Hiag back in the black
Hiag Immobilien Holding reports a consolidated profit of CHF 22.1 million for the first half of 2020. In the previous year, the company still posted a loss of 43.4 million.
According to Hiag Immobilien Holding, property income received was 29.5 million (previous year: 29.7 million), including effects due to the pandemic of 0.5 million and from an acquisition in Zurich Altstetten in the second half of 2019. Income from this property and from completed development projects would compensate for the shortfalls that occurred due to the bankruptcy of Rohner AG in Pratteln and the departure of Decathlon in Dietikon, Hiag says.
The impact of the Corona pandemic on property income collected reportedly amounted to 0.8% of annualized property income in the first half of 2020, which was 58.9 million (Dec. 31, 2019: 58.7 million). In addition, total rent waivers in the amount of 0.1 million were agreed upon and 0.4 million were recognized in profit or loss in connection with the COVID-19 business rent law under preparation for unpaid or already paid rent receivables, it added.
The vacancy rate decreased from 16.2% at the end of 2019 to 15.5%. The weighted average remaining lease term (WAULT) is 8.7 years (Dec. 31, 2019: 8.9 years). At the end of June 2020, the total portfolio consisted of 118 properties with a portfolio value of 1.62 billion (12/31/2019: 1.57 billion). During the reporting period, Hiag acquired a development site of around 22,300 sqm in the industrial area of Bussigny (VD) with potential for commercial, logistics and office uses.
Development portfolio consists of more than 60 projects
Due to new contracts and development progress, the effects from revaluations in the first half of the year would be 17.7 million, compared to -26.0 million in the previous year, Hiag further states. The negative effects of the previous year were mainly due to the bankruptcy of Rohner AG Pratteln. The weighted average discount rate for the overall portfolio decreased slightly from 3.94% (Dec. 31, 2019) to 3.90%. Overall, the real estate result was burdened by lagging operating costs for Hiag Data and the Rohner site in Pratteln totaling 6.2 million.
As of the reporting date, Hiag's development portfolio consisted of over 60 projects with a usable floor space of around 740,000 sqm. According to the company, the expected investment volume excluding further acquisitions is around 2.7 billion, of which around 2.0 billion is to be invested over the next ten years. Under construction are five fully leased projects with an annualized property income after completion of around 4.3 million, Hiag added. In addition, a further 13 development projects with a usable floor space of around 120,000 sqm and investments of around 339 million are to be realized over the next three years. The expected annualized property income after completion and full occupancy of these projects amounts to around 23.3 million, while the expected sales proceeds are around 73 million.
For the second half of the year, Hiag expects a further reduction in the vacancy rate in the existing portfolio of at least 1 percentage point. The announced goal of increasing annualized rental income for the 2020 financial year will be maintained, the real estate company said.
The operating result in the Real Estate segment in the second half of 2020 is expected to exceed the comparable figure for the first half of the year. The negative effect on the annual result from the lagging operating costs of HIAG Data and the redevelopment of the Rohner site in Pratteln is expected to be in line with expectations.
