Allreal: Half-year result slightly below previous year
The Allreal Group reports net profit including revaluation effect of CHF 66 million for the first half of 2017. This is 5.4 percent below the result for the same period of the previous year, which was, however, strongly influenced by profits from the sale of development properties, according to the company.
According to Allreal, the "solid" result was due in particular to the good real estate result, profits from the realization of projects for third parties and the company's own portfolio as well as lower financing costs.
The two business areas Real Estate and Projects & Development generated a total operating result of 59.3 million in the reporting period.
Real Estate division: higher rental income and low vacancy rate
In the Real Estate business division, rental income rose by 1.2% to 87.5 million in the reporting period, although four commercial properties were sold in the first half of 2016. The vacancy rate fell further to 2.9%.
The division's operating result in the reporting period amounted to 72.5 million (excl. revaluation), 5.8% less than in the same period of the previous year. Net profit (excl. revaluation) amounted to 50.2 million, which corresponds to 82.4% of the Group's operating profit.
Portfolio value reaches 3.59 billion
With regard to investment properties, the fully let commercial property at Grindelstrasse 3/5 in Bassersdorf (ZH) was disposed of in the reporting period by reclassification to development reserves. The merger with an undeveloped, 6,000 sqm neighboring property, which has been reported in the balance sheet as a development reserve since 2008, increases the property area earmarked for project development to around 12,000 sqm. As at June 30, 2017, the portfolio therefore comprised 20 residential and 38 commercial properties.
The portfolio of investment properties under construction remained unchanged in the first half of 2017. The two projects with a total investment volume of 113 million and a target annual rental income of 6.7 million are the fully let commercial building on Schiffbauplatz in Zurich-West and the Fangletenstrasse residential development in Bülach (ZH). Both properties are to be transferred to the portfolio of investment properties after completion in the second half of 2017 and the second half of 2018 respectively.
The valuation of the investment and investment properties carried out by the external property valuer as at June 30, 2017 resulted in an overall positive value adjustment before taxes of 8.7 million. Of this amount, 4.7 million was attributable to the investment properties. As at the reporting date, the total value of the portfolio amounted to 3.59 billion.
Projects & Development: result below previous year
The Projects & Development division achieved a profit of 37.4 million in the first half of 2017. As expected, the result was down on the previous year's figure because profits from the sale of development properties were significantly lower than in the first half of 2016 at 8.6 million, according to Allreal. At that time, the major "Guggach" project in Zurich Unterstrass had been sold.
At 14.5 million, the business division's operating result (EBIT) was also below the previous year's figure, despite a reduction in operating expenses. Net income (excl. revaluation effect) amounted to 10.7 million, which corresponds to 17.6% of the Group's operating net income.
The project volume handled by the Realization division in the first half of 2017 amounted to 203.8 million. Of this, 163.8 million was attributable to projects for third parties, 10.9 million to development projects for sale to third parties and 29.1 million to projects for the division's own portfolio in the first half of the year. The share of new construction projects was 72.4% and that of renovation and conversion projects 27.6%.
In the reporting period, all construction areas on the Bülachguss site in Bülach-Nord, which was formerly used for industrial purposes, became legally binding. The purchase agreements concluded with an institutional investor were also completed. The start of construction on the major project with 490 rental and owner-occupied apartments will lead to an increase in the project volume completed, Allreal writes in a press release.
For the 2017 financial year, the company expects its operating result to be slightly below that of the previous year.
