Swiss Prime Site: Earnings at record level, profit declines
Swiss Prime Site generated operating income of CHF 530.5 million in the first half of 2017, more than ever before in the first six months of a financial year. Profit including revaluation effects fell by just under five million year-on-year to 141 million.
Profit excluding revaluation effects amounted to CHF 131 million in the first half of 2017 (previous year: CHF 134.4 million). Swiss Prime Site cites as the reason for the decline that income from property sales - in particular the partial sale of the "Espace Tourbillon" project - will not be booked until the second half of the year. As Group CEO René Zahnd said at the media conference, the closing of this transaction is planned for September 18, 2017.
At 530.5 million, operating income reached a record high for the first six months of a financial year, rising by 6.7% compared to 2016. According to SPS, both the core real estate business and the real estate-related Group companies contributed to this.
High growth at Tertianum and Wincasa
Operating income in the real estate segment increased by one percent to 210.4 million, while income from real estate-related Group companies rose by as much as ten percent to 356.7 million. The real estate service provider Wincasa achieved growth of 6.7% with income of 67 million; assets under management rose to a record 65 billion.
The Tertianum Group has expanded its network of high-quality residences and care centers and increased income from the Assisted Living segment by 15.8 percent to 176 million. With an investment volume of around 63 million, the realization of the new Du Lac senior citizens' residence in Paradiso (Lugano) is planned for 2018 to 2020.
Real Estate segment remains most important earnings driver
Swiss Prime Site Group's operating result (EBIT) amounted to 215.8 million in the first six months of 2017 (previous year: 225 million). At 202.1 million (previous year: 216.1 million), the Real Estate segment remains the most important earnings driver. SPS's equity ratio amounted to 43.1% on the balance sheet date. The net asset value (NAV) after deferred taxes was CHF 64.63/share, whereby the Services segment is only included in this figure at book value.
The result includes a revaluation gain of 37.4 million. According to SPS, the revaluation is evenly distributed geographically and is largely based on premature and long-term lease renewals (including with the retailer Globus). Rental conditions improved significantly in some cases, which is all the more pleasing given that these contracts mainly relate to retail space in central locations. The Services segment grew by 54.8 percent and generated EBIT of 13.7 million.
Vacancy rate declines
The value of the real estate portfolio on the balance sheet date was 10.3 billion (previous year: 9.9 billion) and the net yield was 3.7%. The vacancy rate fell from 6.4 to 5.5 percent. According to Zahnd, the vacancy rate is expected to fall further to 5.4 and 5.3 percent respectively by the end of the year.
Swiss Prime Site reported in accordance with the Swiss GAAP FER accounting standard for the first time in the first half of 2017 (until December 31, 2016: IFRS). The previous year's figures have been adjusted accordingly, the company announced.
