Plazza: Revenue and profit increase
Plazza, the listed real estate company, reports an increase in rental income and operating profit for the first half of the year. Profit also increased significantly.
Rental income rose from 7.7 to 8.8 million in the first half of 2018 compared with the previous year - an increase of 13 percent. At 2.8 million, operating expenses were slightly above the previous year's figure of 2.7 million. As a result, operating profit before depreciation, amortization and revaluation climbed 18 percent to 6.1 million (previous year: 5.2 million). Profit was 11.5 million, compared to 7.8 million in the previous year. The reason for the plus was a larger profit from revaluation of 9.1 million (previous year: 4.9 million), Plazza reports.
During the reporting period, the real estate company invested CHF 16 million, most of which was invested in the Im Glattgarten property in Wallisellen. The portfolio value increased by 25.2 to 615.8 million (previous year: 590.6 million).
As of June 30, 2018, around 95 percent of the apartments in Im Glattgarten had been leased, Plazza reports. The vacancy rate in this segment jumped from 2.2 to 17.5 percent. This was due to the fact that some of the new leases in Wallisellen did not come into effect until after July 1, 2018, due to the staggered occupancy of apartments, the company said. By the end of the year, Plazza expects vacancy rates to be back in the low single digits. At the time of the adoption of the half-year report, the vacancy rate in the residential segment had already fallen well below ten percent, it said. Measured in terms of target net rental income, the completion of the Im Glattgarten property will increase the share of residential properties from around 62 to 73 percent.
In the commercial space segment, Plazza was able to reduce the vacancy rate from 19.5 to 12.7 percent. A further reduction is on the horizon for the second half of the year, as full occupancy was achieved again after the balance sheet date for one of the two office buildings in Zurich Wiedikon, the company said.
Planning continues for projects in Crissier and Regensdorf
The preliminary project for a development site in Crissier near Lausanne is now available, and exploratory talks are underway on the possible involvement of third-party investors. Planning of the construction project could probably begin in 2019, with construction starting at the end of 2020 at the earliest.
The realization of a project in Regensdorf can be expected in five to eight years at the earliest, Plazza adds. A new quarter is to be built on the former industrial area north of the train station; Plazza owns development sites for housing and services on one of the subareas.
For 2018 as a whole, Plazza expects an increase in property income of around 25 percent, mainly due to the newly added rental income from the Im Glattgarten property in Wallisellen and the reduction in vacancy rates for commercial space. Profit before revaluation will increase by around one third compared to 2017, the real estate company forecasts. The profit from revaluation will also reach at least the level of the previous year due to the progress of the project. (ah)
