SPS: Stable earnings, declining profit
Swiss Prime Site AG (SPS) maintained stable operating income in the first half of 2016. However, consolidated profit fell from CHF 191 million in the previous year to CHF 132 million.
In the same period of the previous year, SPS recorded higher revaluation gains and high gains on disposals than in the first half of 2016, which was the main reason for the current decline in profit. Adjusted for revaluation effects (revaluations and deferred taxes), SPS generated a profit of CHF 120.3 million, compared to CHF 133.4 million in the same period of the previous year.
At 497.4 million, the company's operating income was only slightly below the previous year's figure (497.9 million). In its core real estate business, SPS generated income from the rental of properties of 225.5 million (previous year: 225.2 million) and a profit from revaluations of 32.8 million (previous year: 99.7 million). In the Assisted Living business area, income almost doubled year-on-year from CHF 77.4 million to CHF 151.9 million. The Retail business division recorded stable sales and income of CHF 60.2 million.
As at June 30, 2016, the equity ratio was 45.3% (previous year: 44.4%), the return on equity (ROE) was 5.4% (previous year: 8.9%) and the return on invested capital (ROIC) was 3.3% (previous year: 4.5%).
Two acquisitions, one sale
In the Real Estate business division, SPS made two property purchases during the first half of the year, which complement the portfolio well and replace the properties sold in the previous year and their rental income. The Swiss headquarters of Partners Group in Baar, a fully let property built in 2009/2010 with modern office space, was acquired. SPS also purchased the Schönbühl regional shopping center in Lucerne, which is also fully let. In August, the property at Rue de Rive 3 in Geneva was sold at a profit.
The vacancy rate (Group) fell from 7.4% in the previous year to 6.4%. Swiss Prime Site expects a further reduction in the vacancy rate for the remainder of the year.
SPA reaches assets of more than CHF 1 billion
The assets of the Swiss Prime Investment Foundation grew to around CHF 603 million as at June 30, 2016. With the acquisition of the Leuenhof property on Zurich's Bahnhofstrasse in July 2016 The assets under management continue to grow and the Investment Foundation has already reached total assets of over CHF 1 billion before the end of the first financial year.
Together with Swiss Prime Site's own portfolio, assets under management thus total around CHF 11 billion.
SPS is planning further divestments of investment properties in the second half of 2016. At the same time, the company intends to take advantage of opportunities that arise in project developments, conversions and modernizations. (ah)
