Allreal: Record result thanks to revaluation gains
In the 2016 financial year, Allreal achieved a net profit including revaluation effect of CHF 173.6 million. This is the highest profit in the company's history, Allreal reports.
Allreal cites the good performance of its two business segments, Real Estate and General Contracting, as well as the significant positive value adjustment of the portfolio as reasons for the record result.
The corporate result excluding revaluation effect amounted to CHF 112.2 million. Income from the rental and management of investment properties, together with the project volume handled, resulted in total operating performance of 671.7 million.
For the financial year 2017, the company expects an operating result slightly below that of the reporting period.
Vacancy rate declines
In the Real Estate Business Area, the downsizing of the portfolio in the reporting period led to a slight decrease in rental income of 0.9 percent to 173.3 million, despite lower vacancy rates. As a result of numerous new rental agreements and the stable situation with existing tenancies, the cumulative vacancy rate fell from 7.5 to 5.1 percent.
The completion of major refurbishment projects in the previous year led to a reduction in real estate expenses by 4.1 percentage points to 14.1 percent in the reporting period. The reduction in vacancy-related income losses and the lower real estate expenses resulted in a net return of 4.4 percent.
In the reporting period, the investment property portfolio recorded one addition through reclassification and four disposals through sale. As of the reporting date, the portfolio thus comprised 20 residential and 39 commercial properties. The market value at the reporting date was 3.57 billion, and the positive change in value was 85 million.
General contracting: EBIT rises by almost 60 percent
Earnings in the general contracting business segment amounted to 84 million, 6.6 percent more than in the previous year. According to Allreal, the figure was largely influenced by profits from the sale of development properties. Due to the higher profit from operating activities and lower operating expenses, the operating result (EBIT) rose by 59.3 percent to 34.4 million.
According to Allreal, an "important milestone" in the Project Development division was the handover of the Bülachguss site development to the Realization division. In addition, a large part of the development was sold to an institutional investor during the reporting period.
The project volume handled by the Realization division amounted to 493.7 million, 19.4 percent less than in the previous year. The share of third-party projects was 84 percent and that of in-house projects 16 percent. However, with the start of construction of the major project in Bülach in October 2016, the share of own projects will increase again in the medium term, according to Allreal.
