On December 5, the indices will be reviewed for their composition. It is quite possible, according to the assumptions, that Aroundtown, for example, will make it into the MDax barometer. This means that some ETFs – which replicate the MDax – will have to include this stock (if it does come to that). Attention span, and perhaps even prices, will react to this. It is therefore worth taking a closer look at the stock for you.

Aroundtown: Commercial real estate – the low point is over The company invests in commercial real estate. The past years have not been easy. Due to the coronavirus pandemic and declining demand for presence offices as well as falling economic output, the industry has run into difficulties. This not only reduced the economic prospects for the industry, but also affected the mood for such stocks as Aroundtown’s.

The most recent quarterly figures were – still – initially disappointing. Rental income and the revenue metric FFO (“Funds from Operations”) have decreased. In the second quarter Aroundtown still received €84.6 million. In the 3rd quarter it was only €80 million.

At first glance this is disappointing and suggests that the crisis can continue. The second glance reveals something completely different: The company has already sold commercial space – and thus also reduced the revenue. Therefore, the rental income has actually increased when adjusted for the spaces available for renting.

The good news for those who have already invested: The “operating profit forecast” has even increased after the first three quarters. Instead of €310 million, the company reported €340 million. In addition, there is a slightly better outlook with regard to the mood in general.

Rates will no longer rise massively – this has a side effect All signs point to the fact that interest rates in the Eurozone will no longer or will hardly rise. Inflation data is declining. This has no direct effect on Aroundtown, but an indirect one. The markets also decide on the basis of expected interest rate structures whether to invest, for example, in real estate. If the situation calms down as it is currently, this will stabilize the mood.

Moods are also decisive for the companies offering commercial real estate – Aroundtown simply finds better conditions. In my opinion, the share price is therefore not randomly up since early summer. The stock markets have anticipated this course.

The only question is how far the recovery will reach. I would not be too optimistic at the moment based on the latest figures. However, in my opinion, you can assume with such companies as Aroundtown that the opportunity to enter will soon be available.

Aroundtown: Real estate on the move – WKN: A2DW8Z – ISIN: LU1673108939 Source: https://fundamental.aktienscreener.com/LU1673108939/EI/aroundtown-sa/data