HIAG with sound half-year results 2020

Media Release
 

Basel, 31 August 2020 – The year 2020 is impacted by the corona pandemic. The effects of the global crisis are also having an impact on the Swiss real estate industry. Despite these major challenges, HIAG successfully continued its concentration on the real estate business and achieved a solid result in the first half of 2020 with a net profit of CHF 22.1 million (first half of 2019: CHF -43.4 million): The expected operating result excluding revaluation effects was confirmed. Annualised property income increased slightly. The portfolio value increased significantly. The vacancy rate decreased as planned and is expected to be further reduced by the end of fiscal 2020.

Pleasing growth in real estate business

In the first half of 2020, HIAG generated collected property income of CHF 29.5 million (first half of 2019: CHF 29.7 million). Adjusted for the impact of the pandemic of CHF 0.5 million and the acquisition in Zurich Altstetten in the second half of 2019, rental income increased by 0.7% to CHF 29.8 million. Income from the property in Zurich Altstetten acquired in the second half of 2019 and from completed development projects compensated for the shortfalls due to the bankruptcy of Rohner AG Pratteln and the move of Decathlon in Dietikon. The impact of the Corona pandemic on the rental income received amounted to 0.8% of annualised rental income in the first half of 2020, which increased slightly by 0.3% to CHF 58.9 million (31.12.2019: 58.7 million). In addition, total lease waivers of CHF 0.1 million were agreed and as of 30 June 2020, CHF 0.4 million were recognised in the income statement in connection with the COVID-19 Business Rental Act, which is in preparation, for unpaid (CHF 0.05 million) or already paid lease receivables (CHF 0.35 million). The vacancy rate was reduced to 15.5% (31.12.2019: 16.2%). HIAG also has a comfortable weighted average remaining lease term (WAULT) of 8.7 years (31.12.2019: 8.9 years). At the end of June 2020, the total portfolio consisted of 118 properties. The portfolio value increased by 3.2% to CHF 1.62 billion (31.12.2019: 1.57 billion). During the reporting period, a development site of around 22,300 m² was acquired in the industrial area of Bussigny (VD) with potential for commercial, logistics and office use. As a result of new signed rental agreements and progress of development projects, the effects of revaluations in the first half of 2020 amounted to CHF 17.7 million, compared with CHF -26.0 million in the previous year, mainly due to the bankruptcy of Rohner AG Pratteln. The weighted average discount rate for the entire portfolio decreased slightly to 3.90% (31 December 2019: 3.94%). As expected, the real estate result was burdened by subsequent operating costs totalling CHF 6.2 million for HIAG Data and the Rohner site in Pratteln.

Sound financial structure

On 30 June 2020, HIAG Immobilien Holding AG had an equity ratio on an EPRA basis of 45.5% (31.12.2019: 45.6%). The weighted average term of debt capital was 2.2 years (31.12.2019: 2.7 years). The average interest rate for financial liabilities remained low at 0.9% (first half of 2019: 0.9%). The loan-to-value ratio (LTV) remained stable at 51.4% (31 December 2019: 51.4%).

Outstanding real estate pipeline

On 30 June 2020, HIAG's development portfolio consisted of more than 60 projects with a usable space of around 740,000 m² (31.12.2019: 707'000 m²). The expected investment volume without further acquisitions is around CHF 2.7 billion, of which around CHF 2.0 billion is expected to be invested over the next ten years. Five fully let projects with annualised rental income of around CHF 4.3 million upon completion are already under construction. In addition, a further 13 development projects with usable space of around 120,000 m² and remaining investments of approximately CHF 339 million will be realized in the next three years. The expected annualised property income after completion and full occupancy of these projects amounts to approximately CHF 23.3 million and sales proceeds to around CHF 73 million.

Outlook

Based on the current letting successes achieved, a further reduction of at least 1 percentage point in the vacancy rate in the yielding portfolio is targeted compared with the first half of the year. The announced goal of increasing annualised rental income for fiscal 2020 remains unchanged.

HIAG assumes that in the second half of 2020 the operating result in the real estate segment will exceed the comparable figure for the first half of the year. The negative effect on the 2020 annual result from the subsequent operating costs of HIAG Data and the redevelopment of the site in Pratteln should be in line with expectations.

Now that the first plant equipment and raw materials of the former chemical company in Pratteln have already been sold, further proceeds from the sale of assets are expected in fiscal 2021. In addition, the basis for a forecast of possible revenues from 2021 onwards from the exploitation of the infrastructure of HIAG Data should be available in the second half of 2020.

Following the decision not to pay a dividend for fiscal 2019, the Board of Directors has decided that the dividend proposal for fiscal 2020 should be based on the Group's operating profit for 2020.

Selected key figures of HIAG

⁽¹⁾ EPRA Earnings adjusted for the contribution HIAG Data and for the contribution Jaeger et Bosshard SA

Media presentation 2020

The half-year report 2020 of HIAG is available at https://www.halfyearreport.hiag.com/, the presentation is available at https://www.hiag.com/en/investoren/reporting-center/

Media presentation

On Monday, 31 August 2020, 9.00 a.m., Marco Feusi, CEO, and Laurent Spindler, CFO, will comment on the half-year results 2020 and answer questions in a live webcast with conference call
(the presentation will be in German):

Date: 31. August 2020

Time: 9:00 a.m. (CET)

Webcast (listen only): https://78449.choruscall.com/dataconf/productusers/hiag/mediaframe/39617/indexl.html

Dial-in numbers:

+41 (0)58 310 50 00 (Europe)

+44 (0)207 107 06 13 (UK)

+1 (1)631 570 56 13 (USA)

A replay of the webcast is available under the same link after the presentation.

Space for development - completely new website hiag.com!

HIAG has relaunched the corporate website hiag.com as part of its focus on the real estate business. At the heart of this is the brand promise 'Space for development', which reflects HIAG's new identity. The result is a website with a fresh, modern appearance, geared to the information needs of different user groups. The new appearance focuses on the sites and their offerings. Digital content is presented effectively and the community of users is given more emphasis in the specially defined area.

Company Calendar

23 September 2020       Investora Zürich, Samsung Hall, Zürich-Stettbach

15 März 2021                Publication of the 2020 annual results

22 April 2021                Annual General Meeting 2020

31 August 2021             Publication ot the 2021 half-year results

Contacts

HIAG Immobilien Holding AG

Aeschenplatz 7

4052 Basel

T +41 61 606 55 00

investor.relations@hiag.com

www.hiag.com