Swiss Prime Site increases operating result
The company increased its operating result by 4.6% in the first half of the year and is raising its guidance slightly. SPS justifies the positive reassessment with operational improvements.
Swiss Prime Site reports an increase in rental income of CHF 6.0% to CHF 232.0 million as part of its half-year figures. The new construction projects on Müllerstrasse in Zurich, in Stücki-Park in Basel and at Pont-Rouge in Geneva, a further reduction in the vacancy rate to a record low of 3.6% (end of 2023: 4.0%) and better rental rates for new lettings and re-lettings contributed to this. Like-for-like growth increased from 3.4 to 3.7%. Meanwhile, the cost/income ratio fell from 19.4% in the same period of the previous year to 18.4%. Accordingly, the operating profit (EBITDA) of the real estate segment, excluding gains on disposal, rose by CHF 7.3% to CHF 199.8 million.
Portfolio revaluation operationally justified
The revaluation of the portfolio resulted in an earnings contribution of CHF +30 million, following a devaluation of CHF 99 million in the prior-year period. "As the discount rate applied remained unchanged, this change is exclusively attributable to operational improvements", writes SPS, citing higher new rental agreements, lower vacancy rates and lower property costs. Overall, the value of the properties increased by CHF 73 million to CHF 13.15 billion compared to the end of 2023 due to the combination of valuation adjustments, sales and investments in developments.
Sales above book value
Six properties with a total book value of around CHF 50 million were sold. The prices achieved were 5% above the last estimated values from the end of 2023. The company expects sales in the region of CHF 250 to 300 million for the year as a whole. The proceeds will be used to acquire higher-quality properties.
"Largest independent asset manager in Switzerland"
A key event in the first half of the year was the acquisition of Fundamenta in the Asset Management division. By acquiring assets under management of CHF 4.2 billion, SPS Solutions claims to be the largest independent real estate asset manager in Switzerland and now has AuM of CHF 12.7 billion.
Retail business clouds the figures
At Group level, consolidated operating profit before depreciation, amortization and revaluations (EBITDA) increased by CHF 3.5% to CHF 204.7 million - excluding the pro rata result of Wincasa, which was sold in the previous year. The operating profit includes a loss of CHF 3.8 million from the Jelmoli retail business, "driven by a further decline in income to CHF 55.9 million", according to the statement. In the same period of the previous year, income had still amounted to CHF 59.8 million. According to SPS, this was due to lower footfall and lower average sales per purchase. Swiss Prime Site increased its cash earnings per share (funds from operations or "FFO 1") by a total of CHF 4.6% to CHF 2.03.
SPS has slightly raised its forecast for the year as a whole. A vacancy rate of around 3.8% is expected - the most recent target was "below 4 %". The company also anticipates an increase in FFO I to between CHF 4.15 and CHF 4.20 per share. A corridor of CHF 4.10 to 4.15 had previously been stated. (aw)
