Swiss Prime Site: Operating income at record level, profit declines

In the 2016 financial year, Swiss Prime Site increased its operating income by 5.5 percent year-on-year to CHF 1.05 billion. The Real Estate segment generated income of CHF 546.4 million - compared with CHF 656.8 million in the previous year. This decline can be explained in particular by the additional income generated in 2015 from the sale of condominiums amounting to 105.1 million, Swiss Prime Site reports.

Real estate revaluations resulted in a gain of 60.5 million. In the previous year, the figure was 124.6 million.

In the Life and Housing for the Elderly business segment, Swiss Prime Site increased income by around 70 percent year-on-year to 406 million as a result of acquisitions. Jelmoli - The House of Brands was able to keep operating income stable at 151.7 million. Income from services provided to Swiss Prime Investment Foundation increased from 7.9 to 13.2 million.

Decline in EBIT and net income

At operating profit (EBIT) level, Swiss Prime Site generated 459.8 million - compared with 553.4 million in the previous year. The difference compared to the previous year is made up of gains from the sale of condominiums ("Maaghome") and from the transfer of a real estate package at a price of 411.5 million to the investment foundation, as well as higher revaluations in the real estate segment, Swiss Prime Site said.

Net profit in the past fiscal year amounted to 311.2 million, compared with 355.1 million in the previous year. Excluding revaluations and deferred taxes, profit increased by 1.4 percent to 284.8 million.

The equity ratio was 46.6 percent at the end of 2016 (previous year 46.4%). The net asset value increased to CHF 72.43 per share (+1.8%). The return on equity declined from 7.6 to 6.1 percent, but is within the long-term target range, according to the company.

Vacancy rate falls thanks to new lettings

Swiss Prime Site made five acquisitions worth 250.2 million and three divestments (59.9 million) in 2016. This represents a net increase of two in the portfolio to 184 properties. Rental income increased by 1.6 percent compared with the previous year.

70,000 sqm were newly leased, thus reducing the vacancy rate from 6.5 to 5.9 percent. At Group level, the vacancy rate fell to 6.1 percent (previous year: 6.7%).

Wincasa's income from real estate services increased to 115.7 million (+5.7%) due to mandates won. The real estate assets of Swiss Prime Investment Foundation managed by Swiss Prime Site grew to CHF 1.1 billion in the first financial year.

In the current financial year, Swiss Prime Site intends to further reduce the vacancy rate, with a target of 5.5 to 6.0 percent. In the future, the Real Estate business segment is to focus even more on project developments, conversions and modernizations of the existing real estate portfolio. For the 2017 financial year, Swiss Prime Site expects an increase in both revenue and operating profit before revaluations compared with 2016.

Peter Lehmann, previously Chief Investment Officer of the Group, is newly appointed CEO of Swiss Prime Site Immobilien AG.