Plazza feels little of the pandemic
Plazza reports an increase in both operating income before depreciation and revaluation and profit for the first half of 2020. Due to its focus on residential properties in the mid-price segment, the coronavirus crisis has only had a marginal impact so far.
At 9.5 million, the operating result before depreciation, amortization and revaluation is slightly higher than the previous year (9.2 million). Profit increased significantly from 14.2 million in the previous year to 21.8 million. According to Plazza, this was due to market-related factors and high revaluation gains (18.7 million after 9.7 million in the previous year). Income from real estate amounted to 12.3 million (previous year: 12.2 million).
For 2020 as a whole, the real estate company expects an operating result before depreciation, amortization and revaluation in line with the previous year.
Unbroken demand for apartments
Plazza is experiencing unbroken demand for well-positioned residential properties. The falling yield expectations of real estate investors would lead to falling discount rates and consequently to higher valuations. Around 75% of Plazza's rental income comes from the residential segment. As at the end of June, the vacancy rate there amounted to 3.1% (previous year: 3.2%) and is attributable to the last commercial space in a residential property in Wallisellen as well as unlet parking spaces and ancillary areas.
Plazza continues to report a stable rental situation for commercial properties. Overall, rental income from commercial properties accounts for a share of EUR 231,000 thousand of rental income. The vacancy rate in this segment amounted to 6.3% as at the reporting date (previous year: 6.4%). According to the company, however, it could become more challenging to let space whose rental agreements are due to expire in the next twelve to 24 months.
The planning application for the first stage of the development projects in Crissier near Lausanne was submitted at the end of May 2020. This stage comprises around two thirds of the project with an investment volume of up to 220 million. The building permit is not expected before the end of 2020; construction is scheduled to begin in the second half of next year.
The project in Regensdorf (ZH) will be realized in four to seven years at the earliest, Plazza added. A new quarter is to be created on a former industrial area north of the railroad station; Plazza owns development land for residential and services on one of the sub-areas. A study contract with five architectural firms is currently underway. (ah)
