SPS Swiss Prime Site: More profit in the Corona year too
Swiss Prime AG also felt the economic consequences of the Covid 19 pandemic in the 2020 financial year. Nevertheless, thanks to positive one-off effects, net profit was up sharply.
Despite the challenging situation in the Corona year, Switzerland's largest real estate company was able to achieve many of its targeted goals. For example, Swiss Prime Site AG increased its net profit to CHF 476.6 million in the 2020 financial year - compared with CHF 315.7 million in the previous year. The increase is mainly due to the sale of the Tertianum Group in the reporting period.
Swiss Prime Site reports operating income of 792.9 million (previous year: 1,258.8 million); management attributes the deviation to the sale and deconsolidation of the Group company Tertianum as of February 28, 2020.
Operating profit (EBIT) amounted to 762.3 million (previous year: 628.3 million), with the sharp increase (+21.3%) compared to the previous year being due to the sale of Tertianum in the amount of 204.2 million. The core real estate business generated EBIT of 555.0 million (PY: 572.9 million); this includes 203.4 million in revaluation gains on the real estate portfolio with a fair value of 12.3 billion (PY: 11.8 billion).
Net property yield reaches 3.2%
In the Real Estate segment, rental income decreased slightly to 431.0 million (-1.4%); according to the company, this includes a 12.7 million reduction in income due to the impact of the Corona pandemic, among other things, the sales and parking rental income collected was lower than planned at around 4 million and rent waivers of around 9 million were granted.
Despite a challenging market, the company said it had managed to reduce the portfolio vacancy rate, which had risen to 5.4% in H1 2020, back to 5.1% (+4.7%). The real estate portfolio grew by 557.2 million to 12.3 billion (+4.7%), with the increase attributed to revaluation gains and completions of owned developments. At 3.2% (PY: 3.5%), the company considers the net property yield generated on the real estate portfolio to be at an attractive level in the market for prime properties.
Overall, Swiss Prime Site was able to increase the equity ratio to 47.8% (previous year: 44.4%) in the reporting period, reduce debt and thus significantly strengthen the balance sheet. The Board of Directors proposes to the Annual General Meeting (23.3.21) a distribution of CHF 3.35/share (previous year: CHF 3.80/share).
Positive outlook
For the financial year 2021 and beyond, the management of Swiss Prime Site assumes that the market opportunities for office space will remain intact. This assessment for Switzerland is based on the shortest commuting times in Europe, an occupancy rate for office space that has already been adapted to new working models before the pandemic, and the need for more distance and general space.
The situation for retail uses remains challenging - however, Swiss Prime Site assumes that stationary retail will continue to be in demand in good locations, and the company's retail space portfolio is primarily located in premium locations. Swiss Prime Site expects an increase in rental income in the 2021 financial year due to the development projects completed in the previous year, most of which are fully let - subject to unforeseeable distortions in connection with the Corona pandemic. (bw)
