Jump in profits at PSP Swiss Property
PSP Swiss Property achieved a net profit of CHF 258.8 million in the first half of 2019. This is 100.5 million or 63.5% more than in the same period of the previous year.
Net income excluding gains/losses on real estate investments increased from 85.6 to 115.3 million - an increase of 34.7% compared to the same period last year. According to PSP Swiss Property, higher rental income (+6.3 million), more profit from the sale of condominiums (+1.1 million), lower operating expenses (-1.4 million) and lower financing costs (-1.5 million) contributed to the improved result. The release of deferred taxes also had a positive impact of 21.6 million.
Earnings per share excluding gains/losses on real estate investments, which form the basis for the dividend payment, amounted to CHF 2.51, compared with CHF 1.87 in the first half of 2018.
Jump in profit thanks to revaluation
Thanks mainly to a portfolio appreciation of 124.7 million (previous year: 91.5 million), net income rose to 258.8 million. In addition, there was a gain of 15.0 million from the sale of two investment properties. The reversal of deferred taxes resulted in tax income of 5.1 million.
The balance sheet value of PSP Swiss Property's entire portfolio was 7.82 billion at the end of June, up from 7.44 billion at the end of 2018. At the beginning of the year, the company acquired several properties in Bern's city center and in Bern-Liebefeld. Two properties - one in Zurich-Altstetten and one in Fribourg - have been sold. Two project developments were completed and the properties at Rue Saint-Martin 7 in Lausanne and Hardturmstrasse 161/Förrlibuckstrasse 150 in Zurich-West were reclassified to the investment portfolio.
Vacancy rate falls to 4%
In the first half of 2019, the vacancy rate decreased from 5.0% at the end of 2018 to 4.0 % thanks to several new leases and the sales of the properties in Zurich-Altstetten and Fribourg. Of the total vacancy, one percentage point was due to ongoing refurbishment work, PSP Swiss Property said. Of the 31.0 million worth of leases expiring in 2019, 87% had been renewed as of the end of June, it said. The wault (weighted average unexpired lease term) of the overall portfolio was 4.5 years. The Wault of the ten largest tenants, contributing around 30% of rental income, was 6.2 years.
For the financial year 2019, PSP Swiss Property is optimistic and increases its forecasts. Good demand for office space in central and easily accessible locations is expected, and the market for retail space in good locations is also stable. The company now expects higher Ebitda excluding gains/losses on real estate investments of more than 250 million (previously: 250 million; 2018: 241.7 million). The vacancy rate is expected to be around 4% at the end of 2019. Previously, the company had expected a vacancy rate of 4.5%. (ah)
