PSP Swiss Property: Profit increase in the first quarter
PSP Swiss Property reports a profit (excluding gains/losses on real estate investments) of CHF 50.5 million for the first quarter of the current financial year. This is approximately 17% more than in the same period of the previous year.
According to PSP Swiss Property, the balance sheet value of the entire portfolio was CHF 7.682 billion at the end of March, compared to CHF 7.442 billion at the end of 2018. At the beginning of the year, the real estate company acquired several properties in Bern's city center and in Bern-Liebefeldproperties in Zurich-Altstetten and in Fribourg were also sold. The last condominium on the Löwenbräu site in Zurich was also sold during the reporting period.
The vacancy rate decreased from 5.0% at the end of 2018 to 4.4 % at the end of March 2019. This was due to several new leases and the sales of the properties in Zurich-Altstetten and Fribourg, PSP Swiss Property said. Of the total vacancy, 1.1 percentage points were due to ongoing refurbishment work, it said.
Of the leases expiring in 2019, valued at 31 mill, 79% had been renewed as of the end of March, the real estate company added. The WAULT (weighted average unexpired lease term) of the overall portfolio was 4.5 years. The WAULT of the ten largest tenants, which account for about 30% of rental income, was 6.5 years.
Profit increase thanks to higher rental income
PSP Swiss Property put net income (excluding gains/losses on real estate investments) at 50.5 million, up from 43.2 million in the first quarter of 2018. The increase of 7.3 million, or 16.9%, compared to the same period last year resulted primarily from higher rental income (+3.3 million) and a higher gain on the sale of condominiums (+1.0 million), the company added. Lower financing costs and a lower tax burden also contributed to the improvement in results, it added.
Net income (including gains/losses on real estate investments) increased even more significantly: It amounted to 79.7 million in the first quarter of 2019, compared with 40.3 million in the prior-year period. The increase of 39.5 million was mainly due to a portfolio revaluation of 19.7 million. Of this, 7.5 million was attributable to the initial valuation of the properties acquired in Bern and 12.3 million to the Rue du Marché development project in Geneva. In addition, there was a gain of 15 million from the sale of two investment properties.
For the full financial year 2019, PSP Swiss Property expects Ebitda (excluding gains/losses on real estate investments) of 250 million compared to 241.7 million in the previous year. The vacancy rate is expected to be 4.5% at the end of 2019. Previously, the company had forecast a vacancy rate below 5.0%. (ah)
