In the first half of 2015, HIAG Immobilien generated CHF 24.2 million in earnings and was able to increase property income by 7.4%.
Solid increase in property income and operating income
The property income increased by 7.4% to CHF 25.1 million during the reporting period (CHF 23.4 million as at 30 June 2014). Annualised property income rose by 3.4% to CHF 51.5 million compared to 31 December 2014 (31 December 2014: CHF 49.8 million). The like for like increase was 3.1%. Earnings per share were CHF 3.02 (30 June 2014: CHF 3.44) or CHF 1.58 without revaluation including revaluation of promotion (30 June 2014: CHF 1.54).
Revaluation effects amounted to a total of CHF 15.2 million in the first half of the year (30 June 2014: CHF 16.2 million). The average weighted discount rate for the entire portfolio was 4.69% at the end of June 2015 (31 December 2014: 4.73%). Without revaluation effects, operating income increased by 9.0% to CHF 26.2 million (30. June 2014: CHF 24.0 million), which can be explained by further sales of assets in Biberist. The property portfolio was evaluated at CHF 1.2 billion as at 30 June 2015, and included 115 properties as at the reporting date.
Strong equity base
The Group has solid financing with an equity ratio of 53.9% (31 December 2014: 54.4%). On an EPRA (European Public Real Estate Association) basis, the equity ratio as at 30 June 2015 was 58.9% (31 December 2014: 58.9%). The loan-to-value ratio (LTV ratio) was 38.3% as at 30 June 2015 (31 December 2014: 37.0%). The average interest rate for financial liabilities was 1.04% during the reporting period (30 June 2014: 1.11%). On 29 April 2015, dividends of CHF 26.4 million were paid out from capital contribution reserves.
Further reduction in vacancy rates
The vacancy rate of the entire portfolio was reduced by 1.7% to 16.3% during the reporting period (31 December 2014: 18.0%). In the yielding portfolio, the vacancy rate decreased significantly in the first half of the year from 11.7% to 10.0%. The vacancy rate decreased from 33.8% to 33.0% for properties undergoing repositioning and from 24.9% to 22.2% for the development portfolio. Net return in the yielding portfolio remained attractive at 5.4% (31 December 2014: 5.4%).
Successful condominium sales
With regard to promotion projects, sales continue to be successful. Twenty-four apartments were sold and 12 reserved in the first half of the year. The net proceeds from condominium sales amounted to CHF 10.9 million (CHF 5.0 million as at 30 June 2014). At the project in Baar, 35% apartments were commercialized at the end of July 2015 and at the Spinnerei III project in Windisch only 9 lofts remain unsold. The Spinnerkönig rental property has been fully rented since the end of July 2015. Construction is scheduled to start in October 2015 for the Feinspinnerei project, which is currently in pre-sales.
Development portfolio expanded
HIAG Immobilien will be creating the new building for the headquarters of JELD-WEN Schweiz in Bremgarten. In all, approximately 2‘500 m2 of office space and 4‘900 m2 of commercial space will be created in ongoing operations over a time period of two years. With this step, the rental agreement for the entire site was prolonged for another 12 years.
Once the contractually designated conditions of execution were fulfilled, the site in Dornach was able to be transferred on 12 January 2015. With the acquisition of the approximately 130'000 m2 site, HIAG Immobilien took over a key redevelopment area for the greater Basel area, where a mixed use with a substantial residential part is planned in the long-term.
Events after the balance sheet date
On 3 June 2015, HIAG Immobilien Holding AG was able to successfully issue a fixed-rate bond for CHF 100 million with a coupon of 1.00% and a maturity of 6 years. Thanks to this bond, HIAG Immobilien will be able to diversify its financing structure and benefit from the attractive conditions of the capital market. Since the cash-inflow from this bond was received in July 2015, the transaction will be reported in the second half of the year. The proceeds are to be used primarily for the repayment of bank financing.
Future prospects
HIAG Immobilien expects that the cooling down of Swiss business activity will continue in the second half of 2015. However, the Management assumes that the demand for a high-quality real estate offer at attractive sites that are easy accessible by public transportation will continue to be supported by the domestic market as well as net immigration. The market for condominiums in particular should develop in a stable manner due to the attractive interest rate environment. With this in mind, HIAG Immobilien continues to aim for an increase in property income without acquisitions of approximately 4% and an increase in operating income (without revaluation and acquisitions) of approximately 6% for the 2015 business year.
Solid increase in property income and operating income
The property income increased by 7.4% to CHF 25.1 million during the reporting period (CHF 23.4 million as at 30 June 2014). Annualised property income rose by 3.4% to CHF 51.5 million compared to 31 December 2014 (31 December 2014: CHF 49.8 million). The like for like increase was 3.1%. Earnings per share were CHF 3.02 (30 June 2014: CHF 3.44) or CHF 1.58 without revaluation including revaluation of promotion (30 June 2014: CHF 1.54).
Revaluation effects amounted to a total of CHF 15.2 million in the first half of the year (30 June 2014: CHF 16.2 million). The average weighted discount rate for the entire portfolio was 4.69% at the end of June 2015 (31 December 2014: 4.73%). Without revaluation effects, operating income increased by 9.0% to CHF 26.2 million (30. June 2014: CHF 24.0 million), which can be explained by further sales of assets in Biberist. The property portfolio was evaluated at CHF 1.2 billion as at 30 June 2015, and included 115 properties as at the reporting date.
Strong equity base
The Group has solid financing with an equity ratio of 53.9% (31 December 2014: 54.4%). On an EPRA (European Public Real Estate Association) basis, the equity ratio as at 30 June 2015 was 58.9% (31 December 2014: 58.9%). The loan-to-value ratio (LTV ratio) was 38.3% as at 30 June 2015 (31 December 2014: 37.0%). The average interest rate for financial liabilities was 1.04% during the reporting period (30 June 2014: 1.11%). On 29 April 2015, dividends of CHF 26.4 million were paid out from capital contribution reserves.
Further reduction in vacancy rates
The vacancy rate of the entire portfolio was reduced by 1.7% to 16.3% during the reporting period (31 December 2014: 18.0%). In the yielding portfolio, the vacancy rate decreased significantly in the first half of the year from 11.7% to 10.0%. The vacancy rate decreased from 33.8% to 33.0% for properties undergoing repositioning and from 24.9% to 22.2% for the development portfolio. Net return in the yielding portfolio remained attractive at 5.4% (31 December 2014: 5.4%).
Successful condominium sales
With regard to promotion projects, sales continue to be successful. Twenty-four apartments were sold and 12 reserved in the first half of the year. The net proceeds from condominium sales amounted to CHF 10.9 million (CHF 5.0 million as at 30 June 2014). At the project in Baar, 35% apartments were commercialized at the end of July 2015 and at the Spinnerei III project in Windisch only 9 lofts remain unsold. The Spinnerkönig rental property has been fully rented since the end of July 2015. Construction is scheduled to start in October 2015 for the Feinspinnerei project, which is currently in pre-sales.
Development portfolio expanded
HIAG Immobilien will be creating the new building for the headquarters of JELD-WEN Schweiz in Bremgarten. In all, approximately 2‘500 m2 of office space and 4‘900 m2 of commercial space will be created in ongoing operations over a time period of two years. With this step, the rental agreement for the entire site was prolonged for another 12 years.
Once the contractually designated conditions of execution were fulfilled, the site in Dornach was able to be transferred on 12 January 2015. With the acquisition of the approximately 130'000 m2 site, HIAG Immobilien took over a key redevelopment area for the greater Basel area, where a mixed use with a substantial residential part is planned in the long-term.
Events after the balance sheet date
On 3 June 2015, HIAG Immobilien Holding AG was able to successfully issue a fixed-rate bond for CHF 100 million with a coupon of 1.00% and a maturity of 6 years. Thanks to this bond, HIAG Immobilien will be able to diversify its financing structure and benefit from the attractive conditions of the capital market. Since the cash-inflow from this bond was received in July 2015, the transaction will be reported in the second half of the year. The proceeds are to be used primarily for the repayment of bank financing.
Future prospects
HIAG Immobilien expects that the cooling down of Swiss business activity will continue in the second half of 2015. However, the Management assumes that the demand for a high-quality real estate offer at attractive sites that are easy accessible by public transportation will continue to be supported by the domestic market as well as net immigration. The market for condominiums in particular should develop in a stable manner due to the attractive interest rate environment. With this in mind, HIAG Immobilien continues to aim for an increase in property income without acquisitions of approximately 4% and an increase in operating income (without revaluation and acquisitions) of approximately 6% for the 2015 business year.
Edmond de Rothschild Real Estate: plus besoin d’augmenter le capital de la SICAV suisse