PSP Swiss Property: Operating profit to increase significantly in 2023
The company benefits from higher real estate income and a tax effect, but earns 37 percent less after revaluation.
The balance sheet value of PSP Swiss Property's portfolio grew from CHF 9.4 billion to CHF 9.6 billion in 2023, while the vacancy rate at the end of the year was slightly higher than in the previous year (CHF 3.0%) at CHF 3.6%. Of the rental agreements expiring in 2024 with a volume of CHF 31.3 million, CHF 24% were outstanding. The "Westpark" at Pfingstweidstrasse 60, 60b in Zurich was acquired for CHF 216.5 million, while PSP sold the property at Bahnhofstrasse 23 in Interlaken for CHF 3.0 million, part of the site in Wädenswil for CHF 13.0 million and the "Spiegel" project in Köniz for CHF 2.7 million. Partial sales totaling CHF 19.8 million were made for the "Residenza Parco Lago" project in Paradiso and the "Salmenpark" site in Rheinfelden.
Six projects were completed and added to the investment portfolio, including the renovated "P-West" parking garage in Zurich-West and the "Clime" timber building in Basel was handed over to the tenants. The modernizations "Hôtel de Banque" in Geneva and "Bahnhofplatz" in Zurich were completed in Q3. PSP also completed the new "B2Binz" building and the complete renovation of the "Zürcherhof" (both in Zurich) in Q4.
Property income increased by CHF 5.0% to CHF 331.9 million, while the operating result (before revaluation) rose by CHF 43.9% to CHF 339.2 million. The reversal of deferred taxes resulted in a positive contribution to earnings of CHF 106.9 million. By contrast, lower profits from the sale of development projects and condominiums had a negative effect (CHF 11.2 million less than in the previous year). Financing costs rose by 98.0% to CHF 22.9 million. Earnings per share excluding gains/losses on real estate investments increased from CHF 5.14 to CHF 7.40 - without the reversal of deferred taxes it would have been CHF 5.07. Net profit decreased by CHF 37.1% to CHF 207.6 million due to a portfolio devaluation of CHF 161.3 million.
Credit lines of 1.1 billion
Equity amounted to CHF 5.2 billion. The LTV increased slightly compared to the previous year from 32.6 to 34.7%. PSP currently has unutilized credit lines of CHF 1.1 billion at its disposal. This is expected to increase from CHF 3.80 to CHF 3.85 per share.
EBITDA forecast expected to be almost at the previous year's level
For 2024, the company expects higher property income than in 2023, also boosted by the indexation of rental agreements. In addition, there should be additional income from successful lettings in development projects. Income from the sale of development projects and condominiums is expected to fall and operating costs will remain stable, according to the statement. EBITDA excluding gains/losses on real estate investments is forecast at CHF 295 million (previous year: CHF 297.7 million). The vacancy rate is expected to be "below 4%" at the end of 2024 (end of 2023: 3.6%). (aw)
