PSP Swiss Property increases net profit in Q1
PSP Swiss Property reports a net profit (excluding valuation effects) of CHF 43.2 million for the first quarter of 2018. This is almost nine percent or CHF 3.5 million more than in the same period of the previous year.
The balance sheet value of PSP Swiss Property's total portfolio amounted to CHF 7.27 billion as at the end of March 2018, compared with around CHF 7.05 billion at the end of 2017. In the first quarter of this year the real estate portfolio acquired from Edmond de Rothschild, consisting of nine office properties, integrated. In addition, the Grosspeter Tower in Basel was completed and reclassified to the investment portfolio.
According to PSP Swiss Property, the completion and reclassification of the Grosspeter Tower in particular led to a slight increase in the vacancy rate from 8.2% at the end of 2017 to 8.5% (as at the end of March 2018). At the end of the first quarter, 68.4 percent of the space in the Grosspeter Tower was vacant. However, the tenancy agreement with anchor tenant Bayer began in May, reducing the vacancy rate to around 30 percent, according to PSP. The company expects a further reduction in the vacancy rate over the next few months.
The company also reports that 1.0 percentage points of the total vacancy rate are attributable to ongoing refurbishment work. Of the rental agreements worth 29.1 million expiring in 2018, 64% had been renewed or extended as at the end of March 2018.
According to the information provided, net profit (excluding valuation effects) amounted to 43.2 million in the reporting period - the reasons for the year-on-year increase were the increase in own work capitalized in connection with the portfolio purchase from Edmond de Rothschild, higher other income and a 0.6 million reduction in financial expenses. Income from real estate rose by 0.7 million to 69.1 million.
Net profit (including valuation effects) amounted to 40.3 million (Q1 2017: 39.7 million). According to PSP, the initial valuation of the acquired portfolio resulted in an impairment loss of 3.9 million.
Equity amounted to CHF 4.03 billion, which corresponds to an equity ratio of 54%. At the end of March 2018, equity per share (net asset value; NAV) amounted to CHF 87.94 (end of 2017: CHF 86.96). NAV before deduction of deferred taxes amounted to CHF 105.37 (end of 2017: 104.22).
PSP Swiss Property expects EBITDA (excluding valuation effects) of over 235 million for the full financial year (2017: 242.2 million). Property income is forecast to increase by around 8 million, while income from the sale of condominiums is expected to decline. Due to successful letting activities, the company is lowering its vacancy rate forecast: a rate of around 7.5% is now expected, compared to the previous forecast of 8.5%.
