Pax Anlage: Half-year results in line with expectations
Pax Anlage AG believes it is on track with its strategic realignment. This was also reflected in the results for the first half of 2016, according to the real estate group.
Profit for the first half of the year amounted to CHF 600,000, compared to CHF 12.7 million in the previous year, which is in line with expectations. The equity ratio is 62.4% and the net asset value of the company remains stable compared to the same period last year at CHF 293.4 million.
Last year, Pax Anlage simplified its Group structure, sold its 51% stake in Sonnenhof Immobilien AG and began examining alternative courses of action for the construction projects in Grenchen, Gerlafingen and Reinach, which were halted in 2015. At the same time, projects assessed as non-strategic were sold. In addition, Pax Anlage transferred all residential properties suitable as investment properties from development to the investment portfolio. In addition, measures were taken to intensify the marketing of the completed condominium units.
Declining results in the divisions
The result in the investment properties segment fell by 34.3% year-on-year to CHF 2.1 million. According to Pax Anlage, this is due to the fact that properties were sold in the previous year and direct rental expenses increased in the reporting period. The gross yield generated amounted to 6.2 percent as at the balance sheet date (December 31, 2015: 6.7%).
The vacancy rate rose significantly compared to the end of the previous year to 18.2% (December 31, 2015: 8.1%). This was due to the addition of a property in Schönenwerd, the initial letting of which has not yet been completed.
The portfolio of existing properties has increased by 69.3% to a market value of CHF 151.5 million (including assets under construction) since the end of the year due to acquisitions and revaluations.
In the development properties segment, Pax Anlage achieved a result of CHF 1.5 million (prior-year period: CHF 5.1 million). Overall, the portfolio of unsold condominiums fell from 727 to 437 units in the first half of the year. However, the marketing of condominiums has become more challenging due to the high supply and increased financing requirements, according to Pax Anlage. The Group expects significantly increased pressure on project margins.
Property management generated slightly lower fee income than in the same period of the previous year due to lower volumes. Pax Verwaltungen AG generated a segment result of CHF 700,000 (prior-year period: CHF 800,000).
Portfolio to reach CHF 700 million
In the medium term, the Pax Anlage Group plans to build up a real estate portfolio in the region of CHF 700 million with an equity ratio of at least 40 percent. This should comprise at least 80 percent existing properties and consist of half residential properties and half commercial properties. The geographical focus will be on the main transport axes in the central Swiss-German plateau. The targeted growth is to be achieved through the company's own development, but primarily through acquisitions.
For the 2016 financial year, the company anticipates a profit that will be below that of the previous year but significantly above that of the first half of 2016. (ah)
