PSP: Valuation effects depress profits
In the first nine months of the financial year, PSP Swiss Property generated a net profit (excluding valuation effects) of CHF 132 million (previous year: 122.6 million). However, including valuation effects, net income came in at 102.8 million, compared to 132.4 million in the same period last year.
According to PSP, a CHF 1.4 million increase in real estate income and a CHF 10.9 million gain from the sale of condominiums in the Salmenpark project in Rheinfelden and the Black residential tower on the Löwenbräu site in Zurich had a positive impact. In addition, contributions from own work capitalized and VAT withholding tax increased by a total of CHF 1.7 million to CHF 5.4 million.
This was offset by negative effects from the devaluation of CHF 31.8 million as of mid-2016 due to the regular semi-annual revaluation of the properties. In addition, a negative market value adjustment of CHF 6.7 million resulted as of the end of September from the initial valuation of the newly purchased property at Hardturmstrasse 101, 103, 105 / Förrlibuckstrasse 30 in Zurich, PSP said.
For the full 2016 financial year, the company expects an improved operating result compared to the previous year: Ebitda (excluding valuation effects) is expected to exceed CHF 240 million. Compared with 2015 (232.7 million), higher income from the sale of condominiums is forecast in particular.
Real estate portfolio with a balance sheet value of 6.9 billion
As of the end of September 2016, PSP's real estate portfolio comprised 161 office and commercial buildings as well as five development sites and five individual projects. The balance sheet value of the entire portfolio amounted to CHF 6.884 billion (end of 2015: 6.724 billion). In June 2016, the investment property at Avenue de Beauregard 1 in Fribourg was sold for 12.7 million. In July 2016, an office and commercial building at Hardturmstrasse 101, 103, 105 / Förrlibuckstrasse 30 in Zurich was purchased for 145 million.
The first stage of the large-scale Salmenpark project in Rheinfelden, involving an investment of around CHF 180 million, is expected to be completed by the end of 2016. The revised building application for the second stage with an investment sum of around 70 million is expected to be submitted at the end of 2016. Here, 100 condominium units are to be built.
The property at 40 rue du Marché in Geneva is undergoing extensive renovation. Around CHF 15 million will be invested by 2018.
The two properties at Förrlibuckstrasse 178/180 and Hardturmstrasse 181, 183, 185 (Orion project) in Zurich West will be demolished and replaced by a new commercial building. The building application is expected to be submitted at the end of 2016. Construction is planned for 2018 to 2020. The investment sum will amount to around CHF 120 million.
On the Paradiso site in Lugano, construction of a residential building with 65 condominiums as well as office and retail space is scheduled to start in the first quarter of 2017. From today's perspective, the investment sum amounts to around CHF 65 million. The intention is to sell all units after completion.
9.4 percent Vacancy rate
The vacancy rate in PSP's real estate portfolio was 9.4 percent at the end of September 2016 (end of June 2016: 9.1%). Of this, 1.1 percentage points were due to ongoing renovation work on various properties, PSP said. Properties in Zurich West and Wallisellen, with an asset value of CHF 0.7 billion, contributed a total of 1.8 percentage points to the vacancy rate. The remaining properties with an asset value of CHF 5.4 billion (i.e. the total portfolio excluding properties under redevelopment and those in Zurich West and Wallisellen) accounted for 6.5 percentage points.
For the financial year 2016, PSP Swiss Property expects an Ebitda (excluding gains/losses on real estate investments) of more than CHF 240 million (2015: 232.7 million). In terms of vacancies, an improved rate of around 9.5 percent is now expected as at the end of 2016; previously, PSP had expected a rate of ten percent. (ah)
