PSP Swiss Property raises Ebitda forecast

PSP Swiss Property reports net income excluding gains/losses on real estate investments of CHF 69.7 million for the first quarter of 2022. This is 7.8 million or 12.7% more than in the same period last year (61.8 million). The increase was mainly due to higher rental income (+1.7 million), higher profits from the sale of development projects and condominiums (+5.2 million) and more own work capitalized (+1.3 million), the real estate company says. While Corona-related rent reductions of 1.6 million were still incurred in the first quarter of 2021, there were "virtually no" rent reductions in the reporting period.

Net income, however, decreased by 10.8 million or 12.2% year-on-year to 78.0 million (PY: 88.8 million). This was due to a lower portfolio revaluation of 11.9 million compared to the same period last year (33.2 million), PSP said. Net asset value (NAV) per share was CHF 107.62 at the end of the first quarter (CHF 109.42 at the end of 2021). NAV before deduction of deferred taxes was CHF 129.98 (end of 2021: CHF 131.84).

The balance sheet value of the portfolio at the end of March was 9.2 billion (end of 2021: 9.1 billion). The vacancy rate was 3.5% (end of 2021: 3.8%), of which 0.6 percentage points were due to ongoing refurbishments, according to the real estate company. Of the 54.8 million worth of leases expiring this year, 80% had already been renewed as of the end of March 2022. The wault (weighted average unexpired lease term) of the overall portfolio was 3.9 years, and the wault of the ten largest tenants, which contribute around 30% of rental income, was 4.6 years.

Ebitda to rise to over CHF 285 million

A precise outlook for the commercial real estate market for the full year 2022 is difficult, writes PSP Swiss Property in its quarterly results release. However, the real estate company expects demand for contemporary office space in A-locations to hold up in the coming months. The rental market for older office properties in B and C locations as well as for non-food retail space, on the other hand, is expected to remain difficult.

PSP Swiss Property will only make acquisitions if they offer the prospect of long-term added value. Non-strategic properties will continue to be sold selectively.

For the financial year 2022, PSP Swiss Property raises its Ebitda forecast: The real estate company now expects an Ebitda excluding gains/losses on real estate investments of more than 285 million, previously 285 million was the target figure. The vacancy rate forecast remains unchanged and is expected to be below 4% by the end of 2022. (ah)