL LIABILITIES | ||||||||
Loans and borrowings (1) | 929,439 | 1,110,594 | 286 | 34,064 | 35,510 | 97,607 | 943,127 | |
Straight bonds (2) | 3,505,860 | 3,965,485 | 40,276 | 275,958 | 595,501 | 635,122 | 2,418,628 | |
Lease liabilities | 117,790 | 2,797,519 | - | 5,631 | 5,631 | 5,631 | 2,780,626 | |
Trade and other payables | 279,230 | 279,230 | 46,538 | 232,692 | - | - | - | |
Derivative financial liabilities (3) | 68,161 | 82,856 | 1,710 | 72,949 | 8,197 | - | - | |
Total | 4,900,480 | 8,235,684 | 88,810 | 621,294 | 644,839 | 738,360 | 6,142,381 | |
Contractual cash flows including interest | |||||||
As at 31 December 2023 | Carrying amount | Total | 2 months or less | 2-12 months | 1-2 years | 2-3 years | More than 3 years |
€’000 | |||||||
FINANCIAL LIABILITIES | |||||||
Loans and borrowings (1) | 872,427 | 1,138,825 | 45 | 42,420 | 43,072 | 43,597 | 1,009,691 |
Straight bonds (2) | 3,559,897 | 3,848,878 | 18,774 | 289,570 | 312,442 | 739,406 | 2,488,686 |
Lease liabilities | 105,115 | 2,635,222 | - | 5,074 | 5,074 | 5,074 | 2,620,000 |
Trade and other payables | 253,966 | 253,966 | 42,328 | 211,638 | - | - | - |
Derivative financial liabilities (3) | 26,092 | 35,599 | 2,829 | 26,818 | 5,952 | - | - |
Total | 4,817,497 | 7,912,490 | 63,976 | 575,520 | 366,540 | 788,077 | 6,118,377 |
(1)
(2)
(3)
including current portion of long-term loans
including bond redemption
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
236
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
Through ordinary course of business, the Company is exposed to various external risks.
The Risk Committee is constantly determining whether the 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 volatility of interest rate risk, liquidity risks, credit
risks, regulatory and legal risks, collection and tenant deficiencies, the need for unexpected
capital investments, and market downturn risk.
The Company sets direct and specific guidelines and boundaries to mitigate and address each
risk, hedging and reducing to a minimum the occurrence of failure or potential default.
>
Geopolitical situation involving Russia and Ukraine
On 24 February 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 organisations, 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 Company.
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 the Company,
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,
in particular 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. In order to mitigate the risk, the Company continues to provide
information toits 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 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 shiſted,
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 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
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
237
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 properties recorded on
the Company’s balance sheet in accordance with International Accounting Standard (“IAS”) IAS
40 tends to increase in an environment of rising interest rates, which in turn could result in the
group 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 favourable terms. Financial institutions
such as banks may seek to reduce their exposure to the real estate sector and also 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 amortisation schedules that do not restrict its ability to pay
intended dividends. Further, the group may be unable to enter into hedging instruments 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 equity includes a material amount 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 with its notes
with the first call date in January and in October 2023.
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
favourable 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 of physical risk develop. This analysis
will serve the Company in determining which risks are material in order 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 regulations 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 minimise the financial risk through pro-active
Nuremberg / Fürth
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
238
carbon reduction and energy efficiency policies and programmes. 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
CO
2
pathway to guide the investment in on-site
renewable energy and building energy efficiency improvements needed to achieve its 2030
emission reduction target while enabling further emission reductions down the line. In order
mitigate risks related to
CO
2
emissions, and in order 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-
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
239
The Group is exposed to certain risks relating to its ongoing business operations. The
primary risks managed using derivative instruments is interest rate risk and currency risk.
The Group’s risk management strategy and how it is applied to manage risk are explained
in note 25.3.
As at 31 December | |||
2024 | 2023 | ||
€’000 | |||
CURRENT AND NON-CURRENT DERIVATIVE | |||
FINANCIAL ASSETS | |||
Derivatives that are designated as hedging instruments | |||
in fair value hedge | 26.1 | 18,768 | 56,185 |
Derivatives that are designated as hedging instruments | |||
in cash flow hedge | 26.2 | 15,898 | 8,679 |
Derivatives that are designated as hedging instruments | |||
in net investment hedge | 26.3 | - | 362 |
Derivatives that are not designated in hedge accounting | |||
relationships | 26.4 | 4,412 | 6,157 |
39,078 | 71,383 | ||
CURRENT AND NON-CURRENT DERIVATIVE | |||
FINANCIAL LIABILITIES | |||
Derivatives that are designated as hedging instruments | |||
in fair value hedge | 26.1 | 42,103 | 40,301 |
Derivatives that are designated as hedging instruments | |||
in cash flow hedge | 26.2 | 10,362 | 2,800 |
Derivatives that are designated as hedging instruments | |||
in net investment hedge | 26.3 | 68,161 | 26,092 |
Derivatives that are not designated in hedge accounting | |||
relationships | 26.4 | 505 | - |
121,131 | 69,193 | ||
26.1. DERIVATIVES DESIGNATED AS HEDGING
INSTRUMENTS IN FAIR VALUE HEDGE
As at 31 December 2024, the Group had foreign exchange rate swap agreements in place,
as follows:
Hedging instrument (*) | Group receives | Group pays |
’000 | ||
Swap | HKD 900,000 | Euro 92,631 |
Swap | JPY 7,500,000 | Euro 75,500 |
Swap | HKD 290,000 | Euro 32,768 |
(*) all swaps are linked to bonds’ maturity
In addition, the Group has entered into several interest rate swap agreements. For further
information regarding the effective coupon rate see note 19.2.
The swaps are being used to hedge the exposure to changes in fair value of the Group’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 and interest rate swaps match the terms of the
hedged items as described above. The Group has established a hedge ratio of 1:1 for the
hedging relationships as the underlying risk of the foreign exchange rate and the interest
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 can arise from:
y
Different foreign exchange and interest rates’ curve applied to the hedge items and hedging
instruments
y
Differences in timing of cash flows of the hedged items and hedging instruments
y
The counterparties’ credit risk differently impacting the fair value movements of the hedging
instruments and hedged items
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
240
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 | |||
Risk | consolidated | for measuring | ||
category | Assets | Liabilities | financial | ineffectiveness |
statements | for the year | |||
€’000 | €’000 | €’000 | ||
As at 31 December 2024 | ||||
Foreign exchange | Derivative | |||
and interest rate | 18,768 | 42,103 | financial assets/ | (43,456) |
liabilities | ||||
As at 31 December 2023 | ||||
Foreign exchange | Derivative | |||
and interest rate | 56,185 | 40,301 | financial assets/ | 20,725 |
liabilities | ||||
The impact of the hedged items on the consolidated statement of financial position is, as
follows:
Net change in fair | |||
Line item in the | value used for | ||
Carrying amount | consolidated | measuring | |
financial statements | ineffectiveness | ||
for the year | |||
€’000 | €’000 | ||
As at 31 December 2024 | |||
Straight bonds | 367,396 | Straight bonds | 40,760 |
As at 31 December 2023 | |||
Straight bonds | 633,963 | Straight bonds | (21,206) |
The ineffectiveness recognised in the consolidated statement of profit or loss was euro 2,696
thousand
(2023: 481 thousand).
26.2. DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS IN CASH
FLOW HEDGE
As at 31 December 2024, the Company had interest rate cap and swap agreements in
place, as follows:
Hedging instruments | Hedged item | Carrying amount |
€’000 | ||
Swap | Interest rate on straight bonds | 249,693 |
| Swap and Cap | Interest rate on loans | |
| and borrowings | 574,078 |
The caps and swaps are being used to hedge the exposure to variability in cash outflows of
the Group’s straight bonds and loans which arise from interest rate risks.
There is an economic relationship between the hedged items and the hedging instruments.
The Group chose to designate the intrinsic value of the cap and swap contracts as the hedging
instrument. The terms of the hedging instruments match the terms of the hedged items as
described and the Group has established a hedge ratio of 1:1 for the hedging relationships as the
underlying risk of the interest rate and the caps and 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 can arise from:
y
Different foreign exchange and interest rates’ curve applied to the hedge items and hedging
instruments.
y
Differences in timing of cash flows of the hedged items and hedging instruments.
y
The counterparties’ credit risk differently impacting the fair value movements of the hedging
instruments and hedged items
.
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
241
The impact of the hedging instruments on the consolidated statement of financial position
is, as follows:
Risk
category
Carrying amount | ||||
Net change in | ||||
Line item in the | fair value used | |||
consolidated | for measuring | |||
Assets | Liabilities | financial | ineffectiveness | |
statements | for the year | |||
€’000 | €’000 | €’000 | ||
As at 31 | ||||
December 2024 | Derivative financial | |||
Interest rate | 15,898 | 10,362 | assets / liabilities | (11,724) |
As at 31 | ||||
December 2023 | ||||
Interest rate | 8,679 | 2,800 | Derivative financial | 343 |
assets / liabilities | ||||
The impact of the hedged items on the consolidated statement of financial position is, as
follows:
Net change in fair | |||
Line item in the | value used for | ||
consolidated | measuring | ||
Carrying amount | financial state- | ineffectiveness | |
ments | for the year | ||
€’000 | €’000 | ||
As at 31 December 2024 | |||
Straight bonds | 249,693 | Straight bonds | 7,148 |
Loans and | |||
Loans and borrowings | 574,078 | borrowings | 4,576 |
As at 31 December 2023 | |||
Loans and borrowings | 375,300 | Loans and | (343) |
borrowings |
The hedging gains and losses recognised in OCI before tax are equal to the change in fair value
used for measuring effectiveness. There is no ineffectiveness recognised in profit or loss.
26.3. DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS IN NET
INVESTMENT IN FOREIGN OPERATION
The Group uses derivatives, such as forward contracts and options, to hedge its GBP foreign
exchange risk on its investments in foreign subsidiaries.
The Company designates the spot element of forward contracts or the intrinsic value of
options as the hedging instruments. Changes in the fair value of the spot element of forward
contracts and in the intrinsic value of options are transferred to OCI to offset any gains or
losses on translation of the net investments in the subsidiaries.
The Company transfers changes in fair value of the forward element in forward contracts and
of the time value of options are transferred to OCI and reclassified to the consolidated state-
ment of profit or loss on a straight-line basis as cost of hedge.
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 netional amount hedged.
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 | ||||
Risk | Notional | consolidated | for measuring | ||
amount | Assets | Liabilities | financial | ineffectiveness | |
category | outstanding | statements | for the year | ||
£000 | €’000 | €’000 | €’000 | ||
As at 31 | |||||
December 2024 | |||||
Derivative | |||||
Foreign | financial assets | ||||
exchange rate | 1,275,000 | - | 68,161 | and derivative | (48,431) |
financial | |||||
liabilities | |||||
As at 31 | |||||
December 2023 | |||||
Derivative | |||||
financial assets | |||||
Foreign | 1,315,000 | 362 | 26,092 | and derivative | (32,568) |
exchange rate | financial | ||||
liabilities | |||||
Notes to the Consolidated Financial Statements
I
GRAND CITY PROPERTIES S.A.
242
The impact of the hedged item on the consolidated statement of financial position is, as
follows:
Net change in fair value | ||
| Foreign currency | used for measuring | |
translation | ineffectiveness | |
reserves | for the year | |
€’000 | ||
As at 31 December 2024 | ||
Net investment in | ||
foreign subsidiaries | 75,719 | 48,431 |
As at 31 December 2023 | ||
Net investment in foreign | ||
subsidiaries | 44,301 | 32,568 |
The hedging gains and losses recognised in OCI before tax are equal to the change in fair
value used for measuring effectiveness. There is no ineffectiveness recognised in profit
or loss.
26.4. 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
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 a LTV to remain at a target below 45%.
As at 31 December 2024 and 2023 the LTV ratio was 33% and 37%, respectively, and
the Group did not breach any of its financial 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 Company complied with all externally
The Group has entered into long-term rent agreements as a lessor of some of its investment
property. The future minimum rental income receivable under non-cancellable operating
leases is as follows:
As at 31 December | ||
2024 | 2023 | |
€’000 | ||
First year | 44,788 | 49,348 |
Second year | 38,020 | 41,067 |
Third year | 35,385 | 35,125 |
Fourth year | 28,937 | 32,597 |
Fifth year | 24,068 | 26,084 |
More than five years | 144,661 | 163,416 |
315,859 | 347,637 | |
As at the reporting date, the Group had several financial obligations in total amount of
approximately euro 135 million (2023: euro 160 million), of which approximately euro 50
million were satisfied aſter the reporting period.
Commitments primarily relate to capital expenditure obligations over several years in
The Group does not have significant contingent assets and liabilities as at 31 December
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
243
The details of the significant holdings in the Group as at 31 December 2024 and 2023 are as follows:
As at 31 December | ||||
Place of incorporation | Principal activities | 2024 Holding % | 2023 Holding % | |
Significant subsidiaries held directly by the Company: | ||||
Grandcity Property Ltd. | Cyprus | Holding of investments | 94.8% | 94.8% |
Grand City Properties Holdings S.à r.l | Luxembourg | Holding of investments | 100% | 100% |
Grandcity Holdings Ltd. | Cyprus | Holding of investments | 100% | 100% |
Grand City Properties Holdings B.V. | The Netherlands | Holding of investments | 100% | 100% |
Grand City Properties Finance S.à r.l | Luxembourg | Financing | 100% | - |
As at 31 December | ||||
Place of incorporation | Principal activities | 2024 Holding % | 2023 Holding % | |
Significant subsidiaries held indirectly by the Company: | ||||
Grandcity Towers Ltd. | Cyprus | Holding of investments | 100% | 100% |
Gutburg holding Limited | Cyprus | Holding of investments | 100% | 100% |
Noeran Limited | Cyprus | Holding of investments | 100% | 100% |
Carmiliana Limited | Cyprus | Holding of investments | 100% | 100% |
Garnet 1 Property S.à r.l | Luxemburg | Holding of investments | 100% | 100% |
GCP Real Estate Holdings GmbH | Germany | Holding of investments | 100% | 100% |
Sparol Limited | Cyprus | Holding of investments | 89.1% | 89.1% |
Garnet 2 Property S.à r.l | Luxemburg | Holding of investments | 100% | 100% |
Significant Group entities releated to investing in real estate properties in Germany and London and their parent companies.
The holding percentage in each entity equals to the voting rights the holder has in it.
a. On 31 January 2025, the Group received euro 66 million as a repayment of a vendor loan, which was provided as part of a disposal transaction completed in 2023.
To the Shareholders of
Grand City Properties S.A.
37, Boulevard Joseph II
L-1840 Luxembourg
Luxembourg
REPORT OF THE REVISEUR
D’ENTREPRISES AGREE
Report on the audit of the consolidated financial statements
Opinion
We have audited the consolidated financial statements of Grand City Properties S.A. 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
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
Refer to notes 15 and 24.2 to the consolidated financial statements for related disclosures.
In notes 2.3, 3.11 and 3.12 to the consolidated financial statements you find the corresponding
significant accounting judgements, estimates and assumptions, and the accounting policies,
respectively.
244
a) Why the matter was considered to be one of most significance in our audit of the
consolidated financial statements
As at 31 December 2024 the Group held a portfolio of investment properties with a fair value
of TEUR 8,628,962 (31 December 2023: TEUR 8,629,083) and investment properties within
assets classified as held for sale with a fair value of TEUR 224,705 (31 December 2023: TEUR
195,641).
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
discount and capitalization rates 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 own property valuation specialists, on a sample basis, we
assessed that the valuation approach applied by the external valuer was in accordance
with relevant valuation and accounting standards and suitable for use in determining the
carrying value in the consolidated statement of financial position;
−
Through the involvement of our own property valuation specialists, on a sample basis, we
tested the integrity, accuracy and completeness of inputs used by the external valuers, as
well as appropriateness of valuation parameters used, such as discount and capitalisation
rates, market rents per square meter and capital expenditure, vacancy rates, comparable
price per square meter and development cost;
−
Through the involvement of our own property valuation specialists, on a sample basis, we
assessed the valuation process, significant assumptions and critical judgement areas by
benchmarking these to external industry data and comparable property transactions, in
particular the yields applied; and
−
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 Directors’ report
and the Corporate Governance Statement 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 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.
245
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:
−
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.
−
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.
−
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Board of Directors.
−
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.
−
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.
−
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.
246
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 13 years.
The Board of Directors’ 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 Directors’ 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 Grand City Properties S.A. as at 31
December 2024, identified as 5299002QLUYKK2WBMB18-2024-12-31-0-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 Grand City Properties
S.A. as at 31 December 2024, identified as 5299002QLUYKK2WBMB18-2024-12-31-0-en.
zip, prepared and presented in accordance with the requirements laid down in the ESEF
Regulation, which is the only authoritative version
KPMG Audit S.à r.l.
Cabinet de révision agréé
Alessandro Raone
Partner
Luxembourg, 17 March 2025
247
GRAND CITY PROPERTIES S.A.
I
Notes to the Consolidated Financial Statements
248
Dresden