Espace Real Estate: Profit and real estate income increase
Espace Real Estate Holding posted a profit of CHF 11.95 million in the 2017 financial year, up CHF 0.26 million or 2.2 percent on the previous year. At that time, the company made a profit of 11.69 million.
According to the company, the reasons for the profit increase were higher rental income and lower financial expenses in the favorable interest rate environment.
Rental income increased by 0.5 million due to the new buildings, but income of 0.9 million was lost due to property sales in the previous year. As a result, rental income decreased by 0.4 million. At the same time, however, the strategy of rejuvenating and modernizing the portfolio has taken effect, Espace reports: Real estate expenses decreased significantly by 12.5 percent or 0.9 million. The bottom line is that rental income increased by 0.5 million (+1.7%) to 25.8 million compared to the previous year.
In total, Espace invested 28.4 million in new buildings and renovations. Due to the acquisitions and investments and despite the negative valuation effect, the market value of the properties increased by 15.6 to 639.9 million (+2.5%). The revaluation effect in the reporting period was -1.3 million compared to -0.8 million in the previous year.
Espace generates just under 35 percent of its total income from residential real estate. This share has been steadily increased in recent years and is expected to grow even further. However, the company also wants to take advantage of opportunities in commercial properties. For example, Espace intends to develop the commercial site on Nordstrasse in Luterbach into a "campus.
The vacancy rate for investment properties fell slightly to 9.9 percent (previous year: 10.1%). The figure also includes vacancies at those properties where refurbishment or sale is planned. The small reduction in vacancy compared to the previous year was due to the fact that some expired leases of commercial space could not be renewed until mid-2018, the company said.
Shareholders' equity amounted to CHF 298.1 million or CHF 154.40 per share at the end of 2017. The equity ratio is 44.8 percent.
The Board of Directors proposes to the Annual General Meeting on May 17, 2018, the distribution of an increased dividend from capital contribution reserves of CHF 4.75 per share.
