PSP Swiss Property with a good start into the business year

For the first quarter of 2021, PSP Swiss Property reports net income excluding gains/losses on real estate investments of CHF61.8 million, an increase of 13.7 million or 28.5% compared to the same period last year (48.1 million). The growth was mainly due to higher rental income (+3.4 million) and higher gains from the sale of development projects and condominiums (+12.4 million), PSP said. Due to the Corona pandemic, the real estate company said it granted rent abatements in the amount of 1.6 million in the first quarter of this year. There were no rent abatements in the same period last year, but a total of 46 million was abated in 2020 as a whole. Operating expenses increased slightly from 12.9 to 13.2 million. Earnings per share excluding gains/losses on real estate investments amounted to CHF 1.35 (Q1 2020: CHF 1.05).

Net income reached 88.8 million, up from 47.9 million in Q1 2020. The increase of 40.9 million, or 85.3%, was explained on the one hand by the aforementioned effects and on the other hand by a portfolio revaluation of 33.2 million (Q1 2020: devaluation of 0.2 million), PSP said. Earnings per share amounted to CHF 1.94 (Q1 2020: CHF 1.04).

Portfolio value rises slightly

The balance sheet value of the portfolio at the end of the first quarter was 8.64 billion (end of 2020: 8.58 billion). In the reporting period, the Seestrasse development project in Kilchberg was sold for 20 million, with PSP reporting a profit of 7.3 million. At the Residenza Parco Lago project in Paradiso near Lugano, 13 units were sold. A total of 62% of the units have been sold and 4% reserved. The project is scheduled for completion in the current quarter.

The vacancy rate for the period was 3.1% (end-2020: 3.0%), of which 0.5 percentage points was due to ongoing refurbishment work, PSP said. Of the 52.4 million worth of leases expiring this year, 75% had been completed at the end of March, it said. The so-called Wault (weighted average unexpired lease term) of the overall portfolio was 3.9 years. The Wault of the ten largest tenants, which contribute around 30% of rental income, was 4.6 years.

For the financial year 2021, PSP Swiss Property continues to expect an Ebitda excluding gains/losses on real estate investments of around 275 million (2020: 271.1 million). In terms of vacancies, the company expects a rate of around 4.5% by the end of 2021. However, the forecasts are subject to the further development of the Corona crisis, PSP stresses. They are based on the assumption that the measures ordered by the authorities will be gradually eased and that the economic environment will normalize. (ah)