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PSP Swiss Property AG / Key word(s): Quarter Results
PSP Swiss Property achieves solid operating results and improves the ebitda guidance for the 2024 business year.
07-May-2024 / 06:30 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.
Quarterly results as per 31 March 2024
. At the end of Q1 2024, the real estate portfolio had a value of CHF 9.6 billion and a vacancy of 4.1%
(end of 2023: CHF 9.6 billion; 3.6%).
. Equity was CHF 5.3 billion, corresponding to an equity ratio of 54.5% (end of 2023: CHF 5.2 billion;
53.3%).
. Rental income increased by 9.9% to CHF 89.2 million (Q1 2023: CHF 81.1 million).
. The operating result, i.e., net income excluding gains/losses on real estate investments, grew by 0.6% to
CHF 56.6 million (Q1 2023: CHF 56.3 million).
. Improved guidance: ebitda excluding gains/losses on real estate investments for the 2024 financial year
is now expected to be CHF 300 million (previous guidance: above CHF 295 million).
Real estate market
PSP Swiss Property's portfolio reflects a sub-segment of the commercial property market in Switzerland: quality
properties in central locations in the main economic centres. The demand for attractive rental space remained intact in
this segment, especially in the city centres of Zurich and Geneva. By contrast, the market for older office properties
in B and C locations and non-food retail space in secondary locations remained challenging.
The transaction market for attractive properties in good city-centre locations also hardly changed in terms of prices
and initial yields in the reporting period. The asking yields for such investment opportunities remain low despite the
higher interest rates. However, investors are demanding higher returns than in the past for properties in peripheral
locations and for properties with poor sustainability profiles.
Real estate portfolio
At the end of Q1 2024, the value of the real estate portfolio was CHF 9.6 billion (end of 2023: CHF 9.6 billion), the
vacancy rate was 4.1% (end of 2023: 3.6%). The portfolio included 162 investment properties. In addition, there were
two sites and eight development projects. No investment properties were bought or sold in the reporting period. The
last residential unit in the "Residenza Parco Lago" development in Lugano/Paradiso was sold for CHF 3.5 million. No
development projects were bought or sold.
An internal value analysis as at the end of March 2024 led to a revaluation by the independent external valuation
expert totalling CHF 31.2 million. The revaluation was based on property-specific factors of the investment properties
Bahnhofstrasse 28a / Waaggasse 6, Bahnhofstrasse 66 and Waisenhausstrasse 2, 4 / Bahnhofquai 7 (all in Zurich) and the
development project at Hochstrasse 16 / Pfeffingerstrasse 5 in Basel.
Of the lease contracts maturing in 2024 (CHF 31.3 million), 14% were open at the end of Q1 2024. The wault (weighted
average unexpired lease term) of the total portfolio was 4.8 years at the end of Q1 2024. The wault of the ten largest
tenants, contributing 25% to the rental income, was 5.5 years.
Consolidated quarterly results
Rental income was up by CHF 8.0 million or 9.9% to CHF 89.2 million (Q1 2023: CHF 81.1 million). The following factors
in particular had a positive impact on rental income compared to the previous year's period: the "Westpark" office
property in Zurich-West purchased mid-2023 (CHF +2.2 million), turnover-linked rent of a single tenant (CHF +1.3
million), one-off effect (CHF +1.3 million), indexation (CHF +1.1 million). Like-for-like, rental income was up 6.6%;
adjusted for two one-off effects mentioned above (turnover-linked rent of a single tenant and one-off effect),
like-for-like growth amounted to 3.3%.
The operating result, i.e. net income excluding gains/losses on real estate investments, increased by CHF 0.3 million
or 0.6% to CHF 56.6 million (Q1 2023: CHF 56.3 million). The above-mentioned increase in rental income had a positive
impact on earnings. On the other hand, higher operating expenses (+ CHF 0.7 million) and higher financing costs (+ CHF
4.4 million) had a negative impact. However, it should be noted that financing costs were still low in relative terms,
with an average cost of debt over the last four quarters of 0.85% (Q1 2023: 0.41%).
Earnings per share excluding gains/losses on real estate investments, which form the basis for the dividend
distribution, amounted to CHF 1.23 (Q1 2023: CHF 1.23). Net profit reached CHF 81.0 million (Q1 2023: CHF 57.0
million). The increase by CHF 24.0 million or 42.0% was due to the portfolio appreciation of CHF 31.2 million mentioned
above (Q1 2023: no appreciation or devaluation). Earnings per share amounted to CHF 1.77 (Q1 2023: CHF 1.24). Equity
per share (net asset value; NAV) amounted to CHF 115.60 at the end of Q1 2024 (end of 2023: CHF 113.82). NAV before
deduction of deferred taxes totalled CHF 136.53 (end of 2023: CHF 134.48).
Capital structure
With total equity of CHF 5.302 billion at the end of March 2024 - corresponding to an equity ratio of 54.5% - the
equity base remains strong (end of 2023: CHF 5.221 billion or 53.3%). Interest-bearing debt capital amounted to CHF
3.316 billion or 34.1% of total assets (end of 2023: CHF 3.466 billion or 35.4%). At the end of March 2024, the passing
average cost of debt was 1.01% (end of 2023: 0.91%). The average fixed interest rate was 4.0 years (end of 2023: 3.9
years).
At the time of publication of this report, PSP Swiss Property had CHF 0.975 billion in open credit facilities, of which
CHF 0.675 billion were committed.
PSP Swiss Property has an Issuer Rating A3 and a Senior Unsecured Rating A3 (outlook stable) from Moody's.
Sustainability - Green Bond Report
In November 2022, the Green Bond Framework was introduced and presented. Detailed information on its implementation can
be found in the Green Bond Report (2^nd edition) published on 7 May 2024 which is available at www.psp.info. The Green
Bond Report is published annually as part of the Q1 publication.
Subsequent events
Based on the resolution of the Annual General Meeting on 4 April 2024, a payment of an ordinary dividend of CHF 3.85
gross per share (totalling CHF 176.6 million) was made on 10 April 2024 (previous year: CHF 3.80 gross per share
totalling CHF 174.3 million).
On 10 April 2024, a 1.65% bond (green bond, all-in 1.691%, spread of 52 basis points) with a volume of CHF 100 million
and a maturity in October 2032 was issued.
Outlook
In the market segment relevant to PSP Swiss Property, especially in the economic centres Zurich and Geneva, demand for
office and retail space is expected to remain intact. The Berne letting market remains stable, whereas the market in
Basel is more difficult.
Rental income in the 2024 business year is expected to be higher than in 2023. This is in part due to the indexation of
rental agreements. There will also be additional income from turnover-linked leases which recovered after the corona
pandemic. Furthermore, additional rental income from new lettings in the development projects is expected. Income from
the sale of development projects and condominiums is expected to decrease compared to last year, while operating costs
will remain stable. Financial expenses will increase compared to 2023.
Ebitda excluding gains/losses on real estate investments is now expected to be CHF 300 million for the 2024 financial
year (previous guidance: above CHF 295 million; 2023: CHF 297.7 million). The vacancy rate is still expected to be
below 4% at the end of 2024 (end of 2023: 3.6%).
Kennzahlen

Key financial figures                              Unit      2023      Q1 2023 Q1 2024   +/-^1 
Rental income                                      CHF 1 000 331 905   81 135  89 182    9.9% 
EPRA like-for-like change                          %         5.1       4.0     6.6^2 
Net changes fair value real estate investments     CHF 1 000 -161 261  0       31 210 
Income from property sales (inventories)           CHF 1 000 14 012    938     568 

Income from property sales (investment properties) CHF 1 000 910 910 0

Total other income                                 CHF 1 000 7 000     628     555 
Net income                                         CHF 1 000 207 595   57 024  80 990    42.0% 
Net income excl. real estate gains^3               CHF 1 000 339 213   56 283  56 615    0.6% 
Ebitda excl. real estate gains                     CHF 1 000 297 742   69 901  76 722    9.8% 
Ebitda margin                                      %         84.4      84.5    85.0 
Total assets                                       CHF 1 000 9 786 900         9 726 094 -0.6% 
Shareholders' equity                               CHF 1 000 5 220 722         5 302 390 1.6% 
Equity ratio                                       %         53.3              54.5 
Return on equity                                   %         4.0               6.2 
Interest-bearing debt                              CHF 1 000 3 465 833         3 315 731 -4.3% 
Interest-bearing debt in % of total assets         %         35.4^4            34.1 

Portfolio key figures

Number of investment properties                    Number    162               162 
Carrying value investment properties               CHF 1 000 9 046 911         9 081 137 0.4% 
Implied yield, gross                               %         3.6               3.9 
Implied yield, net                                 %         3.2               3.5 
Vacancy rate (CHF)                                 %         3.6               4.1 

Number of sites and development properties Number 11 10 Carrying value sites and development properties CHF 1 000 560 582 566 194 1.0%
Headcount
Employees/FTE Number 101/90 98/87
Per share figures
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