Zug Estates: Earnings and income increase
In the first six months of the current year, Zug Estates AG achieved an operating result before depreciation and revaluation of CHF 19.4 million, 4.5 percent more than in the same period last year. Real estate income rose by around three percent to CHF 19.7 million.
The Group invested CHF 30 million in the further development of its sites, in particular Suurstoffi, during the reporting period. The balance sheet value of the investment properties increased by 14.4 million net (previous year: 32.8 million) due to the revaluation. However, due to the lower revaluation compared with the previous year, EBIT of 32.8 million and net profit of 24.7 million were below the corresponding figures for the previous year. Net profit excluding revaluation increased by 5.6 percent to CHF 12.1 million.
The portfolio's vacancy rate was 4.2 percent as of June 30, 2016 (reporting date), compared with 5.4 percent at the end of December 2015. Zug Estates expects vacancy rates to fall further in the second half of 2016.
New projects on the Suurstoffi site
On the Suurstoffi site, Zug Estates plans to build a new building for the Department of Information Technology and parts of the Department of Economics of the Lucerne University of Applied Sciences and Arts by 2019. The development plan was made public in the spring and is to be submitted to the voters of Risch for a vote in November 2016. In parallel, a public competition was held for the new building, which was won by the consortium Büro Konstrukt & Manetsch Meyer. The winning project "Peripteros" is currently being developed into a preliminary project and subsequently into a construction project. The building application is to be submitted immediately after the decision on the development plan.
Zug Estates has also decided to press ahead with the planning of an office building for 600 workplaces on the site - the building permit has now been issued. According to the company, negotiations with an anchor tenant are at an advanced stage, so that Zug Estates expects to trigger the project before the end of the year. The building is to be constructed using a mixed timber construction method and, at 36 meters, will be the tallest timber building in Switzerland when completed.
In June 2016, the planning application for the 70-meter-high "Aglaya" garden tower in the center of the site was submitted. There will be 85 condominiums and office space for around 75 workplaces planned. Construction is scheduled to start in fall 2016 and occupation is planned for winter 2018/19.
CHF 75 million investments
The further development of the Suurstoffi site will continue to play an important role, Zug Estates announced with a view to 2016 as a whole. Overall, the Group expects to invest around CHF 75 million in its real estate portfolio in 2016.
For the year as a whole, the Group expects operating income before depreciation and revaluation to remain at the previous year's level. Income from revaluation of investment properties (net) is also expected in the second half of 2016, but will be lower than in the previous year, according to Zug Estates. The group result excluding revaluation will be at the previous year's level. (ah)
