Novavest with significant jump in profits
Novavest Real Estate reports a profit of CHF 7.2 million for the first half of the year, 70 percent more than in the previous year. EBIT increased by 64 percent to CHF 9.7 million.
According to Novavest Real Estate, earnings before interest and taxes (EBIT) increased by 64% to 9.7 million compared to the same period of the previous year (previous year: 5.9 million). Profit including revaluation gains rose from 4.2 million to 7.2 million. Profit excluding revaluation gains amounted to 4.9 million (previous year: 3.5 million), an increase of 40%. Earnings per share including revaluation amounted to CHF 1.39, or CHF 0.95 excluding revaluation gains.
The total value of Novavest Real Estate's real estate portfolio amounted to CHF 446.7 million as at June 30, 2018 (31.12.2017: CHF 458.0 million; 30.06.2017: CHF 389.1 million). Income from revaluation amounted to CHF 3.0 million (previous year: CHF 1.0 million). In the reporting period, the company sold two properties - a commercial property in Adliswil and a residential property in Teufen - for a total value of 19.1 million. According to Novavest, the gross sales prices achieved were 2.1% and 3.3% above the DCF property valuations as at December 31, 2017.
Annualized, the target rental income from the investment properties amounts to 21.0 million (previous year: 19.9 million). The proportion of rental income from residential use increased from 50% to 55% within a year as a result of the portfolio changes. Net rental income rose by 27% to 9.7 million in the 2018 reporting period, with Novavest stating that this growth was mainly due to the additional rental income from the four properties acquired in the second half of 2017. The net yield generated on the investment properties in the first half of 2018 amounted to 4.0% (previous year: 3.9%). The vacancy rate for the overall portfolio (excluding conversion projects) was 7.7% (31.12.2017: 8.7%; 30.06.2017: 6.4%).
Development project in St. Gallen
Novavest purchased two properties at Rorschacherstrasse 133 and 137 in St. Gallen for 2.6 million in the first half of the year. The building in between is already owned by the real estate company, which means that it now has the opportunity to close a gap between the two other investment properties, the residential/commercial building at Rorschacherstrasse 123, 125, 127 and the commercial building at Rorschacherstrasse 139/Helvetiastrasse 27, according to Novavest. A new three- to five-storey building is planned. The planning and approval phase for the project is expected to last until the end of 2019, with construction scheduled for spring 2020 to the end of 2021. The investment volume is estimated at 15 to 18 million.
Novavest is currently working on two conversion projects: the residential property project in Zurich (around 50 apartments with 1.5 to 3.5 rooms) is scheduled to be approved for construction in October 2018 and the new apartments are scheduled to be occupied by the end of 2020. Novavest is acquiring the residential and commercial property in Olten (43 city apartments with 2.5 to 6.5 rooms and commercial space) on a turnkey basis for around 35 million. The transfer of ownership of the property is scheduled for the end of 2018. (ah)
