Novavest Real Estate: Profit jump in the first half-year
Novavest Real Estate reports an increase in EBIT and profit of a good 30% for the first half of 2021. The reason for the growth was investments in the portfolio and positive revaluation effects.
According to Novavest Real Estate AG, the value of the real estate portfolio increased by around 3% to CHF 664.3 million in the first half of 2021 (31.12.2020: 645.4 million). Investments in investment properties and projects as well as positive revaluation effects would have contributed to this development in particular. EBIT reportedly increased by 29% to 14.5 million (H1 2020: 11.2 million), and profit including revaluation gains climbed by 30% to 10.6 million (H1 2020: 8.2 million). Profit excluding revaluation gains increased from €5.0 million to €5.5 million.
According to Novavest, the target rental income from investment properties (excluding projects) as at 30 June 2021 amounted to 26.1 million on an annualised basis, compared with 25.0 million in the previous year. Rental income from residential use as at the balance sheet date was 62% (H1 2020: 61%). In connection with the Corona pandemic, the Company granted rent reductions of CHF 230,000 for H1 2021, representing approximately 0.9% of annualised target rental income as at 30 June 2021.
Net rental income increased by 8% to 12.6m (H1 2020: 11.6m), it adds - mainly due to additional rental income from properties acquired last year. Net yield on investment properties for the period was 3.7%, the same as last year. The vacancy rate of the investment properties (excluding projects) was 4.3% (31.12.2020: 4.0%; 30.06.2020: 4.6%).
The market valuation of the real estate portfolio led to a revaluation gain of 6.3 million (H1 2020: 4.0 million). The portfolio consists of 46 investment properties and five properties in three projects.
As of the balance sheet date, equity amounted to 317.1 million (31.12.2020: 291.9 million) and the equity ratio reached 46.2% (31.12.2020: 43.8%). The net asset value per registered share was CHF 41.12 (31.12.2020: CHF 41.30; 30.06.2020: CHF 39.88).
Portfolio to be expanded
Novavest also reports that the conversion and development projects in Zurich, St. Gallen and Lucerne are on track. The company expects the projects to have a positive effect on the residential occupancy rate in the portfolio, combined with significant potential for value appreciation.
Acquisitions will continue to be examined, but contract negotiations for some properties were broken off in the first half of 2021 because no added value was seen for the portfolio in the long term, according to Novavest. Nevertheless, the company continues to see good opportunities to expand the property portfolio in the course of the second half of 2021. In mid-August 2021, for example, the purchase agreement for a residential property with 13 rental apartments in Moosseedorf (BE) is to be notarised; according to Novavest, the total investment costs amount to 5.8 million. (ah)
