FCR Immobilien - Seeking new debt funding to grow portfolio

FCR Immobilien (FCR) reported positive funds from operations (FFO1) in Q120 on the back of portfolio expansion (driving rental income) and lower debt costs. Its EBITDA growth was further supported by gains from a few property disposals. According to the company, rental deferrals as a result of the COVID-19 lockdown for April and May reached €250k and we expect further deferrals to be relatively limited given the easing of restrictions and gradual rebound in retail customer traffic in Germany. The current distressed market environment might present buying opportunities for FCR, which would however require sizeable portfolio exits or (if these prove difficult to execute) external funding to fuel portfolio expansion.