Allreal with lower operating result
Higher financing costs had a negative impact on operating profit in 2023 and - unlike in the previous year - devaluations had an impact on consolidated net income.
Allreal's operating net profit for the 2023 financial year fell from CHF 142.9 million to CHF 122.0 million. After the portfolio had been revalued by CHF 16.5 million in the previous year, a devaluation of CHF 64.5 million was recorded. This was due in particular to the lower valuation of the residential portfolio in Western Switzerland and the property on Freiburgstrasse in Berne, Allreal explains. Increased discount and capitalization rates also led to slight devaluation pressure. Including the revaluation effect, this resulted in a lower net profit of CHF 65.2 million (2022: CHF 154.7 million). At CHF 5.08 billion, the market value of the Allreal portfolio remained almost unchanged in 2023 compared to the previous year (CHF 5.10 billion).
Real estate segment with higher rental income
In the Real Estate segment, rental income increased by 2.6% to CHF 219.8 million, despite the sale of two properties in Basel in the previous year and the sale of a property in Urdorf (ZH) in the first half of the year. The growth in income was mainly due to the indexation of commercial rents to inflation and the increase in the reference interest rate for residential rents, as well as the completion of the modernization of the property at Bellerivestrasse 36 in Zurich. The fully let office building has been generating income again since the third quarter. The vacancy rate remained low at 1.7% (previous year: 1.6%). Overall, the Real Estate segment generated net income excluding revaluation effect of CHF 124.4 million (2022: CHF 133.6 million).
Allreal has concluded new rental agreements for 52,200 square meters. The transport company BLS is now the new anchor tenant of the property on Freiburgstrasse in Berne, and larger rental agreements have also been concluded with well-known tenants for the vacated space in Richtiring in Wallisellen (ZH), according to the statement.
Development division with lower realization volume
In the Development & Realization segment, the result fell significantly while the gross margin remained stable. Income from business activities fell from CHF 54.6 million to CHF 37.7 million. The company cites the lower project volume in Realization and a one-off effect from the sale of a development reserve in the previous year as the reason for this. Due to higher interest rates, financing costs increased noticeably compared to the previous year.
Milestones in the development projects included the building application for the Eggen project in Lucerne (IB reported) and the start of the realization of the Avenue du Curé-Baud project in Grand-Lancy (GE), where a property with 13 condominiums will be built over the next two years. The Inzlingerstrasse project in Riehen (BS) is ready for construction, but is still awaiting approval from the authorities. There are plans for 17 semi-detached houses.
"Capital recycling" continues
Allreal continued its capital recycling strategy last year with the sale of three properties in Urdorf (ZH), Oberglatt (ZH) and Allschwil (BL) that were no longer in line with its strategy. The three properties were sold "in total above book value", according to the company. The funds flowed into new projects, such as the purchase of the Rieter site in the city of Winterthur.
Slightly lower profit expected for 2024
For the 2024 financial year, the company expects a further increase in net financial expenses. This will have a negative impact on operating net profit. "Allreal therefore expects net operating profit to be slightly below the previous year," the company writes. (aw)
