For the reporting period January to September 2009, PSP Swiss Property has improved its results considerably compared to last year's first nine months. Net income excluding changes in fair value increased by 9.7% to CHF 103.2 million (previous year's period: CHF 94.1 million). Corresponding earnings per share excluding changes in fair value increased by 11.3% to CHF 2.47 (previous year's period: CHF 2.22). As at the end of September 2009, NAV per share amounted to CHF 63.33, 2.4% higher than as at the end of 2008 (CHF 61.83). It should be noted that during this period a nominal value repayment of CHF 2.50 per share was made (June 2009). NAV before deducting deferred tax liabilities grew by 2.7% to CHF 73.92 (end of 2008: CHF 72.01).
Real estate portfolio
As at the end of September 2009, the real estate portfolio of PSP Swiss Property included 182 office and commercial properties in prime locations as well as seven attractive development sites with a carrying value of CHF 5.192 billion (end of 2008: CHF 5.149 billion). In the first nine months of the year, several acquisition opportunities were evaluated, but no purchases were made. After two investment properties in Schaffhausen and St. Gallen had been sold in the first half of 2009 in the context of optimising the portfolio, additional five properties were sold in the third quarter of 2009. Furthermore, the sale of a building in Rapperswil has been negotiated but closed only after the balance-sheet date. Net sales revenue from these eight investment properties totalled CHF 133.1 million, exceeding the last estimate of Wüest & Partner by 11.7%.
The ongoing site developments progressed as planned. The following developments are worth mentioning: i) Hürlimann site, Zurich: approx. 700 m2 office space is being developed in the former heating room of the brewery („Kesselhaus"). The building application was submitted in July 2009 and the permit is expected in the fourth quarter of 2009. The conversion of the "Kesselhaus" is scheduled for 2011. The total investment for this project amounts to about CHF 4.3 million (excluding land and infrastructure). ii) Wädenswil site: marketing of the eighteen freehold apartments of the apartment complex „Refugium" started in June 2009 and construction began in October 2009. The investment for this building project amounts to approx. CHF 13 million.
Positive vacancy development
By year-end 2009, the vacancy rate is expected to be approx. 8%. As at the end of September 2009, the vacancy rate was 9.2% (end of 2008: 8.3%), whereof 2.3%-points relate to renovation work on several properties: 0.7%-points relate to the property on Bleicherweg 10 in Zurich which is again fully let after completion of the renovation work (as per 1 December 2009). 0.5%-points relate to the property on Route des Acacias 52 in Carouge, which is also fully let after renovation (as per 1 July 2010). 0.7%-points relate to the renovation of the property on Aarbergstrasse 94 in Biel, which will be completed in 2010.
Strong operating results
Rental income grew by 4.1% to CHF 200.3 million. This increase of CHF 7.8 million was a result of the reduction of vacancies in the previous year, higher rents and two special effects occurred in the first half of 2009 (the release of accounts receivable provisions of CHF 1.3 million that are no longer required, the settlement of a balance-sheet position of CHF 1.1 million after final negotiations of a lease agreement). Operating expenses fell by 2.3% to CHF 41.1 million. This decrease was mainly due to lower real estate operating expenses and lower general and administrative expenses.
Positive earnings development and lower expenses resulted in an increase of EBITDA excluding gains/losses on real estate investments by 6.4% to CHF 168.1 million (previous year's period: CHF 157.9 million). Consequently, the EBITDA margin improved to 80.6% (previous year's period: 79.4%).
Ongoing solid capital structure
With a loan-to-value of 38.6% (end of 2008: 40.5%), the capital structure remains very solid. Currently, the amount of unused credit lines is CHF 540 million and no credit lines are due to be refinanced for the years 2009 and 2010. During the first nine months of 2009, the average interest rate was 2.52% (first half of 2008: 2.77%). As at the end of September 2009, the average fixed-interest period was 3.0 years (end of 2008: 3.1 years).
Outlook 2009
The forecast for the entire business year 2009 remains unchanged from the figures PSP Swiss Property communicated in August 2009 (publication of the 2009 interim results) and takes the reduced net rental income of approx. CHF 2.1 million due to the property sales into account:
- EBITDA excluding gains/losses on real estate investments: approx. CHF 215 million (2008: CHF 208.4 million).
- Vacancy rate at year-end 2009: approx. 8% (June 2009: 9%).
These results would be a new record in the history of PSP Swiss Property.
