La Foncière: Net income down due to renovation projects
According to La Foncière's semi-annual report, the fund's net income fell by 12.7% compared to the previous year. This is mainly due to renovation work that was budgeted for and carried out, the fund management company reports.
The fund's vacancy rate was low at 0.7%, while rental income remained stable at CHF 42.8 million (previous year: CHF 42.44 million). This resulted in net income of CHF 16.7 million. Following the completion of major renovation and development projects by the end of the year, rental income is expected to increase as a result of subsequent lettings, according to the fund management.
New mortgage tranches were drawn down to finance the further stages of the ongoing construction projects, namely Côté Parc and Servette 89 abc, which increased the mortgage burden. "The rising interest rates have only a minor impact on the real estate portfolio," according to a statement. The loan interest rates are fixed for an average remaining term of more than four years and the debt financing ratio is relatively low.
As at March 31, 2023, the fund had four major construction and renovation projects in Geneva and Lausanne. Commercialization of the projects in Geneva (Rue de la Servette and Côté Parc) is due to start shortly and tenants are expected to move in during the last quarter of 2023.
The fund's gross assets amounted to CHF 1.85 billion as at March 31. The leverage ratio amounted to 18.5%. The average interest rate on the remaining liabilities is stated by the fund management company at 1.48% (previous year: 1.18%). The return on equity amounted toTP3k 1.631 in H1 (previous year:TP3k 2.441). (aw)
