Zug Estates increases profit
In the first half of 2015, the Zug Estates Group almost doubled its consolidated net profit to CHF 39.4 million thanks to revaluation effects. Real estate income increased by 4.3 percent year-on-year to CHF 19.1 million.
Zug Estates achieved an operating result before depreciation and revaluation of CHF 18.6 million in the first six months, an increase of 0.7 percent compared with the same period last year.
The Group's operating expenses in the first half of the year were 6.2 percent higher than the corresponding figure for the previous year, mainly as a result of higher maintenance expenses and expenses in connection with property transactions, Zug Estates reports.
According to the company, it invested CHF 22.2 million in the further development of its sites in the first half of the year. In addition, the balance sheet value of the investment properties increased by CHF 32.8 million net due to the revaluation.
Due to the revaluation, EBIT of CHF 49.5 million and net income of CHF 39.4 million were significantly higher than the corresponding figures for the previous year. Net income excluding revaluation decreased slightly by CHF 0.4 million to CHF 11.5 million due to the disposal of a property and higher borrowing costs. Excluding transactions, consolidated net income excluding revaluation gains would have been slightly above the previous year's level, os Zug Estates.
The first half of the year was dominated by further developments at the Suurstoffi and Zentrum Zug sites. Among other things, a third realization phase with 170 rental apartments, student and cluster apartments, and 7,000 square meters of commercial space was initiated at the Suurstoffi site. The building application was submitted in April, construction is scheduled to start in autumn 2015 and occupation is planned for the second half of 2017. The investment volume is around CHF 110 million. More than half of the commercial space has already been leased on a long-term basis; among others, the market research company GfK will relocate to Suurstoffi. Plans for the campus of the Lucerne University of Applied Sciences and Arts and for a 70-meter-high residential high-rise in the center of the site are also progressing.
The Zug Estates Group designs, develops, markets and manages properties in the Zug region. The majority of the real estate portfolio is located in two sites in Zug and Risch Rotkreuz and is broadly diversified by type of use. In addition, the Group operates a City Resort in Zug with the business hotels Parkhotel Zug and City Garden and a range of restaurants. The total value of the portfolio as of June 30, 2015 was CHF 1.14 billion. (ah)
