Gagfah Scraps Dividend as Real-Estate Sales Reduce Funds From Operations

Gagfah SA (GFJ), the biggest residential landlord in Germany, said its third-quarter funds from operations dropped as property sales dented rental income.

FFO, which gauges a property owner’s ability to generate cash, fell to 11 cents a share from 19 cents a year earlier, Gagfah said after the market closed yesterday. The Luxembourg- based company won’t pay a dividend for the quarter.

Gagfah, controlled by asset manager Fortress Investment Group LLC, said its net asset value was 12.10 euros ($16.65) a share at the end of September. The shares rose to as much as 4.37 euros after Gagfah said it will try to narrow the gap between the price and NAV.

“Given the current discount to NAV and the volatility in the equities market overall, we will continue to explore avenues to help us get to a stable and more reflective valuation,” Gagfah said.

The net loss swelled to 18.9 million euros from 7.5 million euros a year earlier as the company paid more tax. Income from Gagfah’s properties dropped to 225.4 million euros from 237.6 million euros. The company’s portfolio declined to 154,472 homes from 158,806.

Gagfah was up 5 cents, or 1.2 percent, at 4.35 euros at 12:01 p.m. in Frankfurt, raising the real-estate investor’s market value to 980 million euros. The shares have fallen 26 percent in the past six months, while the Bloomberg EMEA Real Estate Index has dropped 17 percent.

To contact the reporter on this story: Andrew Blackman in Berlin at ablackman@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

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