Fundamenta Real Estate grows operationally

Fundamenta Real Estate AG reports that net rental income increased by CHF13.3% from CHF14.28 million to CHF16.19 million in the 2020 financial half-year. The main reasons for the increase were the five existing properties acquired in the previous year, developments in the portfolio and the acquisition of the fully leased development project Geibelstrasse in Zurich. 93.8% of the rental income comes from residential use. The vacancy rate is put at 3.9%.

Net operating profit excluding the revaluation effect reportedly increased byTP14.112T to7.54 million (previous year:6.61 million). However, in the previous year, a one-off effect triggered by the tax reform and AHV funding (STAF) had a positive impact of 0.75 million. Adjusted for this one-off effect, the plus was even 28.7%.

According to Fundamenta, the valuation of about one third of the existing properties as well as development projects, which are accounted for at market value due to the project status, resulted in a revaluation gain (before deferred taxes) of 2.48 million compared to 4.34 million. Due to this reduced valuation gain as well as the one-off effect, profit including revaluation decreased by 13.0% from 10.09 million to 8.78 million compared to the previous year.

Covid-19 has little effect

According to Dr. Andreas Spahni, Chairman and Delegate of the Board of Directors, the Corona pandemic had "only a very marginal" impact on the half-year results. While rental income from residential use had proved resistant to the crisis, some commercial tenants with a share of 6.2% of the net target rental income had been affected by the pandemic, especially in the retail trade with non-food products and in gastronomy. Discussions are being held with these tenants. Based on the status of negotiations at the end of June 2020, Fundamenta has recognized a provision of 0.13 million.

At the end of the reporting period, the real estate company held a portfolio with a balance sheet value of 928.69 million in its portfolio - up from 908.91 million in 2019. The increase was due to the acquisition of a development project, the completion and transfer of the Geibelstrasse new construction project in Zurich to the portfolio, the construction or project progress of ongoing development projects, and the revaluation of part of the portfolio as of the balance sheet date, Fundamenta said. The value of the existing portfolio increased from 841.22 million to 875.89 million during the period. Annual net target rental income increased from 33.73 million to 35.81 million.

Fundamenta expects the portfolio to continue its solid development in terms of income and profit in the second half of the year. As of July 1, the company acquired a residential property in Niederweningen (ZH) with 31 residential units and an investment volume (acquisition valuation) of 22.13 million. The development and repositioning projects are on track: the new construction project on Steinwiesenstrasse in Schlieren, the courtyard superstructure on Delsbergerallee in Basel and the total renovation on Güterstrasse in Basel are scheduled for completion in the fourth quarter.