Intershop with slightly higher real estate income
The Intershop Group generated a net profit of CHF 56.2 million or CHF 28.11 per share in fiscal year 2015. Equity as of December 31 increased slightly to 558 million.
Intershop reports an equity ratio of 40 percent and a return on equity of 10.4 percent for fiscal year 2015. The investment portfolio generated a gross return of 6.5 percent and a net return of 5.7 percent. The vacancy rate of the investment properties fell to 10.6 percent in the past fiscal year. The Intershop Board of Directors will propose to the Annual General Meeting an unchanged dividend payment of 20 francs per share (distribution volume: 40 million).
In addition to the ongoing rental business, the success from the realization and sale of the "eden5" condominium project in Zurich contributed to the above-average return on equity. Intershop focused primarily on developing its own portfolio in the past fiscal year. There were no other significant sales or acquisitions.
60 properties worth more than one billion
As of the balance sheet date, the Intershop portfolio comprised 60 properties (including development and promotion properties as well as land parcels) with a leasable area of around 582,000 square meters and a market value of over one billion. Rental income for the reporting period continued to be composed of office and education (48%), commercial and logistics (32%), residential and parking (13%), and retail and hospitality (7%). The value of the real estate portfolio at the end of the year under review was 1.246 billion and includes an appreciation of investment and development properties of 2.6 million.
Despite the sales made in 2014, rental income increased slightly year-on-year to 83.9 million. Income from investment properties owned by the company throughout the reporting year increased by one percent. The sale of real estate resulted in a pre-tax gain of 12.5 million in 2015. Real estate expenses decreased slightly to 9.1 million.
40 million credit limit for Corestate Capital
In the case of the investment in the private equity company Corestate Capital, which is primarily active in the German real estate market, the pro rata profit for Intershop fell from four million to one million. This includes a currency loss of 1.6 million, it says. Corestate Capital was acquired in the fall of 2013, and Intershop currently holds a 28 percent minority interest. A planned IPO of Corestate had been cancelled at the beginning of November. Intershop has granted the Company a credit line of 40 million (until the end of June 2016; extendable until the end of December 2016). According to the annual report, 20.7 million of this had been drawn down as of the end of December 2015.
Future return on equity of at least eight percent in sight
The leasing environment for commercial space remains challenging, and there are increasing signs of weakening demand in the rental housing market, Intershop ventures an outlook for the current fiscal year. Based on this, the company expects a slight increase in the vacancy rate for investment properties. The negative interest rate environment is also expected to persist and negatively impact the Group's interest expense.
Intershop will take advantage of "attractive opportunities to realize acquired added value through sales". If the transaction market for "challenging properties" becomes more liquid again and acquisition opportunities arise, these will be seized, the company writes. Overall, Intershop expects to be able to generate a return on equity of at least eight percent on a multi-year average again in 2016. (mr)
