Fundamenta: Earnings and profit increase
Fundamenta Real Estate AG increased its net profit by seven percent to CHF 5.61 million in the first half of 2017. Real estate income increased by twelve percent to CHF 10.41 million.
Of the rental income of 10.41 million (previous year: 9.28 million), 92% came from residential use. Fundamenta reports that its investments continue to focus on the mid-rent segment. Of the rental apartments held in the company's portfolio as at June 30, 2017, 96% have a net rent of less than CHF 2,000/month.
The vacancy rate of the real estate portfolio, including temporary vacancies due to renovations and conversions, fell from 7.3% in the same period of the previous year to 5.4%. The market-related vacancy rate, i.e. excluding vacancies due to ongoing repositioning, amounted to 4.2% as at the reporting date (previous year: 5.9%). According to the company, vacancy rates for existing properties within the initial letting cycle have fallen from 3.9% in the same period of the previous year to 0.9%.
The review and valuation of selected existing properties and the initial valuation of the completed new construction project in Winterthur by JLL led to a valuation gain before deferred taxes of 2.26 million (previous year: 2.47 million). Net profit rose from 5.24 million in the previous year to 5.61 million. Operating net profit (excluding revaluation effect) increased from 3.27 million to 3.81 million.
Portfolio grows
In the reporting period, Fundamenta Real Estate acquired three existing properties and development projects in central locations. Individual properties in the portfolio are also being developed. The property on Zentralstrasse in Zurich is currently being repositioned, and other corresponding projects are in the preparation or planning phase.
The new construction project in Winterthur was completed earlier than planned and was added to the portfolio on June 1, 2017 with a "high marketing status", Fundamenta continued. Planning is also underway for development projects in the city of Zurich and in Schlieren. The real estate portfolio (including the development/new-build projects in Hinwil, Zurich and Schlieren) comprises a total of 49 properties with 1,399 residential units and an expected annual net target rental income of around 26.10 million.
Second half-year: project in Zurich nearing completion, capital increase planned
The repositioning and reletting of the property on Zentralstrasse in Zurich should be completed on schedule towards the end of the current financial year. The new construction project in Hinwil was completed in July 2017 and was almost fully let on August 1, 2017 and transferred to the existing portfolio earlier than planned at a market value of 22.11 million.
The Board of Directors of Fundamenta Real Estate has decided to carry out a capital increase "due to the positive past performance and the current sustained demand for investment opportunities in Swiss residential real estate". Details will be communicated at a later date. However, Zürcher Kantonalbank has already been nominated as lead manager and Fundamenta Group (Schweiz) AG will act as sole selling agent for the transaction.
