PSP Swiss Property: Profit increase and improved forecast

PSP Swiss Property has reported net income excluding gains/losses on real estate investments of CHF 166.8 million for the first nine months of 2021, an increase of 7.1 million or 4.5% compared to the same period last year (159.7 million). The increase was mainly due to higher rental income (+10.3m) and higher profits from the sale of development projects and condominiums (+5.9m), the real estate company wrote in a statement. In connection with the Corona pandemic, PSP granted rent waivers of 3.6 million, compared with 2.8 million in the same period last year and 4.6 million in 2020 as a whole. The outstanding rent receivables due to the lockdown amounted to 6.7 million at the end of September (end of 2020: 5.4 million).

Net income came in at 431.0 million, compared to 179.9 million in the previous year. The increase of 251.1 million was mainly due to a portfolio revaluation of 331.9 million (previous year: 28.0 million), according to PSP. 325.0m of this had already been incurred in the ordinary portfolio valuation in mid-2021. The main reason for the revaluation was the reduction in the discount rates used for the mid-2021 valuation as a result of the further decline in investors' yield expectations, PSP added. The balance sheet value of the portfolio was 8.998 billion at the end of September, compared to 8.577 billion at the end of 2020.

Earnings per share amounted to CHF 9.40 (previous year: CHF 3.92). Net asset value (NAV) per share was CHF 105.80 at the end of September (end of 2020: CHF 99.83), and NAV before deduction of deferred taxes was CHF 127.40 (end of 2020: CHF 119.57).

The vacancy rate stood at 3.5% at the end of September (end-2020: 3.0%), of which 0.7 percentage points was due to ongoing refurbishment work, PSP said. Of the 52.4m worth of leases expiring this year, 84% were renewed at the end of September, 12% were not renewed and 4% were still open, it said. The Wault (weighted average unexpired lease term) of the overall portfolio was 4.1 years. The Wault of the ten largest tenants, which contribute around 30% of rental income, was 4.5 years.

PSP Swiss Property is on track for the full 2021 financial year: The real estate company now expects an Ebitda excluding gains/losses on real estate investments of more than 275 million, compared to the previous forecast of around 275 million. In 2020, the key figure was 271.1 million. In terms of vacancies, PSP now expects a rate of 4% at the end of 2021; previously, it expected a rate below 4.5%. (ah)