Gagfah Reports Higher FFO After German Landlord Cuts Expenses

Gagfah SA (GFJ), the second-biggest owner of German homes, said third-quarter funds from operations rose 37 percent after the company reduced its expenses.

FFO excluding disposals, a measure of a property company’s ability to generate cash, climbed to 29.9 million euros ($38.1 million) from 21.8 million euros a year earlier, the Luxembourg- based company controlled by Fortress Investment Group LLC (FIG) said in a statement today. Net interest expenses fell to 63.3 million euros from 93.2 million a year earlier.

Gagfah is selling its 38,000 apartments in Dresden to help pay 3.1 billion euros of debt due next year. Fortress is among the private-equity firms facing debt deadlines after buying German properties with the cheap credit available in the years before the global financial crisis started in 2008.

“Refinancing will remain an important driver for our share price, and we are on track towards resolving our 2013 debt maturities,” Gagfah Chief Executive Officer Stephen Charlton said in the statement.

Gagfah shares have more than doubled in Frankfurt trading this year, the second-best performing stock on the German DAX Mid-Cap Index for medium-sized companies, which has gained 26 percent.

To contact the reporter on this story: Dalia Fahmy in Berlin at

To contact the editor responsible for this story: Andrew Blackman at

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