Half-year results 2021 - HIAG continues growth course

Ad hoc announcement pursuant to Art. 53 LR

• Net income increased to CHF 41.9 million
• Annualised property income increased by 9.4% to CHF 65.7 million
• Vacancy rate in the overall portfolio further reduced by 2.4 percentage points to 10.8%
• Remaining lease term (WAULT) extended to a comfortable 8.1 years
• Real estate portfolio expanded to CHF 1.78 billion
• Fixed-rate bond of CHF 160 million placed
• EGM on 29 September 2021 with proposals for a capital increase and the election of an additional Member of the Board of Directors

HIAG got off to a good start in the fiscal year 2021 and, with a net profit of CHF 41.9 million (H1 2020: CHF 22.1 million), achieved the best half-year result since the IPO in May 2014. With a 9.4% increase in annualised property income to CHF 65.7 million (31 December 2020: 60.0 million) and a decline in the vacancy rate in the yielding portfolio to 9.7%, HIAG remains on track for growth.

Successful first half-year
All areas of business met or exceeded targets in the first half of fiscal 2021. Property income as well as portfolio value and revaluation gains increased significantly. Annualised property income increased by 9.4% to CHF 65.7 million (31 December 2020: 60.0 million). Before acquisitions and the sale of one property, the increase amounted to 3.5%. At CHF 30.6 million, collected property income exceeded the previous year's figure by 4.0% (H1 2020: CHF 29.5 million). Net income increased to CHF 41.9 million (H1 2020: CHF 22.1 million). Earnings per share (EPS) were CHF 5.04 (H1 2020: CHF 2.76) and profit before revaluations and deferred taxes was CHF 14.0 million (H1 2020: CHF 8.3 million). The positive effect from revaluations increased to CHF 32.2 million (H1 2020: CHF 17.7 million), mainly due to the three property acquisitions realised in the first half of the year as well as new contracts signed and progress made in development projects. At 3.64% (31 December 2020: 3.73%), the weighted average discount rate of the overall portfolio was slightly lower. As expected, HIAG Data's negative contribution to earnings of CHF -0.2 million was significantly lower than in the previous year (H1 2020: CHF -2.8 million). And with the sale of the entire production facility of the former Rohner AG Pratteln, including the building, the property in Pratteln made a positive contribution to the operating result of CHF 1.7 million (H1 2020: CHF -2.7 million). The vacancy rate across the entire portfolio was reduced by 2.4 percentage points to 10.8% and in the yielding portfolio to 9.7% (31 December 2020: 13.0%). At 3.7%, the net yield of the existing portfolio remains at an attractive level. HIAG still has a comfortable weighted average remaining lease term (WAULT) of 8.1 years (31 December 2020: 7.9 years).

Minor effect of the Corona pandemic
As in fiscal 2020, HIAG recorded only a minor impact on earnings from the Corona pandemic in the first half of fiscal 2021 thanks to good portfolio and tenant diversification and active portfolio management. Once again, HIAG granted rent reductions totalling CHF 0.2 million to individual tenants in the gastronomy and leisure sectors that were particularly affected by the lockdown.

Sound capital structure
Notwithstanding the distribution of a dividend for fiscal 2020 of CHF 19.3 million, equity increased by CHF 23.9 million and amounted to CHF 785.0 million on 30 June 2021 (31 December 2020: CHF 761.1 million). The equity ratio corresponded to 42.7% (31 December 2020: 45.0%). At CHF 93.51 per share, the NAV after deferred taxes exceeded the value as at 31 December 2020 by 3.1%. The loan-to-value ratio (LTV) increased to 51.0% as at 30 June 2021 (31 December 2020: 48.7%) mainly due to the acquisitions as well as the dividend distribution. The weighted average lease term of debt was 1.3 years at the end of June 2021 (31 December 2020: 2.0 years) and increased to 2.4 years with the seamless refinancing of the fixed-rate bond at the beginning of July 2021. The average interest rate on financial liabilities remained unchanged at a low level of 0.9% (H1 2020: 0.9%). The comparison between the cost of debt of 0.9% and the net yield of 3.7% achieved on the yielding portfolio shows a still attractive interest spread of 2.8%.

Considerable increase in portfolio value
At the end of June 2021, the total portfolio consisted of 118 properties. The portfolio value increased by 8.7% to CHF 1.78 billion in the reporting period (31 December 2020: 1.64 billion). The weighted average discount rate of the entire portfolio decreased slightly to 3.64% (31 December 2020: 3.73%). At the end of June 2021, HIAG's development portfolio consisted of around 60 projects with a usable floor space of approximately 756,000 m² (31 December 2020: 727,000 m²). The expected investment volume excluding further acquisitions is around CHF 2.86 billion, of which around CHF 2.48 billion is to be realised in the next ten years. Twelve development projects with a usable floor space of 102,000 m² and an expected investment volume of around CHF 340 million are planned for the next three to four years. After completion and full occupancy, these projects are expected to generate annualised property income of around CHF 20 million and sales proceeds from promotion projects of CHF 72 million. Two fully let properties with an annualised property income after completion of CHF 5.4 million and an average contract term of 15 years are currently under construction.

Increase in capital planned
Subject to the approval of the Extraordinary General Meeting (EGM) on 29 September 2021, the Board of Directors of HIAG Immobilien Holding AG intends to carry out a capital increase with a subscription rights offer for existing shareholders, which is expected to take place in the fourth quarter of 2021. Further information will be communicated with the invitation to the EGM. The proceeds of the planned capital increase will be used to finance projects, to reduce debt financing and to realise favourable purchase opportunities for properties that enhance the HIAG portfolio with long-term cash flow and value enhancement potential.

Election to the Board of Directors
The Board of Directors of HIAG Immobilien Holding AG will propose to the EGM on 29 September 2021 to elect real estate specialist Anja Meyer (CH) as an additional member of the Board of Directors. Anja Meyer (*1967) is owner and delegate of the Board of Directors of smeyers Holding AG, which is active in real estate consulting and site redevelopment. She holds the diploma "Intensivstudium KMU-HSG" and a commercial school diploma from the Kantonsschule Luzern.

Sustainability shapes operations
In the mid-term, HIAG aims to achieve sustainable operations that exceed the industry average. HIAG is already making consistent use of the technological possibilities for realising energy-efficient buildings and reducing CO₂ emissions in its real estate portfolio. In parallel, the production capacities for renewable energies will be increased systematically across the entire real estate portfolio. The joint venture HIAG Solar, launched at the beginning of 2021, will have three newly installed photovoltaic systems on HIAG properties with a total output of 1 MWp in operation by the end of fiscal 2021. With a planned module area of around 65,000 m² and an output of around 10 MWp, HIAG Solar is aiming to become a major solar power producer in Switzerland in the medium term. The sustainability report (ESG), published for the first time in fiscal 2020, will be continuously increased and will be based on the Global Reporting Initiative (GRI) standard starting in the 2021 reporting year. The United Nations Sustainability Goals (SDGs), which are already recognisable in many of HIAG's developments, also remain important benchmarks.

Market and outlook
The Swiss real estate market has proven to be extremely robust during the turbulence of the past months. Investor demand for residential properties, office properties in prime locations or special properties such as logistics properties has remained high in recent months, and the economic recovery, particularly in the second sector, has led to additional demand for commercial and logistics space. In this context, and subject to unforeseeable market turbulence, HIAG is aiming for a 3% increase in collected property income in the second half of 2021, a 9% increase in annualised property income compared to the previous year, and a further reduction in the vacancy rate in the existing portfolio. In addition, there is potential for positive revaluation effects at various locations due to significant progress in development projects. Furthermore, HIAG intends to take advantage of the current market environment for targeted disposals of non-strategic properties with corresponding surpluses as part of its continuous portfolio optimisation.

Key figures

Half-year report 2021
HIAG will publish the half-year report 2021 with the letter to shareholders and the CFO's report on 27^th August 2021 on the Company's Website in the Reporting Center.

Conference call and Webcast
On Friday, 27 August 2021, 9.00 a.m. (CEST), Marco Feusi, CEO, and Laurent Spindler, CFO, will explain the 2021 half-year results and answer questions during a conference call with webcast for media and analysts.

The following numbers are available to participate in the conference call:

• Switzerland/Europe +41 (0) 58 310 50 00
• UK +44 (0) 207 107 06 13
• USA +1 (1) 631 570 56 13

A live webcast of the presentation is available at the following link (listen only):
https://78449.choruscall.com/dataconf/productusers/hiag/mediaframe/45977/indexl.html
A replay of the webcast will be available after the presentation at the same link.

About HIAG
HIAG is a leading real estate company listed on the SIX Swiss Exchange that has a real estate portfolio with a total value of CHF 1.8 billion. Compared to the total area of the real estate portfolio of 2.7 million m², HIAG has an outstanding development pipeline of around 756,000 m² with 61 projects and an expected investment volume of around CHF 2.9 billion. The portfolio comprises 45 sites with well-developed office, commercial and logistics properties as well as selected residential properties in future-oriented growth regions of German and French-speaking Switzerland. HIAG generates a stable rental income from its real estate management activities and and creates long-term value potential through active portfolio management and the development of attractive destinations.

Disclaimer
This media release serves informational purposes and constitutes neither an offer to sell nor a solicitation or an advertisement to buy any shares of HIAG Immobilien Holding AG in any jurisdiction. This media release does not constitute a prospectus within the meaning of Article 35 et seqq. of the Swiss Federal Act on Financial Services. Investors should base their decision to purchase or execute subscription rights or to purchase shares of HIAG Immobilien Holding AG exclusively on the official prospectus, which will be available electronically and free of charge after publication. The shares described in the prospectus will publicly be offered in Switzerland only. In addition, investors should seek advice from their bank or their financial adviser. This media release and the information contained therein are not being issued in the United States of America, Australia, Canada, Japan, the United Kingdom, or the European Economic Area and must not be distributed within or to such countries or via publications with a general circulation in such countries.

This media release contains forward-looking statements such as projections, forecasts, and estimates. Such forward-looking statements are subject to certain risks and uncertainties which may cause actual results, performance, or events to differ materially from those anticipated in this media release. The forward-looking statements contained in this media release are based on the views and assumptions of HIAG Immobilien Holding AG as of this date and HIAG Immobilien Holding AG does not assume any obligation to update or revise this media release.