HIAG on track after a successful fiscal year

Media information

Basel, 15 March 2021 – In fiscal year 2020, the strengths of HIAG's broad sector and tenant mix were evident. All real estate projects were successfully advanced. The vacancy rate decreased significantly to 13.2%, and annualised property income rose to CHF 60.0 million. A solid result was achieved with a net income of CHF 55.2 million. HIAG is on course and well positioned to grow at an above-average rate compared to the branch. The Board of Directors will propose to the Annual General Meeting on 22 April 2021 a distribution of CHF 2.30 per outstanding share, half from reserves from capital contributions and half as an ordinary dividend.

Good development of the real estate business

HIAG achieved its targets in fiscal year 2020. Annualised property income increased by 2.2% to CHF 60.0 million (2019: CHF 58.7 million). Collected property income amounted to CHF 59.7 million (2019: CHF 61.4 million); the decrease of 2.7% mainly reflects the impact of the bankruptcy of Rohner AG Pratteln and the departure of Decathlon in Dietikon. The net return on rental income from the existing portfolio was 3.4%. New contract conclusions, progress in project developments and an acquisition enabled a positive effect from revaluations totalling CHF 27.0 million, after a minus of CHF 16.0 million in the previous year mainly as an effect of the bankruptcy of Rohner AG Pratteln. HIAG achieved a solid Group result of CHF 55.2 million (2019: CHF -70.7 million) in the reporting year despite lagging operating costs in connection with the demolition project in  Pratteln and the restructuring of HIAG Data. Earnings per share (EPS) were equivalent to CHF 6.82 (2019: CHF -8.85). Before revaluations and deferred taxes, profit was CHF 32.6 million (2019: loss of CHF 69.1 million). The vacancy rate in the overall portfolio was significantly reduced by 3.0 percentage points to 13.2%. In the yielding portfolio, the vacancy rate was 13.0% (2019: 16.6%). The average remaining lease term of 7.9 years (2019: 8.9 years) - excluding leases already concluded for existing construction projects - remains comfortable. The value of the total portfolio of 116 properties increased to CHF 1.64 billion at the end of 2020 (2019: 1.57 billion). The weighted average discount rate for the total portfolio decreased slightly to 3.73% (2019: 3.94%).

Marginal impact of the pandemic on results

The broad sector mix with a diversified tenant structure as well as the focus on logistics, industrial and commercial tenants, the active portfolio management and the close proximity to tenants of the property management team made it possible to keep the direct impact of the pandemic on the 2020 result at a low level of CHF 0.3 million of the collected property income or 0.4% of the annualised property income. In total, HIAG granted rent reductions of around CHF 0.1 million. In addition, the result was burdened by CHF 0.2 million accruals in connection with the measures ordered by the authorities at the end of 2020. HIAG also granted rent deferrals of just under CHF 0.1 million. The outstanding rent receivables in connection with the restrictions imposed by the authorities amounted to around CHF 0.5 million at the end of 2020, the majority of which are secured with rent guarantees.

Improved capital structureThe equity ratio increased to 45.0% (2019: 41.3%). The loan-to-value (LTV) ratio decreased to 48.7% (2019: 51.4%). The weighted average maturity of debt was 2.0 years (2019: 2.7 years). The average interest rate on borrowings remained at the previous year's low level of 0.9% (2019: 0.9%).

Dividend proposal

The Board of Directors proposes to the shareholders a distribution for fiscal 2020 of CHF 2.30 per outstanding share (ex-date: 26 April 2021, value date: 29 April 2021), corresponding to a yield of 2.1% on the share price at the end of 2020. The distribution to shareholders is to be made in equal parts from the reserves from capital contributions (without withholding tax deduction) and as an ordinary dividend (with 35% withholding tax deduction).

Outstanding development pipeline

Compared to the total area of the portfolio of 2.7 million m², HIAG has an outstanding development pipeline with 58 projects and a potential usable space of around 727,000 m² (2019: 707,000 m²). The expected investment volume excluding future acquisitions totals around CHF 2.8 billion, of which approximately CHF 2.4 billion can be realised over the next ten years. Currently, three fully let properties with an annualised property income after completion of approximately CHF 6.3 million and an average contract term of 15.5 years are under construction. In addition, a further 11 development projects with a usable floor space of around 95,000 m² and expected investments of around CHF 300 million are to be realised in the next three to four years. After completion and full occupancy, these projects are expected to generate annualised rental income of around CHF 18 million and proceeds from the sale of condominium units of around CHF 72 million. The outstanding development pipeline is a good starting point for long-term above-average growth compared to the industry.

Outlook

In the 2021 financial year, HIAG is striving for a further increase in rental income, subject to unforeseeable market distortions. The vacancy rate in the existing portfolio is to be reduced again with intensive marketing activities. Furthermore, the planned project progress at various locations again offers potential for a positive effect from revaluations. In the future, HIAG also intends to continuously enhance the portfolio with acquisitions of appropriate properties with long-term cash flow and value enhancement potential. The current market environment will also be used for targeted disposals as part of the regular portfolio optimisation.

Selected key figures of HIAG

⁽¹⁾ Proposal of the Board of Directors to the Annual General Meeting of 22 April 2021

Annual Report, Results Presentation and Sustainability Report 2020

The HIAG Annual Report, the presentation of results and the Sustainability Report 2020 are available online at https://www.hiag.com/en/investors/reporting-centre/ .

Media presentation

On Monday, 15 March 2021, 9.00 a.m., Marco Feusi, CEO, and Laurent Spindler, CFO, will explain the 2020 annual results and answer questions during a conference call for media and analysts.

Conference Call

Please use the telephone numbers below to join the conference call:

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

England                                   +44 (0) 207 107 06 13

USA                                         +1 (1) 631 570 56 13

Webcast and replay

The presentation will be available as an audio webcast.

(https://78449.choruscall.com/dataconf/productusers/hiag/mediaframe/43399/indexl.html)

A replay will be available at the same link after the presentation.

Contacts

HIAG Immobilien Holding AG

Aeschenplatz 7

4052 Basel

T +41 61 606 55 00

investor.relations@hiag.com

www.hiag.com

Agenda

22 April 2021                Annual General Meeting 2021

27 August 2021            Publication ot the 2021 half-year results