Aroundtown stock faces refinancing risk after Goldman downgrade

Goldman Sachs downgraded Aroundtown from Neutral to Sell on October 12, 2026, and cut its 12-month price target from 1.80 euros to 1.30 euros. The broker cited the risk that higher refinancing costs will weigh on earnings, leverage and the real estate group's financial outlook.

According to Investing.com, Goldman Sachs expects Aroundtown to refinance 5.6 billion euros of debt maturing between 2026 and 2028 at an assumed cost of 5.5%. The debt currently carries an average cost of 1.4% to 1.8%, while Aroundtown's average cost of debt stood at 2.4% at the end of the first half.

Debt Costs Challenge Earnings

The broker forecasts Aroundtown's average cost of debt to rise to about 4.5% by 2030. It expects net financing costs to grow by about 18% a year from 2025 to 2028, well ahead of the roughly 2.4% annual growth forecast for recurring core earnings before interest, taxes, depreciation and amortization.

That gap would put pressure on earnings per share. Goldman Sachs forecasts a decline of about 3% a year and sees earnings per share at 0.23 euros in 2028, below its 0.26-euro estimate for 2025. The broker also expects interest cover to fall to 2.2 times by 2030 from 3.3 times, leaving it closer to the covenant level of below 1.8 times.

Portfolio Adds Further Pressure

Goldman Sachs reduced its estimates for Aroundtown's net tangible assets by more than 40%. Its assumptions include a 100-basis-point increase in property yields by 2028, compared with a previous assumption of 20 basis points. The resulting loan-to-value ratio could reach 48% on a reported basis, above the board's 45% guidance, or about 63% including hybrids.

Offices account for 34% of portfolio value, according to the broker. Office vacancy rose by 60 basis points to 13.6% in the first half, while like-for-like office rental growth reached 0.9%. Aroundtown also faces the expiry of about 27% of its commercial leases in 2027 and 2028.

Goldman Sachs sees a 3.8% return on capital for 2027 against an estimated 6.2% cost of capital. Lower interest rates or additional disposals could ease leverage concerns, although disposals would also reduce earnings. Aroundtown held 3.9 billion euros in cash and liquid assets at the end of the first half.

Aroundtown stock traded at 1.66 euros on Lang & Schwarz at 10:04 CET on Friday, November 6, 2026, 2.47 percent above the Xetra close of Thursday, November 5, 2026. The real-time quote of Aroundtown stock reflects the current trading indication, while the refinancing debate remains focused on future funding costs.

The Euro Stoxx 50 provides the broader regional market backdrop for European property shares as investors assess rates, financing costs and asset valuations.

More news and analyses on Aroundtown stock will track the company's refinancing, portfolio allocation and operating results.