Plazza halves vacancy rate and increases property income
The real estate company Plazza AG was able to halve the vacancy rate of its portfolio properties in the 2017 financial year. Real estate income increased slightly compared to the previous year, but profit declined.
As Plazza reports, the vacancy rate across all portfolio properties fell to 8.3 percent in the reporting period. In the previous year, the figure was more than twice as high at 16.9 percent. While the vacancy rate in the residential segment was just 2.2 percent (previous year: 2.1%), 19.5 percent of the commercial space in Plazza's portfolio was vacant. In the previous year, the figure was as high as 44.9 percent.
Some of the newly concluded rental contracts had already been recognized in the income statement during the reporting period, thus increasing rental income from CHF 14.8 million in the previous year to CHF 15.7 million. 60 percent of the real estate income comes from residential properties, 16 percent is generated with commercial properties.
At 5.4 million, operating expenses were on a par with the previous year (5.5 million). Operating profit before depreciation, amortization and revaluation increased by 10.3 percent to 10.7 million (previous year: 9.7 million). At 10.4 million, income from revaluation was lower than in the previous year (15.0 million). As a result, the profit recorded by Plazza of 17.0 million was slightly lower than in the previous year, when the company reported a profit of 19.5 million.
Investments of more than CHF 44 million
In fiscal 2017, Plazza invested 44.2 million (previous year: 24.5 million), most of it in development projects. The portfolio value increased by 54.6 million to 590.6 million in the reporting period (previous year: 536.0 million).
Plazza currently has three development projects: in Wallisellen, Crissier and Regensdorf. In Crissier, construction of the first stage will not begin until 2020 at the earliest, while realization of the project in Regensdorf is not expected for five to eight years at the earliest, according to Plazza. At the end of December 2017, a good 60 percent of the 218 apartments in the "Im Glattgarten" development in Wallisellen had been let; occupancy will be staggered from the beginning of June 2018.
For the 2018 financial year, Plazza expects an increase in real estate income of around a quarter, partly due to rental income from the "Im Glattgarten" development, which will start to accrue in mid-2018, and a reduction in the vacancy rate for commercial space. Profit before revaluation is expected to increase by around one-third in 2018 compared with 2017. The profit from revaluation should also reach at least the magnitude of 2017 due to the progress of the projects, according to Plazza.
The dividend is to increase from CHF 3.00 to CHF 4.00 per class A registered share and from CHF 0.60 to CHF 0.80 per class B registered share.
