Higher rental income, reduced vacancies and a further margin improvement during the first half-year 2020
* Rise in rental income by 42 percent to CHF 27.4m; on a like-for-like basis a 5.4 percent increase resulted
* Strong improvement of the operating margin through economies of scale after a successful integration of the 2019 acquisitions; increase in FFO I per share by 20 percent to CHF 0.50
* Decrease in vacancy rate by 12 percent to 8.2 percent
* Profit before taxes of CHF 17.1m
* Fully digitalised platform pays off in Covid 19 crisis
* Increase in the real estate portfolio to CHF 2bn planned in the short to medium term
Peach Property Group AG, an investor specializing in portfolio management in Germany with a focus on residential real estate, has been able to increase the rental income from its portfolio during the first half-year 2020 in the wake of the integration of last year’s acquisitions by around 42 percent to CHF 27.4m versus the comparable prior year period. The rental increase on a like-for-like basis (i.e. without the residential units taken over at the end of 2019 and during the first half-year 2020) reached a record value of 5.4 percent. Despite the Corona pandemic, Peach Property Group was able to significantly decrease vacancies during the first six months of 2020: the vacancy rate has dropped considerably since the end of 2019 by almost 12 percent to currently 8.2 percent of the apartments.
The acquisitions made in 2019 left a particularly positive mark during the first half of 2020: on the basis of a strongly risen residential portfolio, Peach Property Group was able to generate significant economies of scale with a disproportionately low increase in management and maintenance costs.
Increased market value of the portfolio, clear improvement of gross margin and FFO
Peach Property Group has been able to increase the market value of the investment properties to around CHF 1.1bn during the first half-year 2020; this corresponds to a 4.6 percent rise versus the end of 2019. Compared to the same prior year period, the value of the portfolio has grown by around 50 percent.
The first half of the year was, more particularly, marked by efficiency increases: as a result of a further in-sourcing of administration, letting and facility management, the introduction of an overarching SAP platform and the further expansion of digitalisation of small-scale maintenance, the expenditure from lettings rose merely by 10 percent to CHF 6.3 million versus the comparable prior year period. The gross margin rose accordingly from 71 percent to 77 percent. Personnel expenses likewise recorded a disproportionately low increase by 13 percent from CHF 5.1m to CHF 5.8 million at the end of the first half-year 2020. In this area the economies of scale are particularly obvious. The FFO I per diluted share, excluding one-off tax effects, improved by around 20 percent. In absolute terms the diluted FFO I adjusted for tax effects amounted to CHF 0.50 per share; this corresponds to an FFO (funds from operations) return of 2.3 percent on the IFRS NAV.
Peach Property Group achieved during the reporting period a profit before taxes of CHF 17.1m after CHF 25.4m during the first half-year 2019.
Considerable increase in NAV; LTV constant
The positive business development during the reporting period is also reflected by the NAV according to IFRS, which rose during the first half-year 2020 compared to the value at the end of the year by 2.6 percent to CHF 399.5m. The increase versus the prior year period amounted to 28.5 percent. The NAV IFRS per share has likewise gone up from CHF 35.1 during the prior period or CHF 43.3 at the end of the year to CHF 44.0 at the end of June 2020. For the full year Peach Property Group anticipates a further rise in the NAV per share. During the first half-year the LTV amounted to 59.9 percent and for the full year a target corridor below 60 percent is likewise aimed at.
Peach Property Group has entered into a purchase and sale agreement in July 2020 for the acquisition of a total of 5,450 new residential units, primarily in Nordrhein-Westfalen und Kaiserslautern. As a result, the portfolio will grow as at the closing of this acquisition at the end of the current year to around CHF 1.5bn. The new real estate portfolio generates actual annual rental income of around CHF 22m. The strategic acquisition enables Peach Property Group, moreover, to continue to significantly increase the FFO and allows the introduction of a sustainable dividend. In the short to medium term Peach Property Groups plans a further increase in investment properties to around CHF 2bn, which would correspond to a total of around 25,000 residential units. To further develop proximity to the tenants despite growth, another three Peach Points are set to open during the second half of 2020.
Dr. Thomas Wolfensberger, CEO, Peach Property Group AG: “The positive development of the first half-year 2020 shows that we have successfully continued to pursue our growth course. With the acquisition of the additional residential units in July, we are, moreover, able to significantly extend our portfolio again and strengthen the presence at our core locations. A major strategic asset for the success of Peach Property Group is our strongly digitalised business model which is geared to efficiency and tenant satisfaction. During the extraordinary phase of the lockdown we continued to be available for our tenants around the clock. Under this aspect our digital platform has perfectly proven its worth. We want to pursue our growth course, and the next target is a value of our portfolio of CHF 2bn.”
The detailed half-year report 2020 is available on the website of the Peach Property Group,http://peachproperty.com, under the section Investors/Publications or using the following link: https://www.peachproperty.com/en/investoren/publications/
Today at 10am CET an analyst and media conference call will take place in English with CEO Dr. Thomas Wolfensberger and CFO Dr. Marcel Kucher.
Dial-in data: +41 44 580 65 22 | PIN Code: 14683742#
The participants in the English conference call can retrieve the presentation under the following link (without audio signal):
At 2pm CET another conference call takes place in German, likewise with CEO Dr. Thomas Wolfensberger and CFO Dr. Marcel Kucher.
Dial-in data: +41 44 580 65 22 | PIN Code: 83122223#
The participants in the German conference call can retrieve the presentation under the following link (without audio signal):
Media, investors and analysts
Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
+41 44 485 50 00 | email@example.com
edicto GmbH, Axel Mühlhaus
+49 69 90 55 05 52 | firstname.lastname@example.org
About Peach Property Group AG
The 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 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. In the latter area, the Group focuses on A locations and properties with an attractive architecture and high level furnishing for an international clientele. The business activities of the Group cover the entire value chain, from site evaluation via acquisition to active asset management and the sale or letting of the 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