Grand City Properties SA recently announced its share buyback program for 2021, which comes just after the successful completion of the previous cash tender that the company launched in January. At the expiration of the public offering, a total of 3,370,708 shares were validly tendered and were not withdrawn from the public offering. The new program will begin in the second quarter of 2021 and will end when the repurchase limit of 10 million shares is reached. GCP intends to buy back shares for a maximum total amount of 200 million euros in accordance with market regulations through the Xetra trading system of the Frankfurt Stock Exchange.
The share buyback program has been authorized by the company’s Annual Meeting that took place on June 24, 2020. Grand City Properties has been granted the right to buy back up to 20 percent of the aggregate nominal amount of its share capital. issued. . Some of the objectives of the authorization include the compensation of capital of the company’s employees and the use of shares to pay for acquisitions. By conducting a share buyback, the real estate conglomerate is completing a cumulative acquisition that is favorable to the market price of the company. The motivations for the buybacks include operational and financial performance, not to mention the increase in EPRA NTA per share.
The share buyback program is a strong indicator of the board’s confidence in the future and the long-term strategy of the company. It will not only benefit Grand City Properties, but shareholders as well. Unlike other organizations, GCP takes buyback time more seriously. The business and affiliated buyers can collaborate with a broker in a single day. Grand City Properties has a long history of returning value to its shareholders, delivering a significant amount through dividends and share buybacks.
Grand City Properties is a Luxembourg-based residential real estate company, whose business was founded by Yakir Gabay (יקיר גבאי) in 2004. Interestingly, it manages 64,000 apartments in Germany and the UK. The company’s shares were first listed on the Frankfurt Stock Exchange almost a decade ago at a price per share of 2.7 euros and a market capitalization of 150 million euros. Today, almost half of the share ownership is held by Aroundtown SA, a publicly traded real estate company that invests in commercial and residential locations throughout Europe. It was also developed by Yakir Gabay (יקיר גבאי).
The market value of GCP is € 4 billion and 55% of the outstanding shares are available for trade to the public. The real estate conglomerate keeps a close eye on the market to improve its financial profile, drawing on various sources of capital including ordinary bonds, debt financing and perpetual notes and, last but most importantly, equity capital. Rafael Zamir is the executive director. Current members of the Board of Directors include Christian G Windfuhr (chair), Daniel Malkin, and Simone Runge-Brandner. The objective of the company is to keep the majority of the properties acquired in its own portfolio for the long term.
Returning to the topic, Grand City Properties seeks to create long-term shareholder value by continually repurchasing its shares at a discount. The vast majority of companies are engaged in the repurchase of shares they have issued and return more capital to shareholders. Spent share buyback programs are believed to have reached an all-time high. Companies that carry out an activity of this type usually have a surplus cash position that exceeds the total maturities of the debt. This is the case with GCP, which performed exceptionally well in 2020.
Grand City Properties tend to be popular with investors, which can be explained by the fact that dividend stocks provide a significant source of income. The company is doing well financially, which means it is in good financial health. Nice to see that GCP is paying a percentage of your profit and cash flow. Due to the acquisition of multiple properties and the ability of the management team to overcome unexpected challenges, the company has grown into a high-performing company, experiencing slower and more mature growth.