Grand City Properties - German Socialism - Model Update

Following recent moves in GCP’s capital structure, we have revisited the bonds and hybrids to assess whether they now offer an attractive investment opportunity. We have examined the resilience of asset coverage against further property yield expansion, the potential impact of Berlin’s renewed socialisation proposals and the implications of GCP’s 20.04% stake in LEG for cash flow and financial flexibility. The recent price moves have changed the relative value proposition, but the key question is whether current valuations adequately compensate bondholders for the risks around property values, regulation and funding costs.