Grand City Properties S.A.

Annual Accounts

For the year ended December 31, 2025

(with the report of the Réviseur d'Entreprises agréé thereon)

Table of contents:

Page

Management Report

Report of the Réviseur d´Entreprises Agréé

Balance Sheet

Profit and Loss Account

Notes to the Annual Accounts

1-13

14-18

19-23

24-25

26-51

37, Boulevard Joseph II

L-1840 Luxembourg

R.C.S. Luxembourg: B 165.560

Share Capital: EUR 17,618,790

Grand City Properties S.A.

MANAGEMENT REPORT

The management of Grand City Properties S.A. (the “Company”, and together with its investees the “Group”) presents

the Company’s audited annual accounts for the year ended December 31, 2025.

The Group is a specialist in residential real estate, investing in value-add opportunities in densely populated areas

predominantly in Germany as well as London.

The Group is focused on assets in densely populated urban locations with robust and sustainable economic and

demographic fundamentals, and with multiple value-add drivers that it can pursue using its skills and capabilities such as

vacancy reduction, increasing rents to market levels, improving operating cost efficiency, increasing market visibility,

identifying potential for high-return capex investments, and spotting potential for significant benefits from the Company’s

scale.

The Group’s well-balanced and diversified portfolio is composed of properties in attractive micro-locations with

identified value creation potential primarily located in major German cities and urban centers as well as in London.

CAPITAL MARKET, DEVELOPMENT AND PERFORMANCE

An important component of the Group’s financial structure is a strong diversification of funding sources, reducing the

reliance on any single source and resulting in a diversified financing mix. This is enabled by the Company’s wide reach

and proven track record in issuing instruments across various capital markets: straight bonds, perpetual notes and equity

capital. Moreover, the Company’s diversity is further improved through issuances in various currencies, issuing straight

bonds in CHF, JPY and HKD. The nominal amount of all foreign currency issuances is swapped into Euro until maturity.

Issuances in various currencies increase the investor base and provide expansion into a wider range of markets to attract

funding.

In addition, the Group maintains lasting relationships with dozens of banks and financial institutions, providing access to

bank financing. These banking relationships also provide access to loans from credit institutions and revolving credit

facilities which provide an additional flexible financing source. As of December 2025, the Company holds unused credit

line from several banks in the amount of EUR 200 million (2024: EUR 300 million) which are not subject to Material

Adverse Effect clauses.

During the reporting period the Company repaid its straight bond series E with 1.50% coupon and its straight bond series

U with 0.75% coupon amounting to EUR178.9 million and EUR 80 million respectively.

On December 8, 2025, Grand City Properties Finance S.à r.l, a wholly owned affiliated of the Company issued EUR 600

million principal amount of perpetual notes, bearing a coupon rate of 4.75% p.a. The Company is acting as guarantor of

these issued notes.

On December 9, 2025 following the issuance of the EUR 600 million perpetual notes, the Group announced the results

of a tender offer launched on December 1, 2025 in respect of its 6.125% (issued by Grand City Properties Finance S.à

r.l), 6.322%, 5.901% and 1.5% perpetual notes series. The Company accepted tenders in the aggregate amounts of EUR

393.2 million, EUR 44.1 million, EUR 23.8 million and EUR 97.3 million, respectively

On December 17, 2025, the Company completed with the tap placement of additional EUR 250 million (nominal value)

of its straight bond series H, issued at 87.522% of their principal amount, maturing in 2032 with a 2% EUR coupon. The

total aggregated principal amount of the straight bond series H increased to EUR 505 million (nominal value).

For further information see note 10 to the accompanying annual accounts.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CAPITAL STRUCTURE

The Company’s shares are listed on the Frankfurt Stock Exchange – Prime Standard. The Company also has Notes and

Bonds listed on the Irish Stock Exchange (in particular its EMTN Programme), Swiss Stock Exchange, Frankfurt Stock

Exchange and Luxembourg Stock Exchange. There are no restrictions on the transfer of the Company’s traded securities.

The Company has established over the years an impressive track record in capital markets, continuously accessing various

markets through its strong relationships with leading investment banks in the market, supported by two investments- grade

credit ratings (BBB stable from S&P and Baa1 stable from Moody’s). Since 2011 the Group has issued approximately

EUR 11 billion through dozens of issuances of straight bonds, convertible bonds, equity and perpetual notes.

The Company launched an EMTN programme, providing significant convenience and flexibility by enabling the issuance

in a short of time of financial instruments of various kinds, sizes, currencies and maturities.

COMPANY’S SHARES

During the reporting period there was no issuance of new ordinary shares.

LIKELY FUTURE DEVELOPMENTS

Focus on extracting value-add potential in attractive, densely populated regions, while keeping a conservative financial

policy and investment-grade rating

The Group’s investment focus is on the German and London residential markets that it perceives to benefit from favorable

fundamentals that will support stable profit and growth opportunities for the foreseeable future. The Group’s current

portfolio is predominantly focused on Berlin, North Rhine-Westphalia, the metropolitan regions of Leipzig, Dresden and

Halle, London, as well as other major cities and urban centers in Germany. The Group follows selective acquisition

criteria and benefits from internal growth potential from the acquisitions of high cash flow generating and under-rented

properties with upside potential.

Cash flow improvements through focus on rental income and cost discipline

The Group seeks to maximize cash flows from its portfolio through the effective management of its assets by increasing

rent, occupancy, and cost efficiency. This process is initiated during the due diligence phase of each acquisition, through

the development of a specific plan for each asset. Once taken over, and the initial business plan is realized, the Group

regularly assesses the merits of ongoing improvements to its properties to further enhance the yield on its portfolio by

increasing the quality and appearance of the properties, raising rents and further increasing occupancy. The Group also

applies significant scrutiny to its costs, systematically reviewing ways to increase efficiency and thus increase cash flows.

FINANCIAL RISK MANAGEMENT

The Group is exposed to market risk, credit risk, liquidity risk, operating risk and other risks.

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management

framework. The Board of Directors is supported by audit and risk committees that advise on financial risks and the

appropriate financial risk governance framework for the Group. The Group’s overall risk management approach has been

established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and monitor

risks and adherence to limits. The overall financial risk management approach is reviewed regularly to reflect changes in

market conditions and in the Group’s activities.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

FINANCIAL RISK MANAGEMENT (CONTINUED)

The Company follows its risk management strategy to hedge interest rates and foreign currency risks associated with its

financial assets and liabilities. The Group has high interest hedge ratio, with currently 95% of its debt protected against

interest rate increases. As part of the Group’s overall conservative financial approach, bonds issued in foreign currencies

are hedged to Euro until maturity. For more information see note 10 and note 16 to the accompanying annual accounts.

The Company holds an investment-grade credit ratings from both Standard & Poor’s (S&P) and Moody’s Investors

Service (Moody’s), with current long-term issuer ratings of BBB (stable outlook) and Baa1 (stable outlook), respectively.

S&P’s rating is based on S&P’s group rating methodology, the Company’s stand-alone credit profile (“SACP”) is bbb+.

Additionally, S&P assigned the Company a short-term rating of A-2. Since 2021, Moody's maintains its public rating on

the Company on an unsolicited basis.

For more information see note 24 to the accompanying annual accounts.

ACTIVITIES IN THE FIELD OF RESEARCH AND DEVELOPMENT

Due to the nature of its business, the Company does not engage in any research and development activities.

BRANCHES OF THE COMPANY

The Company did not operate any branches in 2025 or 2024.

INFORMATION ACCORDING TO ARTICLE 11(2) OF THE LUXEMBOURG TAKEOVER LAW

The following disclosure is provided pursuant to article 11 of the Luxembourg law of May 19, 2006 transposing Directive

2004/25/EC of the European Parliament and of the Council of April 21, 2004 on takeover bids, as amended (the “Takeover

Law”):

(a)

With regard to article 11 (1) (a) and (c) of the Takeover Law (capital structure), the relevant information is

available on page 10 and note 8 to the accompanying annual accounts. In addition, the Company’s shareholding

structure showing each shareholder owning 5% or more of the Company’s share capital is available below and

on the Company’s website, where the shareholding structure is updated on a regular basis.

(b)

With regard to article 11 (1) (b) of the Takeover Law, the ordinary shares issued by the Company are admitted

to trading on the regulated market of the Frankfurt Stock Exchange (Prime Standard) and are freely transferable

according to the Company’s articles of association (the “Articles of Association”).

(c)

In accordance with the requirements of Article 11 (1) c of the Takeover Law, the following significant

shareholdings were reported to the Company, as of December 31, 2025:

Shareholder Name

Number of shares

Percentage of voting rights

Aroundtown SA (through

Edolaxia Group Ltd)

110,180,680

63%

1) Edolaxia Group Ltd is a wholly owned affiliated of Aroundtown SA.

Total number of Grand City Properties S.A. shares as of December 31, 2025: 176,187,899.

The Company’s shares voting right held by Grandcity Holdings Ltd., a wholly owned affiliated of the Company are

suspended (see note 8 to the accompanying annual accounts).

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

INFORMATION ACCORDING TO ARTICLE 11(2) OF THE LUXEMBOURG TAKEOVER LAW (CONTINUED)

(d)

With regard to article 11 (1) (d) of the Takeover Law, each ordinary share of the Company gives right to one

vote according to article 8 of the Articles of Association. There are no special control rights attaching to the

shares. The voting rights attached to shares acquired by the Company, either directly or indirectly through

subsidiaries, pursuant to the buy-back-program are suspended.

(e)

With regard to article 11 (1) (e) of the Takeover Law, control rights related to the issue of shares are directly

exercised by the relevant employees. The key terms and conditions in relation to the Company’s incentive share

plan are described in note 9 Share-based payment agreements to the accompanying annual accounts.

(f)

With regard to article 11 (1) (f) of the Takeover Law, the Articles of Association impose no voting rights

limitations. However, the sanction of suspension of voting rights automatically applies, subject to the

Luxembourg law of January 11, 2008 on transparency requirements for issuers, as amended (the “Transparency

Law”) to any shareholder (or group of shareholders) who has (or have) crossed the thresholds set out in the

Transparency Law but have not notified the Company accordingly. In this case, the exercise of voting rights

relating to the shares exceeding the fraction that should have been notified is suspended. The suspension of the

exercise of voting rights is lifted the moment the shareholder makes the notification.

(g)

With regard to article 11 (1) (g) of the Takeover Law, as of December 31, 2025, the Company was not aware of

any agreements between shareholders that would lead to a restriction on the transfer of shares or voting rights.

(h)

With regard to article 11 (1) (h) of the Takeover Law, according to article 9 of the Articles of Association, the

members of the Board of Directors of the Company (the “Board”) shall be elected by the shareholders at their

Annual General Meeting by a simple majority vote of the shares present or represented. The term of the office

of the members of the Board shall not exceed six years, but they are eligible for re-election after such term. Any

member of the Board may be removed from office with or without specifying a reason at any time. In the event

of a vacancy in the office of a member of the Board because of death, retirement or otherwise, this vacancy may

be filled out on a temporary basis until the next meeting of shareholders, by observing the applicable legal

prescriptions. Further details on the rules governing the appointment and replacement of a member of the Board

are set out in pages 7–9 to the accompanying Corporate Governance Statement.

(i)

According to article 18 of the Articles of Association, any amendment to the Articles of Association made by

the general meeting of shareholders shall be adopted with a quorum and majority pursuant to article 450-3 of the

law of August 10, 1915 on commercial companies, as amended (the “1915 Law”).

With regard to article 11 (1) (i) of the Takeover Law, the Board of Directors is endowed with wide-ranging

powers to exercise all administrative tasks in the interest of the Company including the establishment of an

Advisory Board, an Audit Committee, a Risk Committee, a Remuneration Committee, a Nomination Committee

and an ESG Committee. Further details on the powers of the Board are described on pages 7–10 to the

accompanying Corporate Governance Statement.

According to article 5.1 of the Articles of Association, the Company may redeem its own shares to the extent

and under the terms permitted by law. The shareholders’ meeting held on June 26, 2024 authorized the Board,

with the option to delegate, to buy-back, either directly or through a subsidiary of the Company, shares of the

Company for a period of five (5) years not exceeding 20% of the aggregate nominal amount of the Company’s

issued share capital.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

INFORMATION ACCORDING TO ARTICLE 11(2) OF THE LUXEMBOURG TAKEOVER LAW (CONTINUED)

(j)

With regard to article 11 (1) (j) of the Takeover Law, the Company’s perpetual notes, bonds and security

issuances under the EMTN programme (listed on note 10 to the accompanying annual accounts) contain change

of control provisions that provide noteholders with the right to require the Company to repurchase their notes

upon a change of control of the issuer. The Company’s ISDA master agreement securing derivate transactions

with regard to its listed debts contains a termination right if the Company is financially weaker after a takeover.

(k)

With regard to article 11 (1) (k) of the Takeover Law, there are no agreements between the Company and

members of the Board or employees according to which, in the event of a takeover bid, the Company may be

held liable for compensation arrangements if the employment relationship is terminated without good reason or

due to a takeover bid.

CORPORATE GOVERNANCE STATEMENT

The Company places a strong emphasizes of corporate governance together with a high standard of transparency. This

culture of corporate governance is mandated by the Company’s Board of Directors, which includes a majority of

independent directors, as well as by the Company’s management. The Company focuses its efforts in maintaining the

trust it receives from its shareholders and bondholders. The Company is proud of the high degree of confidence of its

investors, and the Company’s shares and bonds are regularly placed with international leading institutional investors,

major global investment and sovereign funds.

In order to maintain the Company’s corporate governance and transparency standards, the Board of Directors has

implemented a Risk Committee, an Audit Committee, a Nomination Committee, a Remuneration Committee an ESG

Committee and an Advisory Board.

Moreover, the Company ensures that its Board of Directors and its senior executives have significant experience and

skills in the areas relevant to its business and industry.

The Company has two Codes of Conduct in place, one of which apply to business partnerships and the other to its

employees. The Employee Code of Conduct addresses issues and prohibitions related to corruption, bribery, human rights

abuse as well as discrimination. The Employee Code of Conduct also sets out a reporting framework for any potential

violations. Additionally, it also provides for disciplinary measures as may be required in case of violations. The Employee

Code of Conduct has been updated with a focus on improved transparency as well as reporting lines, which are now

supported by the Compliance Department and the availability of a whistleblower system.

In addition, the Group has a Diversity Policy in place. The Group’s Diversity Policy promotes a fair and inclusive

workplace culture, advancing equal opportunities and eliminating discrimination based on gender, ethnicity, disability,

age and other personal attributes. The Diversity Committee oversees the implementation and integration of diversity

initiative across the organization. The Diversity Policy is accessible via the Company’s website as well as through the

compliance intranet. The Diversity Policy outlines specific goals and measurable objectives to track progress in diversity

and inclusion. Regular assessments and reports are conducted to ensure transparency and accountability. Employees are

encouraged to participate in the diversity training programmes to foster a more inclusive environment. The Company is

committed to the representation of women on the Board of Directors and to ensuring a diverse mix of professional

background and expertise. The Board of Directors are selected on aspects such as their years of experience in the real

estate sector and other relevant industries. Good progress has been made in strengthening the number of women in

leadership. As of December 31, 2025, women held two of five positions on the Board of Directors.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

The Company is not subject to any compulsory corporate governance code of conduct or respective statutory legal

provisions. In particular, the Company is currently not required to adhere to the “Ten Principles of Corporate Governance”

of the Luxembourg Stock Exchange or to the German corporate governance regime, the latter of which are only applicable

to listed companies incorporated in Germany. Solely for purposes of section 4.1.1.1 of the Guide to the DAX equity

indices of STOXX Ltd., the Company declare that it does not deviate from recommendations C.10 (with sole reference

to its applicability to the Chair of the Audit Committee), D.8 and D.9 of the German Corporate Governance Code

(Deutscher Corporate Governance Kodex), in each case applied accordingly to a public limited liability company with a

one-tier governance system under Luxembourg law. In general, the Company already complies with most of the principles

and continues to take steps to implement environmental, social and corporate governance best practices throughout its

organization.

ANNUAL GENERAL MEETING

The Annual General Meeting of the shareholders of Grand City Properties S.A. (“AGM”) was held on June 24, 2025 in

Luxembourg. All of the items on the agenda were carried by a majority, including the approval of the statutory annual

accounts of the Company and the consolidated financial statements of the Group for the year ended December 31, 2024.

The AGM for 2026 is intended to take place on June 24, 2026, in Luxembourg.

COMPLIANCE, CODE OF CONDUCT AND DATA PROTECTION

The Company has incorporated a high degree of compliance with statutory laws as well as Company guidelines into its

management and corporate culture. This has also the benefit of mitigating reputational, which the Company considered

as a significant risk. Employees are provided with initial as well as on-going training related to issues connected with the

Code of Conduct for Employees. The Company’s compliance and risk management framework includes the

corresponding internal audit procedures and covers all areas of the business including transactions, property and asset

management, administrative and operative functions.

Internally, the Company’s Code of Conduct for Employees is a mandatory component for all employment contracts and

includes policies such as the Anti-Corruption Policy, Anti-Discrimination Policy, the Whistleblowing Policy, the Data

Protection Policy. Externally, business partners are required to adhere to the strict Code of Conduct for Business Partners.

This Code of Conduct for Business Partners lays out the legal and ethical framework to be followed and includes

references to a number of important issues such as prohibition of corruption and bribery, health and safety of employees,

environmental protection, money laundering practices, respect of human rights of employees, prevention of child labour

as well as forced labour, data protection and recognition of employees’ rights pertaining to freedom of association. The

Company´s Code of Conduct for Employees includes the prohibition of insider dealing. The Company is subject to several

obligations under Regulation (EU) No. 596/2014 (Market Abuse Regulation, “MAR”), as amended. Therefore, it has set

up a Company´s insider register and a process to ensure that persons on such list acknowledge their duties and are aware

of sanctions. The Company notifies pursuant to Article 19 para. 5 subpara. 1 sentence 1 of MAR all persons discharging

managerial responsibilities of their obligations in the context of managers’ transactions. Trainings for directors and

managers are held and information is distributed, and the Company has also established a guideline relating to dealing

with inside information and prohibition of market manipulation.

One of the Company’s important objectives has been to ensure the best possible protection of company data and personal

data from unauthorized access or abuse. In this regard, the company utilizes various modern technologies with high

standards of data privacy and security. Employees are also trained on that topic of data protection through video training

modules. Displaying its proactive nature, the Company has also prepared clearly communicated standard operating

procedures (SOPs) which assist all stakeholders in their daily operations involving data as well as ensure the effective

protection of data.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

BOARD OF DIRECTORS

The Company is administered by a Board of Directors that is vested with the powers to perform and manage in the

Company’s best interests.

The Board of Directors represents all shareholders and makes decisions solely in the Company’s best interests and

independent of conflicts of interest. The Board of Directors and senior management regularly evaluate the effective

fulfilment of their remit and compliance with strong corporate governance standards. The Audit Committee and the Risk

Committee also play an important role.

The members of the Board of Directors are elected by the shareholders at the AGM for a term not exceeding six years

and are eligible for re-election. The directors may be dismissed with or without cause at any time and at the sole discretion

of the shareholders at the Annual General Meeting.

The Board of Directors, a majority of whom are independent, resolves on matters on the basis of a simple majority, in

accordance with the Company’s articles of association. The Board of Directors chooses amongst the directors a

chairperson who shall have a casting vote in the event of tied vote.

At the AGM in 2025, the renewal of the mandates of Mr. Scot Wardlaw, Ms. Monica Porfilio and Mr. Markus Leininger

as independent directors were approved for a period of one year respectively. Their mandates will automatically expire

on the date of the AGM to be held in 2026.

At the AGM in 2025, the renewal of the mandate of Ms. Simone Runge-Brandner as a non-executive member of the

Board of Directors of the Company was approved for one year. This mandate will automatically expire on the date of the

AGM to be held in 2026.

The renewal of the mandate of Mr. Christian Windfuhr as executive member of the Board of Directors was also approved

at the AGM for one year. This mandate will automatically expire on the date of the AGM to be held in 2026.

MEMBERS OF THE BOARD OF DIRECTORS

NAME

POSITION

Mr. Christian Windfuhr

Director, Chairperson

Ms. Simone Runge-Brandner

Non-executive Director

Mr. Markus Leininger

Independent Director

Mr. Scot Wardlaw

Independent Director

Ms. Monica Porfilio

Independent Director

CEO

In October 2020, the Board of Directors resolved to delegate the daily management of the Company to Mr. Refael Zamir,

as Daily Manager (administrateur-délégué) of the Company under the endorsed denomination (Zusatzbezeichnung) of

Chief Executive Officer (CEO).

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

CFO

In January 2023, the Board of Directors additionally resolved to delegate the daily management of the Company to Mr.

Idan Hadad as Daily Manager (administrateur-délégué) of the Company under the endorsed denomination

(Zusatzbezeichnung) of Chief Financial Officer (CFO).

CCMO

In November 2025, the Board of Directors appointed Mr. Michael Bar- Yosef under the endorsed denomination

(Zusatzbezeichnung) of Chief Capital Markets Officer (CCMO) of the Company.

ADVISORY BOARD

The Board of Directors has established an Advisory Board to provide expert advice and assistance to the Board of

Directors. The Board of Directors decides on the composition, tasks and terms of the Advisory Board as well as the

appointment and dismissal of its members. The Advisory Board has no statutory powers under Luxembourg law or the

articles of incorporation of the Company. The members of the Advisory Board can be source of guidance when making

strategic decisions.

AUDIT COMMITTEE

The Board of Directors has established an Audit Committee for which it decides on the composition, tasks and term as

well as the appointment and dismissal of its members. The Audit Committee shall be composed of at least two members

who are independent directors. The responsibilities of the Audit Committee relate to the integrity of the annual accounts

and the consolidated financial statements, including reporting to the Board of Directors on its activities and the adequacy

of internal systems controlling the financial reporting processes and monitoring the accounting processes.

The Audit Committee is also tasked with monitoring the effectiveness and the adequacy of the internal controls and risk

management system. Where appropriate, the Committee may delegate specific monitoring tasks to the Company’s risk

Committee. In addition, the Audit Committee regularly reviews the compliance program of the Company in light of the

changing regulatory environment.

The Audit Committee provides recommendations to the Board of Directors on the audit of the annual accounts and the

consolidated financial statements of the Company and, in particular, shall monitor the independence of the approved

independent auditor, the additional services rendered by such auditor, the issuing of the audit mandate to the auditor and

determination of auditing focal points.

RISK COMMITTEE AND RISK OFFICER

The Board of Directors has established a Risk Committee. The Risk Committee exercises its functions relating to the

internal control and risk management systems within the scope of authority delegated by the Company’s Audit

Committee.

The Risk Committee can support the Board of Directors in fulfilling its oversight responsibilities relating to the different

types of risks to which the Company has exposure, review of the risk management structure, including its organization

and processes, and assessment and monitoring of the overall risk management to ensure that key risks are properly

identified and mitigated.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

RISK COMMITTEE AND RISK OFFICER (CONTINUED)

The Risk Committee shall be comprised of at least two members of the Board, of which membership at least half shall be

independent, and is supported by the Risk Officer. The Risk Officer’s responsibilities are determined and monitored by

the Risk Committee and are guided by the Risk Committee as part of its oversight role pursuant to the Rules of Procedure

of the Risk Committee, with the objective of bringing a systematic and disciplined approach to evaluate and improve the

culture, capabilities, and practices integrated with risk management.

The Risk Committee also reviews the Company’s risk assessments as well as the scope and effectiveness of the

Company’s risk management and internal control systems in mitigating risks and identifying, assessing and monitoring

risks.

REMUNERATION COMMITTEE

The Board of Directors has established a Remuneration Committee. The Remuneration Committee submits to the Board

its recommendation regarding the remuneration of directors and executive managers to the Board, taking into

consideration whether these proposals are in accordance with the remuneration policy adopted by the Company and the

performance of the persons concerned among other factors considered.

NOMINATION COMMITTEE

The Board of Directors has established a Nomination Committee. For directorship and significant senior management

positions to be filled, the Nomination Committee will make an evaluation of the existing and required skills, knowledge

and experience of candidates. Based on an assessment of the role, together with the skills, knowledge and experience

required, the Nomination Committee shall make recommendations in respect of prospective appointments to the Board.

As such, the Nomination Committee shall act in the best interests of the Company, and among others, assess succession

planning of outgoing directors and senior management, evaluate the required skills, knowledge, and experience for the

roles, consider proposals from shareholders, the Board and senior management, and make recommendations in respect of

candidates to the Board of Directors.

ESG COMMITTEE

The Board of Directors established an ESG Committee to supervise the Company´s ESG processes. In addition, the

Committee reviews and assesses the Company’s contribution to sustainable development. The ESG Committee shall be

composed by at least two members of the Board. The chairperson of the Committee shall be independent.

INTERNAL CONTROLS AND RISK MANAGEMENT SYSTEMS

The Company’s internal controls and risk management systems (“RM systems”) are designed to ensure that key risks,

financial and non-financial are identified, assessed, managed, and mitigated in a structured and consistent manner across

the Company. Oversight rests with the Board of Directors, and primary responsibility for the RM system rests with the

Audit Committee, which delegates certain responsibilities to the risk committee in accordance with the Audit Committee’s

rule of procedures. Senior management, the Risk officer and the designated risk owners are responsible for the

implementation and daily operation of the system.

GOVERNANCE AND FRAMEWORK

The RM systems are embedded into strategic planning, operational processes, and reporting cycles. The Board has

approved a Risk Management Policy which defines the Company’s risks appetite and tolerance levels, including zero

tolerance areas.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

INTERNAL CONTROLS

Internal controls ensure reliable financial reporting, compliance with laws and policies and effective operations. They

include segregation of duties, approval and authorization processes, reconciliations, and budget to actual analysis,

supported by documented procedures. Management performs regular monitoring, and the statutory auditor verifies the

consistency of the management report with the financial statements and applicable reporting requirement.

RISK IDENTIFICATION AND ASSESMENT

Risks, comprising both internal and external, are identified through a thorough risk assessment. Each business unit has

risk owners who document risks across strategic, operational, financial, legal/ regulatory and ESG dimensions. Risks are

assessed using standardized criteria for potential impact, financial and non-financial, and likelihood. The outcomes feed

into consolidated risk inventory and heat map, which support prioritization and monitoring. Emerging risk are identified

through ongoing environmental scanning.

RISK RESPONSE AND CONTROLES ACTIVITIES

For material risks, the Company applies appropriate response strategies such as avoidance, limitation, reduction, transfer,

or acceptance. High criticality risks require specific mitigation actions and periodic updates by risk owners, reviewed by

the Risk Officer. Control activities may include contractual safeguards, insurance solutions, financial limits, or operational

adjustments.

MONITORING AND REPORTING

The RM System is reviewed at least annually. Risk owners complete assessments at year end and the Risk Officer

validates and consolidates the results into Company level reporting for the Risk Committee, and, where relevant, the

Audit Committee. The Risk Officer reports on significant exposures, control issues, and the status of recommendations.

Immediate risks are escalated through a dedicated reporting template for urgent attention.

The Risk Committee periodically evaluates the effectiveness of the RM System, and the Risk Officer maintains a quality

assurance and improvement program to ensure alignment with leading practices and evolving business needs.

Internal control checks conducted by the Compliance Officer and compliance department further assist the Audit

Committee in monitoring and evaluating the effectiveness and correctness of the RM system.

For further information regarding the Company’s risk management objectives and policies, see note 24 to the

accompanying annual accounts.

SHAREHOLDERS’ RIGHTS

The Company respects the rights of all shareholders and ensures that they receive equal treatment. All shareholders have

equal voting rights and all corporate publications are transmitted through general publication channels and are also

available in a specific section on the Company’s website. The Company discloses its share ownership and additionally

discloses any shareholder position above 5% when it is informed by the respective shareholder. Shares held and/or

acquired by the Company, either directly or through subsidiaries, pursuant to its buy-back program (currently inactive),

are suspended from their voting rights.

The shareholders of the Company exercise their voting rights at each AGM of the shareholders, whereby each share is

granted one vote. The AGM of the shareholders takes place within 6 months after the end of the financial year at the

registered office of the Company, or at such other place as may be specified in the notice of the meeting.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

CORPORATE GOVERNANCE STATEMENT (CONTINUED)

SHAREHOLDERS’ RIGHTS (CONTINUED)

At the AGM,

the Board of Directors presents, among other items, the management report as well as the statutory and

consolidated financial statements to the shareholders.

The AGM resolves, among others, on the statutory and consolidated financial statements of the Company, the allocation

of the statutory financial results, the appointment of the approved independent auditor, the discharge and the (re-)election

of the members of the Board of Directors. The convening notice for the AGM of the shareholders contains the agenda

and is publicly announced in the Recueil électronique des sociétés et associations in Luxembourg (RESA), in a

Luxembourg newspaper and on the Company’s website at least thirty days before the AGM and in accordance with

applicable Luxembourg law.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

ESG – ENVIRONMENTAL, SOCIAL AND GOVERNANCE

The Group’s ESG Strategy is guided by our dedication to operating responsibly, creating value for our stakeholders,

including our tenants and employees and improving the environmental and social performance of our assets. The core of

our business model – investing in value-add opportunities instead of demolition and new asset development –

demonstrates our commitment to sustainable real estate. Overall, our approach and success are underpinned by a set of

comprehenn tangible benefits for our stakeholders, our investors, tenants, building users, local communities, employees

and the environment. The Company considers ESG to be pivotal to the overall success of the organization and has thus

created and integrated wide reaching ESG policies into the different functions of the Company. To monitor and manage

its sustainability – related measures, the Company is also committed to transparently reporting on its ESG progress.

The

Company has prepared its sustainability statement in compliance with the European Sustainability Reporting Standards

(ESRS), as mandated by the Corporate Sustainability Reporting Directive (CSRD).

The Company progress in ESG has been recognized externally, reaffirming Group’s position as an industry leader.

Sustainalytics further improved its rating on the Group, maintaining its low ESG-risk rating and placing the Company

among the top performers globally, while the Company ranked in the top 9% of real estate management and development

industry in S&P Global’s Corporate Sustainability Assessment (CSA). In 2025, the Company was included for the first

time in the Sustainability Yearbook 2026, which features only 848 companies out of more than 9,200 assessed by the

S&P CSA, setting the Company apart from its industry peers. The Company has also improved its rating by ISS, upgrading

to B- and maintaining the Prime Status. For the ninth consecutive year, the Company received the EPRA BPR Gold

Award and EPRA sBPR Gold Award for excellence in finance transparency and sustainability reporting.

ESG COMMITTEE AND ESG MANAGMENT

The Company’s governance incorporates consideration of sustainability issues at both the Board of Directors and

management levels. The operational ESG strategy has been established and is managed by the Board of Directors, which

has ultimate oversight of the overall ESG performance. The Board of Directors has established an ESG Committee to

supervise ESG strategy, regulatory compliance, and sustainability risk mitigation.

The ESG Committee is chaired by Mr. Markus Leininger and two additional voting members, Mr. Christian Windfuhr

and Ms. Monica Portfolio, both members of the Board of Directors, as well as advisory members including the Company’s

Head of Sustainability, the Group’s Head of Energy, the Chief Operations Officer of the German operations, and the

Group’s Head of Human Resources. The ESG Committee oversees strategic guidance on ESG topics and is responsible

for reviewing and assessing the Company’s responsible business strategy, policies and practices with respect to ESG. The

Committee meets at least twice a year, with additional meetings called as required, and sets the direction for the work of

the Sustainability Department.

The Sustainability Department acts as a cross-departmental interface, working across the Company, reviewing and

communicating on sustainability programs, as well as being responsible for sustainability reporting. It is led by the Head

of Sustainability. The Department also prepares the Company’s double materiality analysis and ESG reporting, as well

as responds to enquiries by investors and rating agencies on ESG topics. It collaborates closely with the Energy

Department, which applies its engineering expertise to implement the technical elements of our sustainability strategy.

There are constant exchanges of information between departments around ESG-related aspects.

Grand City Properties S.A.

MANAGEMENT REPORT (CONTINUED)

RESPONSIBILITY STATEMENT

The annual accounts of Grand City Properties S.A., prepared in accordance with the applicable reporting principles for

annual accounts, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company

and the management report of the Company includes a fair view of the development of the business, and describes the

main opportunities, risks, and uncertainties associated with the Company.

BOARD OF DIRECTORS APPROVAL

MEMBER

SIGNATURE

Mr. Christian Windfuhr, Director and Chairperson

____________________________________________

Ms. Simone Runge-Brandner, Director

____________________________________________

Mr. Markus Leininger, Director

____________________________________________

Date:

April 01, 2026

KPMG Audit S.à r.l.

Tel: +352 22 51 51 1

39, Avenue John F. Kennedy

Fax: +352 22 51 71

L-1855 Luxembourg

E-mail:

info@kpmg.lu

Internet:

www.kpmg.lu

To the Shareholders of

Grand City Properties S.A.

37, boulevard Joseph II

1840 Luxembourg

Luxembourg

REPORT OF THE REVISEUR D’ENTREPRISES AGREE

Report on the audit of the annual accounts

Opinion

We have audited the annual accounts of Grand City Properties S.A. (the "Company"), which

comprise the balance sheet as at 31 December 2025, and the profit and loss account for the

year then ended, and notes to the annual accounts, including a summary of significant

accounting policies.

In our opinion, the accompanying annual accounts give a true and fair view of the financial

position of the Company as at 31 December 2025, and of the results of its operations for the

year then ended in accordance with Luxembourg legal and regulatory requirements relating to

the preparation and presentation of the annual accounts.

Basis for opinion

We conducted our audit in accordance with the EU Regulation N° 537/2014, the Law of 23

July 2016 on the audit profession (the “Law of 23 July 2016”) and with International Standards

on Auditing (“ISAs”) as adopted for Luxembourg by the Commission de Surveillance du

Secteur Financier (the “CSSF”). Our responsibilities under the EU Regulation N° 537/2014,

the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further

described in the « Responsibilities of “réviseur d'entreprises agréé” for the audit of the annual

accounts » section of our report. We are also independent of the Company in accordance with

the International Code of Ethics for Professional Accountants, including International

Independence Standards, issued by the International Ethics Standards Board for Accountants

(“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical

requirements that are relevant to our audit of the annual accounts, and have fulfilled our other

ethical responsibilities under those ethical requirements. We believe that the audit evidence

we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most

significance in our audit of the annual accounts of the current period

These matters were

addressed in the context of the audit of the annual accounts as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of shares in affiliated undertakings

We refer to note 5 and to the corresponding accounting policy in note 2.5 to the annual

accounts.

a. Why the matter was considered to be one of most significance in our audit of the annual

accounts of the current period

As at December 31, 2025 shares in affiliated undertakings represent 50% of the total assets

of the Company.

Recoverability of shares in affiliated undertakings depends on the performance of the

subsidiaries, thus management performs an impairment assessment at each reporting date.

The identification of durable impairment indicators and the determination of the impairment

charge requires application of judgment by management.

Due to the significance of the amount and the required application of judgement by

management, the valuation of shares in affiliated undertakings is identified as a key audit

matter.

b. How the matter was addressed in our audit

Our procedures concerning the valuation of shares in affiliated undertakings included, but were

not limited to, the following:

—

We tested the design and implementation of the key controls around the identification of

triggers and assessment of impairment;

—

We challenged management’s assessment of the durable nature of the value adjustment,

if any;

—

We assessed the fair value of the underlying real estate investments used for the

assessment by management of the recoverability of the shares in affiliated undertakings;

—

We assessed how management adjusted the Equity of the subsidiaries in determining the

recoverable amount, including evaluating the appropriateness and consistency of such

adjustments.

Other information

The Board of Directors is responsible for the other information. The other information

comprises the management report and the Corporate Governance Statement but does not

include the annual accounts and our report of the “réviseur d'entreprises agréé” thereon.

Our opinion on the annual accounts does not cover the other information and we do not

express any form of assurance conclusion thereon.

In connection with our audit of the annual accounts, our responsibility is to read the other

information and, in doing so, consider whether the other information is materially inconsistent

with the annual accounts or our knowledge obtained in the audit or otherwise appears to be

materially misstated. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report this fact. We have

nothing to report in this regard.

Responsibilities of the Board of Directors and Those Charged with Governance for the

annual accounts

The Board of Directors is responsible for the preparation and fair presentation of the annual

accounts in accordance with Luxembourg legal and regulatory requirements relating to the

preparation and presentation of the annual accounts, and for such internal control as the Board

of Directors determines is necessary to enable the preparation of annual accounts that are free

from material misstatement, whether due to fraud or error.

The Board of Directors is responsible for presenting the annual accounts in compliance with

the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic

Format (“ESEF Regulation”).

In preparing the annual accounts, the Board of Directors is responsible for assessing the

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless the Board of Directors

either intends to liquidate the Company or to cease operations, or has no realistic alternative

but to do so.

Those charged with governance are responsible for overseeing the Company’s financial

reporting process.

Responsibilities of the “réviseur d’entreprises agréé” for the audit of the annual

accounts

The objectives of our audit are to obtain reasonable assurance about whether the annual

accounts as a whole are free from material misstatement, whether due to fraud or error, and

to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable

assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as

adopted for Luxembourg by the CSSF will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if, individually

or in the aggregate, they could reasonably be expected to influence the economic decisions of

users taken on the basis of these annual accounts.

Our responsibility is to assess whether the annual accounts have been prepared in all material

respects with the requirements laid down in the ESEF Regulation.

As part of an audit in accordance with the EU Regulation N° 537/2014, the Law of 23 July 2016

and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment

and maintain professional skepticism throughout the audit. We also:

—

Identify and assess the risks of material misstatement of the annual accounts, whether due

to fraud or error, design and perform audit procedures responsive to those risks, and obtain

audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than for one resulting

from

error,

fraud

may

involve

collusion,

forgery,

intentional

omissions,

misrepresentations, or the override of internal control.

—

Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control.

—

Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by the Board of Directors

—

Conclude on the appropriateness of the Board of Directors'

use of the going concern basis

of accounting and, based on the audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant doubt on the Company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we

are required to draw attention in our report of the “réviseur d’entreprises agréé” to the

related disclosures in the annual accounts or, if such disclosures are inadequate, to modify

our opinion. Our conclusions are based on the audit evidence obtained up to the date of

our report of the “réviseur d’entreprises agréé”. However, future events or conditions may

cause the Company to cease to continue as a going concern.

—

Evaluate the overall presentation, structure and content of the annual accounts, including

the disclosures, and whether the annual accounts represent the underlying transactions

and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence, and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with those charged with governance, we determine those

matters that were of most significance in the audit of the annual accounts of the current period

and are therefore the key audit matters. We describe these matters in our report unless law or

regulation precludes public disclosure about the matter.

Report on other legal and regulatory requirements

We have been appointed as “réviseur d’entreprises agréé” by the Shareholders on 24 June

2025 and the duration of our uninterrupted engagement, including previous renewals and

reappointments, is 14 years.

The management report is consistent with the annual accounts and has been prepared in

accordance with applicable legal requirements.

The Corporate Governance Statement is included in the management report. The information

required by Article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the

commercial and companies register and on the accounting records and annual accounts of

undertakings as amended, is consistent with the annual accounts and has been prepared in

accordance with applicable legal requirements.

We confirm that the audit opinion is consistent with the additional report to the audit committee

or equivalent.

We confirm that the prohibited non-audit services referred to in the EU Regulation N° 537/2014

were not provided and that we remained independent of the Company in conducting the audit.

We have checked the compliance of the annual accounts of the Company as at 31 December

2025 with relevant statutory requirements set out in the ESEF Regulation that are applicable

to annual accounts.

For the Company it relates to:

—

annual accounts prepared in a valid xHTML format;

In our opinion, the annual accounts of Grand City Properties S.A. as at 31 December 2025,

identified as 5299002QLUYKK2WBMB18-2025-12-31-1-en.Xhtml, have been prepared, in all

material respects, in compliance with the requirements laid down in the ESEF Regulation.

Our audit report only refers to the annual accounts of Grand City Properties S.A. as at 31

December 2025, identified as 5299002QLUYKK2WBMB18-2025-12-31-1-en.Xhtml, prepared

and presented in accordance with the requirements laid down in the ESEF Regulation, which

is the only authoritative version.

Luxembourg, 01 April 2026

KPMG Audit S.à r.l.

Cabinet de révision agréé

Alessandro Raone

Page

1/5

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_002

Annual Accounts Helpdesk :

Tel.

: (+352) 247 88 494

: centralebilans@statec.etat.lu

RCSL Nr. :

Matricule :

B165560

2011 2227 262

eCDF entry date :

BALANCE SHEET

Financial year from

(in

)

01/01

/2025

31/12/2025

EUR

Grand City Properties S.A.

37, Boulevard Joseph II

L-1840 Luxembourg

ASSETS

Reference(s)

Current year

Previous year

Subscribed capital unpaid

1101

101

102

Subscribed capital not called

1103

103

104

II.

Subscribed capital called but

unpaid

1105

105

106

Formation expenses

1107

7.521.927,33

107

8.972.614,84

108

Fixed assets

1109

2.884.679.188,88

109

2.498.566.837,81

110

Intangible assets

1111

111

112

Costs of development

1113

113

114

Concessions, patents, licences,

trade marks and similar rights

and assets, if they were

1115

115

116

acquired for valuable

consideration and need not be

shown under C.I.3

1117

117

118

created by the undertaking

itself

1119

119

120

Goodwill, to the extent that it

was acquired for valuable

consideration

1121

121

122

Payments on account and

intangible assets under

development

1123

123

124

II.

Tangible assets

1125

42.765,59

125

69.410,57

126

Land and buildings

1127

127

128

Plant and machinery

1129

129

130

Page

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The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_002

RCSL Nr. :

Matricule :

B165560

2011 2227 262

Reference(s)

Current year

Previous year

Other fixtures and fittings, tools

and equipment

1131

42.765,59

131

69.410,57

132

Payments on account and

tangible assets in the course

of construction

1133

133

134

III.

Financial assets

1135

2.884.636.423,29

135

2.498.497.427,24

136

Shares in affiliated undertakings

1137

2.884.634.923,29

137

2.498.495.927,24

138

Loans to affiliated undertakings

1139

139

140

Participating interests

1141

141

142

Loans to undertakings with

which the undertaking is linked

by virtue of participating

interests

1143

143

144

Investments held as fixed

assets

2.1

1145

145

146

Other loans

1147

1.500,00

147

1.500,00

148

Current assets

1151

2.878.643.699,98

151

3.661.429.755,98

152

Stocks

1153

153

154

Raw materials and consumables

1155

155

156

Work in progress

1157

157

158

Finished goods and goods

for resale

1159

159

160

Payments on account

1161

161

162

II.

Debtors

1163

2.527.908.741,51

163

3.271.901.209,86

164

Trade debtors

1165

165

166

becoming due and payable

within one year

1167

167

168

becoming due and payable

after more than one year

1169

169

170

Amounts owed by affiliated

undertakings

1171

2.467.833.139,89

171

3.211.458.004,42

172

becoming due and payable

within one year

1173

1.160.231.096,06

173

1.210.457.189,84

174

becoming due and payable

after more than one year

1175

1.307.602.043,83

175

2.001.000.814,58

176

Amounts owed by undertakings

with which the undertaking is

linked by virtue of participating

interests

1177

177

178

becoming due and payable

within one year

1179

179

180

becoming due and payable

after more than one year

1181

181

182

Other debtors

1183

60.075.601,62

183

60.443.205,44

184

becoming due and payable

within one year

1185

2.878.029,05

185

20.470.568,95

186

becoming due and payable

after more than one year

1187

57.197.572,57

187

39.972.636,49

188

Page

3/5

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_002

RCSL Nr. :

Matricule :

B165560

2011 2227 262

Reference(s)

Current year

Previous year

III.

Investments

1189

12.516.689,14

189

12.785.415,95

190

Shares in affiliated undertakings

1191

191

192

Own shares

1209

209

210

Other investments

2.1

1195

12.516.689,14

195

12.785.415,95

196

IV.

Cash at bank and in hand

1197

338.218.269,33

197

376.743.130,17

198

Prepayments

1199

199

200

TOTAL (ASSETS)

5.770.844.816,19

201

6.168.969.208,63

202

Page

4/5

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_002

RCSL Nr. :

Matricule :

B165560

2011 2227 262

CAPITAL, RESERVES AND LIABILITIES

Reference(s)

Current year

Previous year

Capital and reserves

1301

845.366.838,59

301

737.073.615,55

302

Subscribed capital

8.1

1303

17.618.789,90

303

17.618.789,90

304

II.

Share premium account

8.2

1305

323.303.145,69

305

323.303.145,69

306

III.

Revaluation reserve

1307

307

308

IV.

Reserves

1309

1.761.878,99

309

1.761.878,99

310

Legal reserve

8.3

1311

1.761.878,99

311

1.761.878,99

312

Reserve for own shares

1313

313

314

Reserves provided for by the

articles of association

1315

315

316

Other reserves, including the

fair value reserve

1429

429

430

other available reserves

1431

431

432

other non available reserves

1433

433

434

Profit or loss brought forward

1319

394.389.800,97

319

35.158.306,35

320

VI.

Profit or loss for the financial year

1321

108.293.223,04

321

359.231.494,62

322

VII.

Interim dividends

1323

323

324

VIII.

Capital investment subsidies

1325

325

326

Provisions

1331

331

332

Provisions for pensions and

similar obligations

1333

333

334

Provisions for taxation

1335

335

336

Other provisions

1337

337

338

Creditors

1435

4.925.477.977,60

435

5.431.895.593,08

436

Debenture loans

1437

4.214.624.109,43

437

4.405.920.150,55

438

Convertible loans

1439

439

440

becoming due and payable

within one year

1441

441

442

ii)

becoming due and payable

after more than one year

1443

443

444

Non convertible loans

1445

4.214.624.109,43

445

4.405.920.150,55

446

becoming due and payable

within one year

10.1

1447

589.777.328,81

447

300.530.313,54

448

ii)

becoming due and payable

after more than one year

10.2

1449

3.624.846.780,62

449

4.105.389.837,01

450

Amounts owed to credit

institutions

1355

60.306.666,67

355

60.354.087,20

356

becoming due and payable

within one year

1357

306.666,67

357

354.087,20

358

becoming due and payable

after more than one year

1359

60.000.000,00

359

60.000.000,00

360

Page

5/5

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_002

RCSL Nr. :

Matricule :

B165560

2011 2227 262

Reference(s)

Current year

Previous year

Payments received on account

of orders in so far as they are

not shown separately as

deductions from stocks

1361

361

362

becoming due and payable

within one year

1363

363

364

becoming due and payable

after more than one year

1365

365

366

Trade creditors

1367

5.799.379,20

367

1.077.557,92

368

becoming due and payable

within one year

1369

5.799.379,20

369

1.077.557,92

370

becoming due and payable

after more than one year

1371

371

372

Bills of exchange payable

1373

373

374

becoming due and payable

within one year

1375

375

376

becoming due and payable

after more than one year

1377

377

378

Amounts owed to affiliated

undertakings

1379

644.210.706,78

379

964.209.178,58

380

becoming due and payable

within one year

1381

5.722.706,78

381

531.889.285,40

382

becoming due and payable

after more than one year

1383

638.488.000,00

383

432.319.893,18

384

Amounts owed to undertakings

with which the undertaking is

linked by virtue of participating

interests

1385

253.524,83

385

386

becoming due and payable

within one year

1387

253.524,83

387

388

becoming due and payable

after more than one year

1389

389

390

Other creditors

1451

283.590,69

451

334.618,83

452

Tax authorities

1393

274.428,44

393

323.037,88

394

Social security authorities

1395

9.162,25

395

11.580,95

396

Other creditors

1397

397

398

becoming due and

payable within one year

1399

399

400

ii)

becoming due and

payable after more than

one year

1401

401

402

Deferred income

1403

403

404

TOTAL (CAPITAL, RESERVES AND LIABILITIES)

5.770.844.816,19

405

6.168.969.208,63

406

Page

1/2

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_003

Annual Accounts Helpdesk :

Tel.

: (+352) 247 88 494

: centralebilans@statec.etat.lu

RCSL Nr. :

Matricule :

B165560

2011 2227 262

eCDF entry date :

PROFIT AND LOSS ACCOUNT

Financial year from

(in

)

01/01

/2025

31/12/2025

EUR

Grand City Properties S.A.

37, Boulevard Joseph II

L-1840 Luxembourg

Reference(s)

Current year

Previous year

Net turnover

1701

700.000,00

701

700.000,00

702

Variation in stocks of finished

goods and in work in progress

1703

703

704

Work performed by the undertaking

for its own purposes and capitalised

1705

705

706

Other operating income

1713

80.031,87

713

519.211,15

714

Raw materials and consumables and

other external expenses

1671

-12.040.956,25

671

-8.641.394,54

672

Raw materials and consumables

1601

601

-7.841,68

602

Other external expenses

1603

-12.040.956,25

603

-8.633.552,86

604

Staff costs

1605

-138.675,98

605

-156.544,04

606

Wages and salaries

1607

-124.503,94

607

-140.631,10

608

Social security costs

1609

-14.172,04

609

-15.912,94

610

relating to pensions

1653

-9.584,75

653

-10.807,20

654

ii)

other social security costs

1655

-4.587,29

655

-5.105,74

656

Other staff costs

1613

613

614

Value adjustments

1657

-2.727.333,81

657

-2.776.883,58

658

in respect of formation expenses

and of tangible and intangible

fixed assets

1659

-2.727.333,81

659

-2.776.883,58

660

in respect of current assets

1661

661

662

Other operating expenses

1621

-999.696,32

621

-1.323.083,06

622

Page

2/2

The notes in the annex form an integral part of the annual accounts

CDVXWAP20260305T14540901_003

RCSL Nr. :

Matricule :

B165560

2011 2227 262

Reference(s)

Current year

Previous year

Income from participating interests

1715

66.801.476,00

715

324.175.766,04

716

derived from affiliated undertakings

1717

66.801.476,00

717

324.175.766,04

718

other income from participating

interests

1719

719

720

10. Income from other investments and

loans forming part of the fixed assets

1721

182.473,35

721

722

derived from affiliated undertakings

1723

723

724

other income not included under a)

1725

182.473,35

725

726

11. Other interest receivable and similar

income

1727

149.882.130,18

727

202.870.189,12

728

derived from affiliated undertakings

1729

118.580.850,30

729

143.118.688,01

730

other interest and similar income

1731

31.301.279,88

731

59.751.501,11

732

12. Share of profit or loss of

undertakings accounted for under

the equity method

1663

663

664

13. Value adjustments in respect of

financial assets and of investments

held as current assets

1665

68.386.677,97

665

-3.758.700,43

666

14. Interest payable and similar expenses

1627

-161.812.072,10

627

-152.362.525,26

628

concerning affiliated undertakings

1629

-37.204.033,02

629

-31.597.592,04

630

other interest and similar expenses

1631

-124.608.039,08

631

-120.764.933,22

632

15. Tax on profit or loss

1635

-8.618,42

635

636

16. Profit or loss after taxation

1667

108.305.436,49

667

359.246.035,40

668

17. Other taxes not shown under items

1 to 16

1637

-12.213,45

637

-14.540,78

638

18. Profit or loss for the financial year

1669

108.293.223,04

669

359.231.494,62

670

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025

Note 1. General

Grand City Properties S.A. (the “Company”) was incorporated in Grand Duchy of Luxembourg on December 16, 2011

as a “Société Anonyme” (public limited liability company) in accordance with the Luxembourg Law of August 10, 1915,

as amended, on Commercial Companies (the “Law”) for an unlimited period of time. Its registered office is at 37

Boulevard Joseph II, L-1840 Luxembourg and the Company is registered with the Registre de Commerce et des Sociétés

du Grand Duché de Luxembourg (the “Luxembourg R.C.S.”) under number B 165.560.

Grand City Properties S.A. is a holding company that holds together with its investees (the “Group”) real estate assets,

and is a specialist in residential real estate, investing in value-add opportunities in densely populated areas, predominantly

in Germany and in London.

The Company`s financial year starts on January 1

and ends on December 31

of each year.

The Company did not operate any branch in 2025 and 2024.

The purpose of the Company together with its investees is the acquisition, repositioning, and administration of real estate

property.

The Company may further acquire through contributions, firm purchases or options, patents, service marks, trademarks

licenses, know-how and other industrial, commercial or intellectual property rights and generally hold, license the right

to use it, sublicense, sell or dispose of the same, into whole or in part, for such consideration as the Company may think

fit, and to subcontract the management and development of those rights, trademarks and licenses and to obtain and make

any registration required in this respect.

The Company can also take whatever action necessary to protect rights derived from patents, trademarks, service marks,

licenses, know-how and other industrial, commercial or intellectual property rights, licenses, sublicenses and similar

rights against infringement by third party.

The Company can furthermore provide or cause to provide know how, development consulting advice and operating

services, promotion, representation and all operations of such nature.

The Company may make any transactions pertaining directly or indirectly to the taking of participating interests in any

enterprises in whatever form, as well as the administration, the management, the control and the development of such

participating interests.

It may participate in the creation, development, management and control of any company or enterprise. The Company

may borrow in any form whatever.

The Company may grant to the companies of the Group or to its shareholders, any support, loans, advances or guarantees,

within the limits of the Law.

Within the limits of its activity and the limits of the concerning legal dispositions, the Company can grant mortgage,

contract loans, with or without guarantee, and stand security for other persons or companies.

The Company may take any measure to safeguard its rights and make any transactions whatsoever which are directly or

indirectly connected with its purposes and which are liable to promote its development or extension.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 1. General (continued)

Since 2012 the Company’s shares are listed on the Frankfurt Stock Exchange. On May 9, 2017 the Company’s shares

were uplisted to the Prime Standard of the Frankfurt Stock Exchange in Germany. The Company’s shares are included in

the SDAX index of the Deutsche

Börse

The Company listed its different bonds and perpetual notes in Frankfurt, Irish, Swiss and Luxembourg stock exchanges

(see note 10).

Since July 1, 2021 the Group is consolidated in Aroundtown SA’s consolidated financial statement, a public limited

liability company (“Société Anonyme”), incorporated under the laws of the Grand Duché de Luxembourg. Aroundtown

SA is a real estate company with a focus on income generating quality properties with value-add potential in central

locations in top tier European cities.

The Company also prepares consolidated financial statements in accordance with the International Financial Reporting

Standards as issued by the International Accounting Standards Board (IASB) and adopted by the European Union (EU)

that were approved for issuance in accordance with the provisions of the Law.

The Company’s accounts are included in the consolidated financial statements of the Group. These consolidated financial

statements are also available at the registered office of the Company or its website (www.grandcityproperties.com).

Note 2. Summary of Significant Accounting Policies

2.1 Basis of presentation

The notes to the annual accounts of the Company are presented in thousands of Euro (KEUR), rounded to the nearest

KEUR unless otherwise stated and prepared in accordance with current legal and regulatory requirements and generally

accepted accounting principles in the Grand Duchy of Luxembourg.

The accounting and valuation policies are determined by the Board of Directors in compliance with the amended Law of

December 19, 2002. These policies have been consistently applied to the annual periods presented.

The annual accounts have been prepared assuming the Company will continue as going concern, which contemplates the

realization of assets and the satisfaction of liabilities in the normal course of business.

Certain figures for the year that ended 2024 have been reclassified to ensure comparability with the figures for the year

ended 2025.

2.2 Foreign currency transactions

The Company maintains its books and records in Euro.

Monetary assets and liabilities in foreign currencies are revalued at the exchange rate prevailing at the Balance Sheet date.

Exchange gains and losses are recorded in the Profit and Loss account.

Other non-monetary assets and non-monetary liabilities in foreign currencies are kept at historical exchange rates or

revalued at exchange rates prevailing at the Balance Sheet date, respectively if the latter rate is higher or lower.

Exchange losses are recognized immediately in the Profit and Loss account. Exchange gains are recorded in the Profit

and Loss account at the moment of their realization.

Formation expenses, fixed assets and other long-term assets in foreign currencies are kept at historical exchange rates at

the Balance Sheet date.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 2. Summary of Significant Accounting Policies (continued)

2.3 Formation expenses

Formation expenses consist of share capital increase costs, credit facility and bank loan transaction costs and bonds and

perpetual notes subscription fees. They are amortized on a straight-line basis over a period of 5 years or over the lifetime

of the related financial liability respectively.

If the financial instruments are repaid, converted, repurchased or redeemed on an earlier date, the related remaining

balances of unamortized financing costs are directly fully expensed in the profit and loss account in the year of repayment,

repurchase, redemption or conversion.

2.4 Tangible assets

Tangible assets are valued at purchase price including the expenses incidental thereto. They are depreciated over their

estimated useful economic lives.

2.5 Financial assets

Financial assets are recorded at cost. A value adjustment is recorded if the expected realization value is permanently lower

than the carrying amount in the opinion of the Board of Directors. These value adjustments are not continued if the reasons

for which the value adjustments were made have ceased to apply.

2.6 Debtors

Debtors are valued at their nominal value. They are subject to value adjustments where their recovery is compromised.

Value adjustments are recorded at the end of the financial year if the net realizable value is lower than the book value.

These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply.

2.7 Investments

Investments may include transferable securities, as well as other investments in shares and other securities equivalent to

shares and in bonds or other forms of securitized debts.

Transferable securities and other investments are valued at the lower of cost, including expenses incidental thereto and

calculated on the basis of the FIFO method or market value. A value adjustment is recorded where the market value is

lower than the cost of purchase. These value adjustments are reversed if the reasons for which the value adjustments were

made have ceased to apply.

The market value corresponds to:

a. the last available quoted price in an active market for quoted securities;

b. the fair value estimated with due care and in good faith by the Board of Directors based on market and business

assumptions.

2.8 Derivatives

Derivative financial instruments include mainly cross currency and interest swap and forward and option contracts.

Derivatives are initially stated at cost for derivatives purchased. At year-end, when a value adjustment is deemed

necessary, a value adjustment is set up in respect of individual unrealized losses resulting from their revaluation. In case

of hedging an asset and/or a liability that is not recorded at fair value, unrealized gains or losses are deferred until the

recognition of the realized losses or gains on the hedged items.

Commitments on those derivative financial instruments are disclosed in note 16.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 2. Summary of Significant Accounting Policies (continued)

2.9 Prepayments

The asset item includes expenditures incurred during the financial year but relating to subsequent financial year.

2.10 Provisions

Provisions are intended to cover losses or debts, the nature of which is clearly defined and, at the date of the balance sheet,

are either likely to be incurred or certain to be incurred but uncertain as to their amount or as to the date on which they

will arise.

Provisions may also be created to cover charges which have their origin in the financial year or in a previous financial

year, the nature of which is clearly defined and which at the Balance Sheet date are either likely to be incurred, or certain

to be incurred but uncertain as to their amount or as to the date on which they will arise.

2.11 Creditors

Creditors are recorded at their nominal value.

Where the amount repayable on account is greater than the amount received, the difference is shown as an asset and is

amortized on a straight-line basis over the period of the debt.

2.12 Income and charges

Income and charges are recorded on the accrual basis of accounting and as services are provided for fees invoiced.

2.12.1 Interest income and interest charges

Interest income and interest charges are accrued on a timely basis, by reference to the principal outstanding and

at the nominal interest rate applicable.

2.12.2 Dividend income

Dividend income from investments is recognized when the shareholder’s right to receive the payment has been

established.

2.13 Net turnover

Net turnover comprises the amount derived from the provision of services net of value added tax and other taxes directly

linked to turnover.

2.14 Taxation

The Company is subject to the general tax regulation applicable to commercial companies in Luxembourg.

2.15 Share-based payment transactions

The grant-date fair value of equity-settled share-based payment awards granted to directors, key management personnel

and senior employees is generally recognized as an expense, with a corresponding increase in provision, over the vesting

period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the

related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized

is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 3. Critical accounting estimates

The preparation of the annual accounts and the application of the accounting policies and methods described below require

critical accounting estimates that involve judgements and the use of assumptions. By their nature, the assessments

necessary for drawing up the annual accounts require the formulation of hypotheses and carry risks and uncertainties as

to their occurrence in the future.

Although the Board of Directors believes that it has taken all available information into account in determining these

judgements and estimates, the actual future profits and losses from the operations concerned could differ from these

estimates and therefore have a material impact on the annual accounts.

The use of estimates mainly concerns the estimation of the recoverable amount of the potentially impaired financial assets.

Note 4. Formation expenses

Formation expenses consist of share capital increase costs, credit facility and bank loan transaction costs, perpetual notes

and bonds subscription fees:

2025

2024

KEUR

Gross book value as at January 1,

59,715

53,334

Additions

1,250

6,381

Gross book value as at December 31,

60,965

59,715

Accumulated amortization as at January 1,

(50,742)

(47,994)

Amortization

(2,701)

(2,748)

Accumulated amortization as at December 31,

(53,443)

(50,742)

Net book value as at January 1,

8,973

5,340

Additions

1,250

6,381

Amortization

(2,701)

(2,748)

Net book value as at December 31,

7,522

8,973

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 5. Shares in affiliated undertakings

The movements on shares in affiliated undertakings are as follows:

2025

2024

KEUR

Gross book value as at January 1,

2,603,029

6,980,393

Additions

317,484

322,636

Disposals

(4,700,000)

Gross book value as at December 31,

2,920,513

2,603,029

Accumulated value adjustment as at January 1,

(104,533)

(99,474)

Allocations

(26,902)

(5,059)

Reversals

95,557

Accumulated value adjustment as at December 31,

(35,878)

(104,533)

Net book value as at January 1,

2,498,496

6,880,919

Additions, net

317,484

(4,377,364)

Value adjustment, net

68,655

(5,059)

Net book value as at December 31,

2,884,635

2,498,496

The Company beneficially owns the following shares in affiliated undertakings:

Affiliate

Country

Percentage

Holding

Acquisition Cost

(***)

Equity as at

December 31, 2025

(**)

Profit (loss) for

the year ended

December 31,

2025 (**)

KEUR

Grandcity Property Ltd

Cyprus

94,80%

(a)

2,333,718

2,839,210

140,587

(With registered office at 54B Artemidos &

Nikou Demetriou Corner, Scanner Avenue

Tower, 6031 Larnaca, Cyprus)

Grandcity Holdings Ltd

Cyprus

100%

(b)

417,680

321,711

(413)

(ex: Tespomo Limited, With registered office at

54B Artemidos & Nikou Demetriou Corner,

Scanner Avenue Tower, 6031 Larnaca, Cyprus)

Bareno Ltd

(With registered office at 54B Artemidos &

Nikou Demetriou Corner, Scanner Avenue

Tower, floor 2, 6027 Larnaca, Cyprus)

Cyprus

100%

(*)

(30)

(10)

Grand City Properties Holdings B.V.

The Netherlands

100%

(c)

40,042

66,909

(5)

(With registered office at H.J.E. Wenckebachweg

123, 1096 AM Amsterdam)

GCP Finance B.V.

(

ex:

Ymir Holding B.V, With registered office at

H.J.E. Wenckebachweg 123, 1096 AM

Amsterdam)

The Netherlands

100%

(4)

(1)

Grand City Properties Holdings S.à r.l

(With registered office at 37, Boulevard Joseph II,

L-1840 Luxembourg)

Luxembourg

100%

79,336

78,138

684

Tourmaline Holding S.à r.l

(ex: KPI Retail Property 35 S.à r.l., With

registered office at 37, Boulevard Joseph II, L-

1840 Luxembourg)

Luxembourg

100%

13,846

13,810

(37)

Grand City Properties Finance S.à r.l

Luxembourg

100%

(d)

629,902

1,832

(With registered office at 37, Boulevard Joseph II,

L-1840 Luxembourg)

2,884,635

3,949,646

142,637

(*) Less than KEUR 1.

(**) Based on unaudited individual financial information prepared in accordance with International Financial Reporting Standards (IFRS) as

adopted by the European Union (EU) as of December 31, 2025.

(***) Net of redemptions and impairments (value adjustments)

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 5. Shares in affiliated undertakings (continued)

(a)

As at December 31, 2025, the acquisition cost includes an investment of KEUR 2 in ordinary shares and an

investment of KEUR 2,333,716 in Redeemable Preference Shares.

(b)

As at December 31, 2025, the acquisition cost includes an investment of KEUR 69,262 in ordinary shares and

capital contributions, an investment of KEUR 357,394 in Redeemable Preference Shares and an impairment for

the investment of KEUR 8,976.

(c)

As at December 31, 2025, the acquisition cost includes an investment of KEUR 66,944 in ordinary shares and

capital contributions and an impairment for the investment of KEUR 26,902.

(d)

KEUR 629,719 is attributed to perpetual notes investors.

The Redeemable Preference Shares have similar rights as the ordinary shares have, with the exception that they

accumulate their right for dividends, in a way that any future dividend will be first paid to the Redeemable Preference

Shares holders and the remaining part will be paid to the ordinary shareholders pro-rata, and that the Redeemable

Preference Shares are redeemable at the sole discretion of the affiliate.

On December 29, 2025, Grandcity Property Ltd issued 1 Redeemable Preference Share to be allotted to the Company for

a total amount of KEUR 107,000 which has been fully paid.

On December 23, 2025, Grandcity Property Ltd distributed dividend to the Company in total amount of KEUR 66,801

(see note 21).

During 2025, the Company recognized an impairment (value adjustment) for the investment in Grand City Properties

Holdings B.V. of KEUR 26,902 (2024: nil) and reversed a previous impairment for the investment in Grandcity Holdings

Ltd of KEUR 95,557 (2024: KEUR 5,059 impairment).

In the opinion of the Board of Directors, no further value adjustments were required in respect of shares in affiliated

undertakings as of December 31, 2025.

Note 6. Amounts owed by affiliated undertakings

2025

2024

KEUR

Balance as at January 1,

3,211,458

106

Additions

224,115

3,080,155

Repayments

(923,184)

(178)

Interest income

116,008

143,119

Interest received

(175,144)

(11,744)

Foreign exchange gains (losses), net

2,573

Balance as at December 31,

2,455,826

3,211,458

Discount on amounts owed to affiliated undertakings

12,007

Total Amounts owed by affiliated undertakings

2,467,833

3,211,458

(a)

Becoming due and payable within one year

1,160,231

1,210,457

(b)

Becoming due and payable after one year

1,307,602

2,001,001

During the year, the Company recognized an interest income on loans derived from affiliated undertaking Grandcity

Property Ltd, Grand City Properties Holding S.à r.l. and other affiliated undertaking, in total amount of KEUR 114,727

(2024: KEUR 143,119), KEUR 1,273 (2024: nil) and KEUR 8 (2024: nil) respectively.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 7. Other debtors

Other debtors are composed of the below:

2025

2024

KEUR

Discount on perpetual notes and bonds

58,181

40,629

Collateral for derivatives

1,060

19,110

Tax receivable

835

704

Balance as at December 31,

60,076

60,443

(a) Becoming due and payable within one year

2,878

20,470

(b) Becoming due and payable after one year

57,198

39,973

Note 8. Capital and Reserves

8.1 Subscribed capital

2025

2024

Number of

KEUR

Number of

KEUR

Authorized

Ordinary shares of EUR 0.10 each (issued and fully paid)

400.000.000

40.000

400.000.000

40.000

Balance as at January 1,

176,187,899

17,619

176,187,899

17,619

Balance as at December 31,

176,187,899

17,619

176,187,899

17,619

There are no uncalled and called but not paid share capital.

During the reporting period the Company had not issued any new shares (2024: nil).

Company’s own shares held by Grandcity Holdings Ltd

(a)

During 2025, in connection with the share-based payment arrangements, Grandcity Holdings Ltd delivered

28,087 (2024: 41,326) Company’s own shares.

(b)

In December 2024, Grandcity Holdings Ltd sold 3,700,000 Company’s own shares.

As at December 31, 2025, the Company shares held by Grandcity Holdings Ltd amounted to 62,253 shares (2024: 90,340).

The voting rights of the Company’s own shares held by Grandcity Holdings Ltd are suspended.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 8. Capital and Reserves (continued)

8.2 Share premium account

The share premium derives directly from the capital increases which were affected since the date of incorporation and

exercise conversions of bonds into shares.

2025

2024

KEUR

Balance as at January 1,

323,303

Balance as at December 31,

323,303

The dividend distributions, if any, are paid out from the share premium account.

Resolution of dividend distribution

For the year

Amount per share

(in cents)

Gross amount

(KEUR)

Ex-date

Payment date

2014

20.00

24,333

June 25, 2015

July 3, 2015

2015

25.00

38,447

June 30, 2016

July 1, 2016

2016

68.25

112,468

June 29, 2017

July 1, 2017

2017

73.00

120,296

June 30, 2018

July 17, 2018

2018

77.35

129,002

June 27, 2019

July 22, 2019

2019

82.38

138,407

June 25, 2020

July 14, 2020

2020

82.32

136,433

July 01, 2021

July

202

2021

83.40

137,580

June 30, 2022

July 19,

2022

The Company has decided not to recommend a dividend payment for 2022-2024, following the increase in macro-

economic uncertainty and volatility and preserve further liquidity.

8.3 Legal reserve

The Company is required to allocate a minimum of 5% of its annual net profits to a legal reserve, until this reserve equals

10% of the subscribed share capital. This reserve may not be distributed.

As at December 31, 2025, the legal reserve amounted to KEUR 1,762 (2024: KEUR 1,762).

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 9. Share-based payment agreements

Description of share-based payment arrangements

As of December 31, 2025, the Company had the following share-based payment arrangements:

Incentive share plan

The incentive program for the directors, key management personnel and senior employees has up to four years

vesting period with target to enhance employees’ long-term commitment to the Company’s strategic targets.

The key terms and conditions related to the program are as follows:

Reconciliation of outstanding share options

The number and weighted average of shares under the share incentive program and replacement awards

were as follows:

2025

2024

Number of

In thousands

Outstanding as at January 1,

483

558

Granted during the year

478

156

Exercised during the year (*)

(208)

(231)

Outstanding as at December 31,

753

483

(*) Of which 28 thousand (2024: 41 thousand) shares have been transferred from the Company’s own shares held by

Grandcity Holdings Ltd (see note 8.1).

Vesting period

Number of

Weighted vesting

period

Contractual life

of the shares

March 1, 2022

–

June 30, 2029

753 thousand

1.67 years

Up to 4 years

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 10. Straight bond and Perpetual notes

Composition

Note

Nominal

amount

outstanding

Effective coupon (*)

Placement

Maturity

As at December 31

2025

2024

In thousands

KEUR

10.1 becoming due and payable withing

one year

Straight bond series E

(d, f)

1.50%

Apr-15

Apr-25

178,900

Straight bond series G

(d)

EUR 407,300

1.38%

Aug-17

Aug-26

407,300

Straight bond series K

CHF 125,000

0.96%

Mar-18

Sep-26

134,206

Straight bond series U

(g)

0.75%

Jul-19

Jul-25

80,000

Accrued interest straight bonds

43,078

32,577

Accrued interest perpetual notes

5,193

9,053

589,777

300,530

10.2 becoming due and payable after

more than one year

Straight bond series G

(d)

1.38%

Aug-17

Aug-26

407,300

Straight bond series H

(i)

EUR 505,000

2.00%

Oct-17

Oct-32

505,000

255,000

Straight bond series I

HKD 900,000

4.147%

Feb-18

Feb-28

98,399

111,544

Straight bond series J

(d)

EUR 583,300

1.50%

Feb-18

Feb-27

583,300

Straight bond series K

0.96%

Mar-18

Sep-26

132,809

Straight bond series L

JPY 7,500,000

1.20%

Jun-18

Jun-38

40,741

45,995

Straight bond series M

EUR 47,000

2.177%

Jul-18

Jul-33

47,000

Straight bond series N

EUR 88,000

3M Euribor + 1.71%

Feb-19

Feb-39

88,000

Straight bond series O

EUR 15,000

3M Euribor + 1.68%

Feb-19

Feb-34

15,000

Straight bond series P

HKD 290,000

4.301%

Mar-19

Mar-29

31,707

35,942

Straight bond series R

EUR 40,000

2.50%

Jun-19

Jun-39

40,000

Straight bond series V

EUR 70,000

2.293%

Aug-19

Aug-34

70,000

Straight bond series X

EUR 1,000,000

0.125%

Jan- 21

Jan-28

1,000,000

Straight bond series Y

(e)

EUR 500,000

4.375%

Jul-24

Jan-30

500,000

Perpetual Notes 2

(a,h)

EUR 1,700

6.332%

Sep-16

(**)

1,700

48,400

Perpetual Notes 3

(a,h)

EUR 1,300

5.901%

Apr-18

(**)

1,300

25,100

Perpetual Notes 4

(h)

EUR 602,700

1.5%

Dec-20

(**)

602,700

700,000

3,624,847

4,105,390

Total straight bond, perpetual notes

and accrued interest

4,214,624

4,405,920

(*) Including hedging impact where applicable

(**)

Perpetual notes

Composition

Nominal

amount

outstanding

(KEUR)

Placement

date

Coupon

Next call

date

Next reset

date

Coupon as

of next

reset date

Perpetual Notes 2- 200,000 KEUR

1,700

Sep-2016

6.332%

Jan-2026

Jan-2028

3.887% over

five-year mid

swap rate

Perpetual Notes 3-350,000 KEUR

1,300

Apr-2018

5.901%

Oct-2026

Oct-2028

2.682% over

five-year mid

swap rate

Perpetual Notes 4-700,000 KEUR

602,700

Dec-2020

1.5%

Mar-2026

Jun-2026

2.184% over

five-year mid

swap rate

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 10. Straight bond and Perpetual notes (continued)

10.3 Transactions occurred during 2024-2025

As of December 31, 2025, the Company has established a EUR 10 billion EMTN programme. Notes issued under the

EMTN programme are guaranteed by the Company.

(a)

On April 2, 2024, the Board of Directors approved a voluntary exchange and tender offer targeting the holders

of two outstanding perpetual notes, with nominal values of EUR 200 million (Perpetual Notes 2) and EUR 350

million (Perpetual Notes 3), carrying coupons of 6.332% and 5.901%, respectively (the “Existing Perpetual

Notes”).

The offer provided the holders of the Existing Perpetual Notes with two options:

Exchange option: exchange their holdings for newly issued perpetual notes at a specified exchange

ratio.

Exchange and partial redemption option: Exchange their holdings for new perpetual notes at the

specified exchange ratio and redeem 15% of their exchanged notes at a small premium over the market

prices prevailing prior to the offer.

On September 10, 2024, a second offer was approved for the same notes, allowing holders to:

Exchange option: exchange their holdings for new perpetual notes.

Exchange and partial redemption: exchange 80% of holdings and tender 20% for purchase at a small

premium over the market prices prevailing prior to the offer.

The first offer period commenced on April 2, 2024 and closed on April 9, 2024. The second offer period

commenced on September 10, 2024 and closed on September 18, 2024.

On April 10, 2024, the Company announced an acceptance of EUR 449 million in aggregate nominal amount of

Existing Perpetual Notes, reflecting an 82% acceptance rate. Subsequently, on September 19, 2024 the Company

announced an additional acceptance of EUR 25.3 million, leading to a combined acceptance rate of 85% for both

offers.

On April 16, 2024, Grand City Properties Finance S.à r.l, a wholly owned affiliated of the Company (the

“Perpetual Notes Issuer”) issued EUR 410 million in new perpetual notes and the Company repurchased EUR

34 million of the Existing Perpetual Notes through the tender offer. On September 26, 2024, Grand City

Properties Finance S.à r.l issued an additional EUR 22 million in new perpetual notes and the Company

repurchased EUR 1.6 million of the Existing Perpetual Notes via the tender offer. The Company is acting of the

guarantor of these issued notes. The newly issued perpetual notes have a coupon of 6.125% and are undated,

with an unlimited duration and can only be called by the Perpetual Notes Issuer on contractually agreed dates or

specific occasions. They are subordinated and feature a first reset date on April 16, 2030. The coupon rate

remains at 6.125% until this date. If the Perpetual Notes Issuer chooses not to exercise its call option at that time,

the coupon will reset as follows:

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 10. Straight bond and Perpetual notes (continued)

10.3 Transactions occurred during 2024-2025 (continued)

From April 2030 to April 2035: 3.508% over five-year swap rate

From April 2035 to April 2050: 3.758% over five-year swap rate

From April 2050 onwards: 4.508% over five-year swap rate

The newly issued perpetual notes were admitted to trading on the Euro MTF Market operated by the Luxembourg

Stock Exchange.

(b)

On April 9, 2024, the Company redeemed EUR 149.8 million principal amount of straight bond series W.

(c)

On June 24, 2024, the Company redeemed CHF 130 million principal amount of straight bond series Q.

(d)

On July 1, 2024, the Board of Directors decided to invite holders of three outstanding straight bonds EUR 667.6

million, EUR 600 million, and EUR 550 million, series J, G, and E respectively to tender the notes for purchase

by the Company for cash. The offer was open until July 8, 2024. As a result of the tender offer, on July 10, 2024,

the Company repurchased EUR 74.3 million, EUR 149.5 million, and EUR 14.5 million principal amount of

straight bond series J, G, and E respectively, excluding any accrued interest.

During the year 2024 and in addition to the offer, the Company bought back additional EUR 20.6 million, EUR

1 million and EUR 10 million principal amount of straight bond series G, E and J respectively for a cumulative

amount of EUR 31.6 million.

(e)

On July 9, 2024, under the EMTN program, the Company issued EUR 500 million Straight Bond series Y due

2030, at an issue price of 97.774% of the principal amount, with a coupon of 4.375%.

(f)

On April 17, 2025, the Company repaid EUR 178.9 million principal amount of straight bond series E.

(g)

On July 25, 2025, the Company repaid EUR 80 million principal amount of straight bond series U.

(h)

On December 8, 2025, Grand City Properties Finance S.à r.l issued EUR 600 million principal amount of

perpetual notes, bearing a coupon rate of 4.75% p.a. The Company is acting of the guarantor of these issued

notes. On December 9, 2025 following the issuance of EUR 600 million perpetual notes with a 4.75% coupon,

the Company announced the results of a tender offer launched on December 1, 2025 in respect of its 6.125%

(issued by Grand City Properties Finance S.à r.l), 6.322% (Perpetual Notes 2), 5.901% (Perpetual Notes 3) and

1.5% (Perpetual Notes 4) perpetual notes series. The Company accepted tenders in the aggregate amounts of

EUR 393.2 million, EUR 44.1 million, EUR 23.8 million and EUR 97.3 million, respectively. See also note

28(a).

The Group has the option to redeem any perpetual note for which the first call date to voluntarily redeem has

passed, at every future coupon payment date, or more frequently, as per the terms and conditions of each

respective note series.

(i)

On December 17, 2025, the Company completed with the tap placement of additional EUR 250 million (nominal

value) of straight bond series H, issued at 87.522% of their principal amount, maturing in 2032 with a 2% EUR

coupon. The total aggregated principal amount of the straight bond series H increased to EUR 505 million

(nominal value).

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 11. Security, negative pledge

The Company’s outstanding series of bonds contain a customary negative pledge clause that prohibits the Company, so

long as any of the Senior Notes remain outstanding, from creating or having outstanding any Security Interest (other than

a Permitted Security Interest) upon any of its present or future business, undertaking, assets or revenues (including any

uncalled capital) to secure any Capital Markets Indebtedness, unless the Company, before or at the same time in the case

of the creation of a Security Interest and, in any other case promptly takes any and all action necessary to ensure that:

(i) all amounts payable by it under the Senior Notes and the Trust Deed are secured by the Security Interest

equally and ratably with the Capital Markets Indebtedness to the satisfaction of the Trustee; or

(ii) such other Security Interest or other arrangement is provided either (i) as the Trustee in its absolute discretion

deems not materially less beneficial to the interests of the Senior Noteholders or (ii) as is approved by an

Extraordinary Resolution of the Senior Noteholders.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 12. Covenants in accordance with the bonds and financial debt terms and conditions

Under its outstanding bond series, the Company has covenanted, among other things, the following (capitalized terms

have the meanings set forth in the relevant bond series):

The Company undertakes that it will not, and will procure that none of its subsidiaries will, up to (and including)

the Final Discharge Date, incur any Indebtedness (other than Refinancing Indebtedness) if, immediately after

giving effect to the incurrence of such additional Indebtedness and the application of the net proceeds of such

incurrence:

The sum of: (i) the Consolidated Indebtedness (less Cash and Cash Equivalents) as at the Last Reporting

Date; and (ii) the Net Indebtedness (less Cash and Cash Equivalents) incurred since the Last Reporting

Date would exceed 60% of the sum of (without duplication): (i) the Total Assets (less Cash and Cash

Equivalents) as at the Last Reporting Date; (ii) the value of all assets acquired or contracted for

acquisition by the Group as determined at the relevant time in accordance with IFRS and the accounting

principles applied by the Company in the latest Financial Statements as certified by the auditors of the

Company, since the Last Reporting Date; and (iii) the proceeds of any Indebtedness incurred since the

Last Reporting Date (but only to the extent that such proceeds were not used to acquire Real Estate

Property or to reduce Indebtedness); and

The sum of: (i) the Consolidated Secured Indebtedness (less Cash and Cash Equivalents) as at the Last

Reporting Date; and (ii) the Net Secured Indebtedness (less Cash and Cash Equivalents) incurred since

the Last Reporting Date shall not exceed 45% of the sum of (without duplication): (i) the Total Assets

(less Cash and Cash Equivalents) as at the Last Reporting Date; (ii) the value of all assets acquired or

contracted for acquisition by the Group as determined at the relevant time in accordance with IFRS and

the accounting principles applied by the Company in the latest Financial Statements as certified by the

auditors of the Company, since the Last Reporting Date; and (iii) the proceeds of any Indebtedness

incurred since the Last Reporting Date (but only to the extent that such proceeds were not used to

acquire Real Estate Property or to reduce Indebtedness);

The Company undertakes that the sum of: (i) the Unencumbered Assets (less Cash and Cash Equivalents) as at

the Last Reporting Date; and (ii) the Net Unencumbered Assets (less Cash and Cash Equivalents) newly recorded

since the Last Reporting Date will at no time be less than 125% of the sum of: (i) the Unsecured Indebtedness

(less Cash and Cash Equivalents) at the Last Reporting Date; and (ii) the Net Unsecured Indebtedness (less Cash

and Cash Equivalents) incurred since the Last Reporting Date.

Up to and including the Final Discharge Date, the Company undertakes that, on each Reporting Date, the

Consolidated Coverage Ratio will be at least 1.8 (excluding ICBC loan, for which the Consolidated Coverage

Ratio will be at least 2.0).

“Financial Statements” means the annual audited consolidated financial statements (including the management report) of

the Company or the unaudited consolidated interim financial statements (including the management report) of the

Company, in each case as published by the Company as at the Last Reporting Date and prepared in accordance with IFRS;

As at December 31, 2025, under its outstanding bond series and loan the Company is compliant with its financial

covenants.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 13. Amounts owed to credit institutions

On March 8, 2023 the Company entered into a Term Facility Agreement amounting to EUR 60 million from Industrial

and Commercial Bank of China Ltd., Luxembourg Branch (“ICBC loan”).

The maturity date for the ICBC loan is five years after the signing date, means March 8, 2028 and it bears an interest rate

of 2% (modified in October 2024 from 1.4%+ 6 months Euribor) paid every 30th March and 30th September.

As at December 31, 2025, the accrued interest for the ICBC loan amounted to KEUR 307 (2024: KEUR 307) and the

interest expense recorded during the year amounted to KEUR 1,217 (2024: KEUR 2,749).

Note 14. Amounts owed to affiliated undertakings

2025

2024

KEUR

Balance as at January 1,

964,209

1,630,769

Additions

946,514

954,828

Repayments

(1,243,714)

(1,647,286)

Interest expenses

37,067

31,598

Interest paid

(59,865)

(5,700)

Balance as at December 31,

644,211

964,209

(a)

Becoming due and payable within one year

5,723

531,889

(b)

Becoming due and payable after one year

638,488

432,320

During the year the Company recognized interest expenses on loans from

affiliated undertakings, Grandcity Property Ltd

and Grand City Properties Finance S.à r.l for a total amount of KEUR 10,108 (2024: KEUR 13,185) and KEUR 26,959

(2024: 18,413) respectively.

During the year the Company recognized discount amortization expenses on loans owed to affiliated undertakings, Grand

City Properties Finance S.à r.l for a total amount of KEUR 137 (2024: nil), (note 6, note 23).

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 15. Related parties

During the year the Company had the following transactions with related parties:

For the year ended

December 31,

2025

2024

KEUR

Dividend income from affiliated undertakings- Grandcity Property Ltd (note 21)

66,801

322,565

Dividend income from affiliated undertakings- Grand City Properties Holdings S.à r.l (note 21)

1,611

Consultancy services fees income- Grandcity Property Ltd (note 17)

700

Office cost recharged- Aroundtown SA

Interest receivable income on loans from affiliated undertakings- Grandcity Property Ltd (note 6)

114,727

143,119

Interest receivable income on loans from affiliated undertakings- Greip Holding BV (note 6)

Interest receivable income on loans from affiliated undertakings- Tourmaline Holding S.à r.l. (note 6)

Interest receivable income on loans from affiliated undertakings- Grand city Holdings S.à r.l. (note 6)

1,273

Consultancy services fees expenses- ATCP management GmbH (note 20)

(500)

Director fees (note 20)

(237)

(269)

Brokerage fees from services rendered by affiliated undertakings- Grandcity Property Ltd (note 18)

(2,975)

(1,750)

Recharge cost from affiliated undertakings – Grand City Properties Finance S.à r.l. (note 18)

(1,721)

Interest expenses on loans from affiliated undertakings- Grandcity Property Ltd (note 14)

(10,108)

(13,185)

Interest expenses on loans from affiliated undertakings- Grand City Properties Finance S.à r.l (note 14)

(26,959)

(18,413)

As at December 31, 2025, the Company had outstanding receivable amount from Grandcity Property Ltd in the amount

of KEUR 2,416,613 (2024: KEUR 3,209,838) and had no outstanding payable amount (2024: KEUR 513,941).

As at December 31, 2025, the Company had outstanding receivable amount from Grand City Properties Finance S.à r.l.

in the amount of KEUR 481 (2024: nil) and had outstanding payable amount of KEUR 644,210 (2024: KEUR 450,260).

As at December 31, 2025, the Company had outstanding receivable amount from Grand City Properties Holding S.à r.l.

in the amount of KEUR 38,733 (2024: KEUR 1,611).

There were no other transactions between the Company and its key management or related parties during the year except

those described above and in note 5, 6, 7, 8, and 9.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 16. Derivative financial instruments

The Company uses derivative financial instruments to hedge its foreign exchange and the interest rate risk associated with

its straight bonds and Group’s debt instruments and to hedge the foreign currency risk derives from its indirectly holding

of several subsidiaries which operate in foreign currency.

The Company has entered into foreign exchange and interest rate contracts as detailed below:

Risk

hedged

Derivative

type

Amount

receivable

Amount

Payable

Maturity

Fair value as

at December

31, 2025

Unrealized

gains (losses)

not recorded

in profit or

loss account

Realized

gains (losses)

recorded in

profit or loss

account

in KEUR

Currency

risk

Forward and

Put option

KEUR 1,455,021

KGBP 1,375,000

2026-2027

(43,008)

18,161

(6,992)

Currency

risk

Swap

KHKD 900,000

KEUR 92,631

2028

4,995

(9,299)

(98)

Currency

risk

Swap

KHKD 290,000

KEUR 32,768

2029

(1,412)

(2,9

)

(142)

Currency

risk

Swap

KJPY 7,500,000

KEUR 75,500

2038

(22,560)

(7,54

)

(295)

In addition, the Company hedged its interest rate risk for straight bonds series O, N, M and V and for forecast Group’s

debt transactions using swap contracts for which their fair value, unrealized gains and net realized losses as at December

31, 2025 are KEUR 16,666 liability, KEUR 6,186 and KEUR 2,226 respectively.

The net realized losses in the amount of KEUR 9,754 (2024: KEUR 17,848 realized gain) disclosed in note 22 and note

23.

Note 17. Turnover

The net turnover concerns consultancy services to Grandcity Property Ltd amounted to KEUR 700 (2024: KEUR 700).

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 18. Other external expenses

For the year ended December 31,

2025

2024

KEUR

Insurance, telephone and other administrative expenses

(510)

(548)

Legal and professional fees

(618)

(960)

Advertising and marketing expenses

(93)

(94)

Bank fees and other financial transaction costs

(4,905)

(4,179)

Brokerage fees from services rendered by affiliated undertakings

(2,975)

(1,750)

Recharge cost from affiliated undertakings

(1,721)

Audit and non-audit services (note 19)

(1,219)

(1,102)

Total

(12,041)

(8,633)

Note 19. Audit and non-audit services

For the year ended December 31,

2025

2024

KEUR

Audit fees

(1,095)

(906)

Audit related fees

(111)

(189)

Tax related and other fees

(13)

(7)

Total

(1,219)

(1,102)

Note 20. Other operating expenses

For the year ended December 31,

2025

2024

KEUR

Director fees

(237)

(269)

Consultancy services fees expenses

(500)

Non-deductible VAT expenses and other tax and duties

(255)

(539)

Software licence

(8)

(15)

Total

(1,000)

(1,323)

Note 21. Dividend income from affiliated undertakings

Grandcity Property Ltd

On December 23, 2025, Grandcity Property Ltd distributed a preferred dividend to the Redeemable Preference Shares’

holders in total amount of KEUR 66,801 (2024: KEUR 322,565).

Grand City Properties Holdings S.à r.l

On October 1, 2024, Grand City Properties Holdings S.à r.l distributed dividend in an amount of KEUR 1,611.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 22. Other interest receivable and similar income

Other interest receivable and similar income consist of the following:

For the year ended December 31,

2025

2024

KEUR

Gains on buyback transaction of bonds and perpetual notes

1,198

15,792

Derivatives realized gains (note 16)

1,939

35,815

Interest income from bank deposit

5,404

8,145

Foreign currency exchange gains and other financial income

22,760

Total

31,301

59,752

Note 23. Interest payable and similar expenses

Interest payable and similar expenses consist of the following:

For the year ended December 31,

2025

2024

KEUR

Interest expenses on straight bonds

(57,737)

(52,007)

Interest expenses on perpetual notes

(14,613)

(24,206)

Discount amortization of straight bonds and perpetual notes

(12,551)

(11,226)

Discount amortization of loan from affiliated undertakings

(137)

Losses on buyback transaction of bonds and perpetual notes

(23,594)

(10,790)

Derivatives realized losses (note 16)

(11,693)

(17,967)

Interest expenses on loan from affiliated undertakings (note 14)

(37,067)

(31,598)

Interest expenses on loans from credit institution (note 13)

(1,217)

(2,749)

Foreign currency exchange losses and other financial expenses

(3,203)

(1,820)

Total

(161,812)

(152,363)

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 24. Financial risk management

Financial risk factors

The Company is exposed to the following major risks from its use of financial instruments:

•

Market risk

•

Credit risk

•

Liquidity risk

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk

management framework.

The Board of Directors is supported by a risk committee that advices on financial risks and the appropriate financial

risk governance framework for the Group. The Group’s risk management policies are established to identify and

analyze the risks faced by the Group, to set appropriate risk limits and controls, and monitor risks and adherence to

limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and in

the Group’s activities.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because

of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and

other price risk, such as equity price risk.

The Company enters into hedging transactions to hedge currency and interest risk related to its bonds issued

in HKD, CHF and JPY and Groups’ bank loans, to hedge currency risk related to its indirectly investment

in foreign operation in the UK.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or

customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities

(primarily trade and other receivables) and from its financing activities, including cash and cash equivalents

held in banks, derivatives and other financial instruments.

Liquidity risk

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched

position potentially enhances profitability but can also increase the risk of loss. The Company has

procedures with the objective of minimizing such losses such as maintaining sufficient cash and other highly

liquid current assets and by having available an adequate amount of committed credit facilities.

Operating risk

Operational risk is the risk that derives from the deficiencies relating to the Company's information technology and

control systems as well as the risk of human error and natural disasters. The Company's systems are evaluated,

maintained and upgraded continuously.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 24. Financial risk management (continued)

Other risks

Through ordinary course of business, the Company is exposed to various external risks. The Risk Committee is

constantly determining whether the infrastructure, resources, and systems are in place and adequate to maintain a

satisfactory level of risk. The potential risks and exposures are related, inter alia, to volatility of interest rate risk,

liquidity risks, credit risks, regulatory and legal risks, collection and tenant deficiencies, the need for unexpected

capital investments, and market downturn risk.

The Company sets direct and specific guidelines and boundaries to mitigate and address each risk, hedging and

reducing to a minimum the occurrence of failure or potential default.

Risk Factors — Macroeconomic, Geopolitical, Inflationary and Interest Rate Environment

The Group operates in a dynamic macroeconomic and geopolitical environment characterized by heightened

uncertainty, shifting policy responses, and periodic capital market volatility. These factors are interrelated

and can reinforce one another (e.g., geopolitical developments influencing energy prices and inflation, which

in turn affect interest rates, financing conditions, asset valuations and tenant affordability). While the Group

has no direct operational or portfolio exposure to the regions most affected by current conflicts or political

tensions, it remains exposed to the indirect economic consequences of these developments. The risks

described below, individually or collectively, could have a material adverse effect on the Group’s business,

net assets, financial condition, cash flows and results of operations.

Geopolitical Uncertainty

Global geopolitical uncertainty has increased in recent years, driven by tensions among major powers,

regional conflicts, evolving trade and industrial policies, sanctions and other restrictive measures. Although

the Group does not have direct exposure to the regions most affected by current conflicts, it is exposed to

indirect consequences such as energy market volatility, supply chain disruptions, shifts in migration patterns

within Europe, and changes in regulatory priorities. These dynamics have contributed to elevated operating

costs (particularly energy and heating), may affect tenants’ ability to meet rent and recoverable operating

costs, and can increase broader inflationary pressure. Volatility in capital markets linked to geopolitical

events can also reduce the Group’s ability to raise capital on attractive terms, increasing its cost of capital

and potentially limiting growth opportunities. Geopolitical developments have additionally influenced

migration across Europe, which can intensify demand pressure in residential real estate markets, exacerbate

supply–demand imbalances, and increase political focus on housing availability, regulatory intervention and

construction. The timing, scope and impact of further escalation or new conflicts are inherently uncertain;

the Group continues to monitor developments. See also note 28(b).

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 24. Financial risk management (continued)

Inflationary Environment

A sequence of global events, including the pandemic, supply chain disruptions, evolving geopolitical

tensions across multiple regions, and expansive monetary and fiscal interventions, has contributed to a

period of elevated inflation. Price pressures have been particularly notable in energy (oil, gas and electricity)

and in construction and maintenance materials. While inflationary pressures have continued to ease, the risk

of renewed increases remains, given continued sensitivity of energy markets to geopolitical events and the

vulnerability of supply chains to disruption. Higher price levels may affect tenants’ ability to bear operating

costs passed through under lease agreements. As a result, future rent losses or delays in the recovery of

operating expenses cannot be ruled out. To mitigate these risks, the Group provides guidance to tenants on

reducing energy consumption and managing utility usage efficiently. Persistently high energy and materials

inflation could also raise the cost of supplies for capital expenditure projects, increase ongoing utility

expenses, or cause delays in operational execution. Broader inflationary trends may increase personnel and

external service costs, negatively affecting profitability. In addition, elevated inflation has been associated

with rapid increases in interest rates and heightened capital market volatility, adversely impacting the cost

and availability of new financing and putting upward pressure on discount and capitalization rates used in

real estate valuations.

Interest Rates and Financing Conditions

In response to elevated inflation across the Eurozone, the European Central Bank (ECB) raised policy rates

rapidly. This tightening led to higher interest rates in Germany and across the Eurozone, which reduced real

estate valuations and transaction volumes and dampened investment activity. Starting in mid-2024, the ECB

began gradually easing rates, which alleviated some pressure; however, rates remain above levels seen in

prior years, and the risk of renewed increases cannot be excluded. Adverse impacts on the Group may

include:

- Valuation effects: Discount and capitalization rates used to determine the fair value of investment

properties under IAS 40 typically increase in rising rate environments, which would reduce the fair value of

the Group’s assets recorded on the balance sheet.

- Financing and refinancing risk: While the Group’s current debt structure primarily involves fixed rate

instruments or, where variable rates apply, is largely hedged, higher market rates may negatively affect the

Group’s ability to refinance upcoming maturities or raise additional financing on favourable terms. Lenders

may reduce exposure to real estate or face stricter capital and regulatory requirements, limiting debt

availability and increasing borrowing costs. Rising rates, or expectations of further increases, could make

funding for refinancing, acquisitions, capital expenditure and other activities more expensive, reducing

profitability.

- Negotiation constraints and hedging: In elevated rate environments, it may be more challenging to secure

financing terms that align with profit targets. Hedging instruments may not be available on acceptable terms

or may entail higher costs. A prolonged period of high rates would likely increase overall financing and

hedging costs, with corresponding negative effects on profitability.

- Perpetual notes: The Group have perpetual notes that reset their interest rate every five years based on a

margin plus the prevailing 5-year swap rate. If a reset date occurs during a period of high rates, future

coupons may rise materially, reducing profits available to shareholders. The Company generally aims to

replace such notes at the first call date; however, if new issuance costs exceed reset rates, calling the notes

may be uneconomical.

- Market liquidity and transactions: Higher rates can reduce buyer appetite for real estate, particularly where

acquisitions rely on mortgage financing or similar instruments, thereby constraining the Group’s ability to

dispose of properties on favourable terms when desired.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 24. Financial risk management (continued)

Interdependencies, Uncertainty and Monitoring

The above risks are interdependent and may reinforce one another. For example, geopolitical events may

increase energy prices, feeding inflation and driving tighter monetary policy, which can depress valuations

and transaction activity. While some price and rate pressures have eased, renewed volatility remains

possible. The Group actively monitors macroeconomic and geopolitical developments, reviews financing

options and maturity profiles, employs interest rate hedging where appropriate, engages with tenants to

support energy efficiency measures, and assesses selective timing of capital expenditure. Nevertheless, these

actions cannot fully eliminate the risks described.

Climate related risks

The significant impact of human activity on ecosystems and the climate have become apparent in recent

years. Climate change mitigation but also adaptation have become challenges for governments, society and

businesses. The Company does not only face increasing physical climate risks but also transitional climate

risks resulting from international pressure to move to a decarbonized world. This pressure is linked to

changes in investor and consumer demand, from regulatory changes as well as from other societal factors.

To better understand its physical climate risk exposure, the Company uses a renowned third-party tool for

asset-level physical risk assessment taking into account multiple climate scenarios and time horizons. This

analysis serves the identification of assets at higher risk exposure and to subsequently analyze their

sensitivity and vulnerability. Based on their outcome, any remaining risks will trigger develop asset-specific

adaptation plans. Besides gradually developing adequate adaptation plans, the Company is considering other

measures to mitigate the impact of such physical climate risks, for example through insurance coverage.

However, the increased occurrence of severe weather events will likely result in high insurance premiums.

The Building Resilience Task Force, an interdepartmental team set up to further cooperation in the Company

on climate adaptation, continues to further develop control mechanisms and risk mitigation measures for

physical climate risks.

In addition to physical climate risks, the Company also faces transitional risks. As a result of the more

apparent impact of climate change in recent years, regulators have increased their efforts to mitigate current,

as well as potential future impacts of climate change, through a wide range of regulations. Emerging

regulations in the Group's regions pursuing a phase-out of fossil fuels and improved energy efficiency in the

real estate sector present technological risks to the Company. These require careful attention when planning

maintenance and capex measures. At the EU level, the Energy Performance of Buildings Directive (EPBD)

includes new minimum energy performance requirements for buildings that progressively increase over

time, although the specific requirements can only be known once national level implementation commences

among member states. EU Member States have until May 2026 to transpose the EPBD into national law.

Noncompliance with these new energy requirements would result in an inability to let the assets and requires

increased capital expenditures to become compliant. The Company continuously monitors changes in

regulations and aims to minimize the financial risk through pro-active carbon reduction and energy

efficiency policies and programmes.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 24. Financial risk management (continued)

Climate related risks (continued)

Furthermore, the Group’s sustainability strategy incorporates self-set targets for material environmental,

social and corporate governance matters (ESG). If any of these self-set ESG goals are not met, this could

damage the Group’s reputation. Considering the increasing focus of market participants and lenders on

sustainability and "green financing", this could have a negative impact on the Group’s refinancing and access

to further financing, for example, via the capital market or by taking out loans, at all or on attractive terms.

If the Group fails to meet expectations and trends related to sustainability aspects in a timely manner or at

all, there could be a decline in demand from tenants.

Furthermore, this could also lead to investors divesting from the Group’s bonds or shares, as they also expect

ESG goals to be met. From a regulatory perspective, failure to achieve sustainability goals may also have a

negative impact on the Group. To take on a proactive approach towards mitigating transitional climate risks

and meet its environmental targets, the Company has developed a Climate Transition Plan to guide the

investment in on-site renewable energy and building energy efficiency improvements needed to achieve its

2030 emission reduction target while enabling further emission reductions down the line. The size and scope

of the investment program depend on the availability of governmental subsidies and grants, as is also subject

to increasing cost of material. Furthermore, potential new requirements set by the regulators or set as a

market standard, could increase the amount the Company would need to invest and potentially accelerate

the execution time of the investment program.

In 2022, the Company began the process of aligning to the Task Force on Climate-Related Financial

Disclosures (TCFD) Recommendations framework. Although the TCFD has been disbanded and integrated

into the International Sustainability Standards Board (ISSB), the framework’s core principles for corporate

climate-related risk disclosures have also been adopted by the European Sustainability Reporting Standards

(ESRS) E1 Standard. The early decision to align to best practices on climate-related risk disclosures leaves

the Company in a good position for ensuring compliance, although it is a process requiring continuous effort.

As part of this process, the Company updates its climate-related risk assessment each year.

Grand City Properties S.A.

Notes to the annual accounts

For the year ended December 31, 2025 (continued)

Note 25. Staff

The Company employed an average of 2 persons (2024: 2) during the financial year.

Note 26. Taxation

The Company is subject in Luxembourg to the general tax regulations applicable to all companies.

The corporation tax

rate for Luxembourg companies is 23.87% (2024: 24.94%).

The Company is incorporated and operates in Luxembourg and its subsidiaries and affiliates operate in various other

countries, which have enacted new legislation to implement the global minimum top-up tax. The Company is subject to

the top-up tax in relation to some of its subsidiaries and affiliates’ operations, where the statutory tax rate is below 15

percent. The newly enacted tax legislation is effective since January 1, 2024.

In 2024, Luxembourg announced a reduction in the corporate income tax rates. The tax rate for companies with taxable

income up to euro 175,000 decreased from 15% to 14%, and for companies with taxable income exceeding euro 200,000,

it decreased from 17% to 16%. These changes impacted the measurement of deferred tax assets and liabilities, as well as

tax provisions. The Company has proactively evaluated the potential effect of these changes and has adjusted its deferred

tax balances accordingly for future periods. The newly enacted tax legislation is effective from 2025 fiscal year and the

new corporation tax rate for Luxembourg companies is 23.87% (aggregated rate including also solidarity surtax and

municipal business tax).

Taxable income

Former CIT rate

New CIT rate

New aggregate rate (CIT and

municipal business tax) *

≤ EUR 175,000

15%

14%

21.73%

EUR 175,000 – 200,000

15% – 17%

14% - 16%

21.73% – 23.87%

≥ EUR 200,001

17%

16%

23.87%

* for taxpayers resident in Luxembourg-City (including the 7% employment fund surcharge)

Note 27. Commitment and contingencies

The Company has no material commitments as at December 31, 2025 and 2024, except for the commitments detailed in

note 10 and note 16.

Note 28. Subsequent events

(a)

In February 2026, following the tender offer, the Company exercised its option to fully redeem the outstanding

principal amount in respect of its 6.125% (issued by Grand City Properties Finance S.à r.l), 6.322% (Perpetual Notes

2) and 5.901% (Perpetual Notes 3) perpetual notes series in an aggregate amount of EUR 41.5 million. See note 10.3

(h).

(b)

Subsequent to the balance sheet date, geopolitical developments in the Middle East have continued to evolve,

resulting in a military conflict between the US and regional allies, notably Israel on one side, and Iran and regional

allies and proxies on the other side, contributing to increased regional and global economic uncertainty, particularly

impacting energy prices. Management has assessed the potential impact of these developments on the Company’s

financial position and operations, including the identification of any material uncertainties as part of the Company’s

going risk assessment, and has not identified any material direct impact as at the date of approval of these annual

accounts. Management continues to monitor the situation.

(c)

On March 6, 2026, Aroundtown SA published an offer to the Company shareholders to exchange up to 47,451,773

Company shares, representing up to approximately 26.9% of the Company’s total share capital, into Aroundtown SA

shares in a ratio of 4 Aroundtown SA shares for 1 Company share. The acceptance period started on March 6, 2026

and is expected to expire on April 9, 2026.