Zug Estates: Portfolio market value rises to 1.34 billion
In the first half of 2017, Zug Estates Group increased its property income by 5.4 percent year-on-year to CHF 20.8 million. The portfolio market value also increased significantly.
Zug Estates achieved an operating result before depreciation and revaluation of 19.6 million in the first six months. Compared with the same period last year, this represents an increase of 0.9 percent. Group profit excluding revaluation increased by 7.9 percent to 13.0 million in the first half. At 11.6 million, the Group's operating expenses in the first half of the year were 7.5 percent higher than in the previous year as a result of pre-investments in future portfolio growth.
Vacancy rate falls to 1.4 percent
The Group invested a total of 49.7 million in the further development of its sites in the first half of 2017. In addition, the balance sheet value of the investment properties increased by a net amount of 7.2 (previous year: 14.4) million due to the revaluation. "Above-average location and property qualities as well as the continuous further development and positioning of the Suurstoffi site" contributed to the revaluation success, writes Immobilien-AG in a media release. As part of the portfolio streamlining, Zug Estates sold two properties in Baar, generating a profit of 1.0 million.
To finance the further portfolio expansion, a 0.7 percent bond with a term until 2022 and a volume of 100 million was issued in January 2017. Due to the lower revaluation gain, EBIT of 26.1 million and net income of 20.0 million were below the corresponding prior-year figures. However, the market value of the portfolio increased by four percent in the first half of 2017 and now stood at 1.34 billion as of the reporting date. In addition, the vacancy rate of the portfolio decreased again and stood at 1.4 percent as of June 30, 2017, compared with 1.8 percent (December 31, 2016) and 4.2 percent (June 30, 2016).
Two more buildings planned at Suurstoffi
According to the company, construction of the third stage of realization, i.e. buildings S16, S18 and S20 on the Suurstoffi site in Risch Rotkreuz, is proceeding according to plan. Completion and staged handover to tenants will begin in the fourth quarter of 2017 and be completed in the first quarter of 2018. The investment volume for the 11,331 sqm of commercial space and 152 apartments is around 110 million. The main tenants are the car-sharing provider Mobility and the market research institute GfK. The current occupancy rate for the apartments is 100 percent, and 76 percent for the commercial space. Due to the continuing good demand for commercial space, it has been decided to trigger planning for the remaining two buildings in the Suurstoffi (S43 and S45), says Zug Estates.
