PSP Swiss Property with significant profit increase
PSP Swiss Property reports net income excluding gains/losses on real estate investments of CHF 215.2 million for the 2019 financial year, around 22% more than in the previous year. The dividend is expected to increase to CHF 3.60.
Ebitda excluding gains/losses on real estate investments was within expectations at CHF 256.1 million, PSP Swiss Property reports.
The balance sheet value of the portfolio at the end of 2019 was around 7.98 billion, compared with 7.44 billion in the previous year. The real estate company acquired several properties in downtown Bern and in Bern-Liebefeld and sold two properties in return: one in Zurich-Altstetten and one in Fribourg. Two development projects in Lausanne and Zurich-West were completed and reclassified to the investment portfolio.
The vacancy rate fell from 5.0% to 3.5 % within a year. This was due to several new leases and the sale of the two properties in Zurich-Altstetten and Fribourg. According to PSP Swiss Property, 0.7 percentage points of the total vacancy rate are due to ongoing renovation work. Of the 31.7 million worth of leases expiring in 2020, 85% had already been renewed as of the end of 2019, it said. The Wault (weighted average unexpired lease term) of the overall portfolio was 4.2 years. The wault of the ten largest tenants, which contribute around 30% of rental income, was 5.7 years.
Profit rises significantly
At 215.2 million, net income excluding gains/losses on real estate investments was 39 million orTP2T 22.11 higher than the previous year (176.2 million). A large part of the increase (22.1 million) was due to the extraordinary release of deferred taxes, which was related to the reduction of income tax rates in several cantons. Operationally, higher rental income (+11.1 million), increased proceeds from the sale of project developments and condominiums (+2.4 million), lower operating expenses (-1.2 million) and lower financing costs (-2.9 million) contributed to the improved results, according to PSP Swiss Property. Earnings per share excluding gains/losses on real estate investments amounted to CHF 4.69, compared to CHF 3.84 in the previous year.
Net profit climbed from 308.2 to 453.4 million, an increase of 145.3 million or 47.1%. The main reason was the portfolio appreciation of 244.2 million (2018: 166.7 million) and the reversal of deferred taxes. 15 million gain resulted from the sale of two investment properties (2018: 2.5 million).
As of the end of 2019, equity per share (net asset value; NAV) amounted to CHF 97.02, compared with CHF 90.63 in the previous year. NAV before deduction of deferred taxes amounted to CHF 115.82 (end of 2018: CHF 109.20).
Dividend to rise
The Board of Directors proposes an increased ordinary dividend payment of CHF 3.60 per share for the 2019 financial year (previous year: 3.50). In relation to earnings excluding gains/losses on real estate investments, this amount corresponds to a payout ratio of 76.7%; in relation to the 2019 year-end share price of CHF 133.60, this results in a yield of 2.7%.
The election of Henrik Saxborn as a new member of the Board of Directors will be proposed to the Annual General Meeting on April 9. Saxborn (born 1964) is CEO of Castellum AB, a listed Swedish real estate company based in Gothenburg with a focus on commercial properties. All other members of the Board of Directors and Dr. Luciano Gabriel as Chairman are standing for re-election.
For the 2020 financial year, PSP Swiss Property expects Ebitda excluding gains/losses on real estate investments to exceed 260 million. Vacancy rates are expected to decrease to below 3.5%. (ah)
