Real estate portfolio
At the end of March 2010, the real estate portfolio included 177 office and commercial properties in prime locations as well as 8 attractive development sites with a total carrying value of CHF 5.229 billion (end of 2009: CHF 5.216 billion). During the reporting period, two small properties from the investment portfolio (in Grolley and Solothurn) were sold for a total consideration of CHF 4.7 million.
Work on the development sites progressed as planned. The development on the Gurten site near Bern is worth mentioning: the building application for this project (conversion of existing properties and construction of new buildings) was submitted at the end of February 2010. Of the total usable floor space of approximately 31 000 m2, about half is allocated to freehold apartments and the other half to commercial use and services. Construction is scheduled to begin in mid-2011; this means that the project will be completed towards the end of 2013. The investment sum amounts to approximately CHF 93 million (excl. land and infrastructure).
Stable vacancy rate
At the end of March 2010, the vacancy rate stood at 7.7% (end of 2009: 7.5%). Thereof, 1.6 percentage points were due to ongoing renovation work on various properties. The portfolio in Zurich West with a carrying value of CHF 0.6 billion contributes 3.7 percentage points to the overall vacancy rate. The core investment portfolio (i.e. excluding the properties under renovation and the portfolio in Zurich West) with a carrying value of CHF 4.3 billion has a vacancy rate of just 2.9%.
Quarterly results Q1 2010
Net income excluding changes in fair value increased by CHF 8.0 million to CHF 41.5 million. Corresponding earnings per share amounted to CHF 0.98 or 22.5% more than in the previous year's period (CHF 0.80).
The considerable increase compared to the previous year's period was mainly due to the following non-recurring items: i) "net income from discontinued operations" of CHF 4.9 million (after taxes) in connection with the sale of the "Property management for third parties" business in mid-2007. In the reporting period, the final amount of the second and final earn-out payment has been set. All in all, the total compensation from the sale of this business unit amounts to CHF 18.3 million (CHF 8.0 million in the reporting year 2007, CHF 4.0 million in the reporting year 2009 and CHF 6.3 million in the reporting year 2010) and ii) "other income" of CHF 3.7 million in connection with the voluntary VAT-opting-in of a larger rental contract.
Solid capital structure, low interest expenses
With a loan-to-value of 36.6% (end of 2009: 37.2%), the capital structure remains very solid. Currently, the amount of unused credit lines is CHF 690 million. No bank loans are due in 2010 until 2012. In the reporting period, the average interest rate was 2.55% (first quarter 2009: 2.49% resp. 2.54% for the whole 2009 business year). At the end of March 2010, the average interest rate stood at 2.59% (end of 2009: 2.63%) and the average fixed-interest period was 3.2 years (end of 2009: 3.0 years).
Outlook 2010
PSP Swiss Property increases the EBITDA forecast from "over CHF 210 million" to "approximately CHF 215 million" for the entire 2010 business year. The improvement reflects the higher-than-expected final performance-related income from the sale of the "Property management for third parties" business.
The vacancy rate of approximately 8% for the year-end is being confirmed. The completion of the Businesspark Richtistrasse in Wallisellen at mid-2010 might contribute an additional 1.2 percentage points.
