Real estate portfolio reaches record level of CHF 793 million – Rental income rises by 40% to CHF 19 million in H1 2019
> Significant increase in market value of real estate portfolio and rental income thanks to acquisitions and advances in investment properties in the first six months of 2019
> Expansion of the investment property portfolio to 8,775 residential units with annualised target rent of CHF 46.4 million
> Investments in residential portfolios of CHF 8.7 million in the first half of 2019
> Vacancies further reduced by 11 percent to 10.7 percent of residential units
> Additions to tenant services, opening of new tenant shops
> Profit before taxes at a solid CHF 25 million and after taxes at around CHF 22 million
> IFRS equity increased to CHF 311 million from CHF 301 million at the end of 2018
Peach Property Group, an investor specializing in portfolio management in Germany with a focus on residential real estate, has increased the market value of its real estate portfolio in the first half of 2019 to a new high of slightly more than CHF 793 million thanks to increased investments in the real estate portfolio. Compared with the end of the first half of 2018, this is an increase of a good 35 percent, and more than 6 percent compared with the end of 2018. At CHF 19.3 million, rental income in the period under review was around 40 percent higher than the CHF 13.8 million recorded in the comparative period. Annualized target rent increased by 6 percent to CHF 46.4 million compared with the end of 2018. This increase was achieved by expanding the investment portfolio, progressing the renovation of apartments and reducing vacancies. At the same time, the share of the development properties was further reduced as planned with the handover of apartments and the completion of projects.
Expansion of the real estate portfolio, progress in renovation and reduction of vacancies
In the first six months of 2019, Peach Property Group expanded its real estate portfolio to 8,775 units with a total rental area of around 600,000 square metres through the purchase of 421 apartments. This corresponds to an increase of 4 percent compared with the end of 2018. The residential portfolio in the Kaiserslautern region was expanded by 200 apartments to more than 1,350 units. In addition, ownership of 221 apartments in Marl, North Rhine-Westphalia, was transferred at the beginning of 2019.
Additionally, Peach Property Group invested almost CHF 9 million in modernising its real estate portfolio in the first half of 2019. 376 apartments were refurbished, more than twice as many units as in the same period last year. As a result of this and increased letting activities, Peach Property Group was able to reduce the number of unlet apartments by around 11 percent to 940 units or 10.7 percent of the portfolio. Of these, 127 units have been reserved or leases have already been signed, 129 units are being marketed and a further 128 apartments are currently being renovated. The remaining 556 vacant apartments represent the current letting reserve and will be successively refurbished and marketed in the coming quarters.
Expansion of tenant services – efficiency further increased
Peach Property Group further expanded its services for tenants in the first half of 2019, thereby increasing tenant satisfaction. In addition to the stores in Oberhausen and Heidenheim a tenant shop, Peach Point, has now also been opened in northern Hesse. Further tenant shops are planned for the second half of the year in Minden (Bielefeld) and Kaiserslautern. Peach Property Group already manages more than half of its portfolio, a total of over 4,800 apartments, through its own tenant shops in central city centre locations. After the opening of the two new stores, the figure will rise to 85 percent.
Peach Property Group also successfully increased its efficiency. The further insourcing of the portfolio administration resulted in the reduction of direct administration costs from 13.2 percent to 9.4 percent of actual rents.
Pre-tax profit at CHF 25 million – equity at CHF 311 million
Peach Property Group recorded a profit before taxes of CHF 25.4 million and after taxes of CHF 22.3 million in the reporting period. With the completion of the “Wollerau Park” project and hand-overs of the last apartments in the projects in Berlin and Rorschach, all development projects have been finalized except for the “Peninsula” in Wädenswil, Switzerland. As expected, the volume of income from development projects was substantially lower than in the same period of the previous year at CHF 7.3 million compared to CHF 21.9 million in H1 2018, along with a correspondingly lower contribution to earnings. In the first half of 2018, pre-tax profit amounted to CHF 30.7 million and after-tax profit to CHF 26.5 million.
Equity rose from CHF 301.3 million at the end of 2018 to CHF 310.9 million at the end of the first half of 2019. Due to the significant increase in total assets by a good 4 percent to CHF 857 million, the equity ratio (NAV at market values) as at 30 June 2019 was 37.1 percent, slightly below the level of 37.7 percent at the end of 2018.
For the remainder of 2019 Peach Peach Property Group is focusing on continuing its renovation work, and thus further reducing vacancies as well as expanding its tenant services. All apartments in the portfolio shall be managed by the Group itself by the end of 2019 in order to further optimize operating processes and increase efficiency. In addition, numerous purchase portfolios are under review in order to expand the investment portfolio to the medium-term target of 11,000 apartments.
Dr. Thomas Wolfensberger, Peach Property Group’s CEO, commented: “Peach Property Group has once again enjoyed substantial growth in the first six months of the year. We were able to increase the value of our portfolio through targeted investments in renovation, the reduction of vacancies and the purchase of additional portfolios. In addition, we further expanded our management platform and opened an additional Peach Point. The direct contact with our tenants and a high degree of digitisation in asset and property management mean that we can ideally combine customer satisfaction with efficiency. We will consistently continue along this path and are well prepared for our further growth.”
The 2019 semi-annual report can be downloaded from the Investor Relations section of Peach Property Group’s Web site, http://peachproperty.com, using the following link: http://peachproperty.com/investoren/publikationen/
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Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
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About Peach Property Group AG
Peach Property Group is a property investor and developer focused on investments in Germany. The Group stands for long time experience, competence and quality. Innovative solutions for modern housing needs, strong partnerships and a wide value chain complete the profile of the Group. The portfolio consists of an increasing number of high yield investment properties, typically in B-cities in close reach to metropolitan areas. In addition, the Group develops properties for its own portfolio or for the sale as condominium. Developments for sale focus on A-locations and encompass attractive architecture and high level furnishing for an international clientele. The business activities of the Group cover the entire value chain, from property acquisition and site selection to active asset management and finally to the sale or lease of properties.
Peach Property Group AG is headquartered in Zurich and has its German Group headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati and Kurt Hardt.
For more information, see http://peachproperty.com