Intershop: Real estate income increases, profit decreases

Intershop Holding AG's net profit of 29.4 million is 6.5 percent below the result for the same period of the previous year, which was, however, characterized by a one-off effect, the company announced. Thanks to income from the World Trade Center, real estate income rose by 5.6 percent to 44 million, despite the sale of two investment properties in the second half of the previous year.

Intershop Holding's equity (as at 30.06.2017) amounted to CHF 585 million, or CHF 292 per share, which corresponds to an equity ratio of 41.7%. The return on equity amounted to 10.1%.

Portfolio reaches market value of around 1.4 billion

On the balance sheet date, the portfolio comprised 57 properties (including development and promotion projects) with a rentable area of around 590,000 sqm. During the reporting period, 50% of rental income was generated from office and education, 30% from commercial and logistics, 6% from retail and gastronomy and 14% from residential and parking. The market value of the properties amounted to 1.36 billion at the end of the reporting period, increasing marginally by 0.1 million after deduction of the investments made.

The yield portfolio generates a gross yield of 6.3 percent and a net yield of 5.5 percent.

During the reporting period, Intershop sold a small commercial property in Winterthur. Together with the sale of two underground parking spaces, this resulted in a profit of 1.1 million. No acquisitions were made; according to the company, it focused on developing its own portfolio and on new rentals and re-letting. The vacancy rate was 10.2% on the reporting date.

Purchase agreements for "eden7" notarized

Intershop also reports that all purchase agreements for the condominiums in the "eden7" project were notarized during the reporting period. Construction work on this project is proceeding according to plan. While the planning application for the "Albanteich-Promenade" site in Basel has been further developed, the "AuPark" design plan is still being examined by the authorities, according to the company. Discussions with the canton of Zurich regarding the location of the "Zimmerberg secondary school" are ongoing. At the same time, preparatory work is underway on the renovation and extension of the property on Rue de Lausanne in Geneva and the comprehensive renovation of a building on the commercial site in Flurlingen.

Intershop expects the vacancy rate for investment properties to rise slightly in the second half of the year to a level roughly on a par with the previous year. In the 2016 financial year, Intershop reported a vacancy rate of 11.3%.

According to Immobilien-AG, residential real estate income will continue to fall slightly as a result of the lower reference interest rate, as will financing costs due to restructuring measures already taken. The current tenant is expected to purchase the property in Moosseedorf in October of this year.