Highest earnings before taxes in the Group’s history, and significant strengthening of financial profile in 2021
Ad hoc announcement pursuant Art. 53 LR
* Highest earnings before taxes in the Group’s history of approx. CHF 258 million based on preliminary figures (previous year: CHF 153 million), which corresponds to more than CHF 15 per share on a diluted basis
* Rental income almost doubled from CHF 54.7 million to CHF 108 million while FFO I more than doubled from CHF 4.6 million to between CHF 10 million to CHF 11 million
* Real estate portfolio grows to more than 27 400 units compared with 23 200 in the previous year
* Market value of the real estate portfolio increases to more than CHF 2.6 billion and EPRA NTA increases to over CHF 67 per share
* LTV reduced from 57.8 percent to estimated, approximately 52 percent
* All external ratings improved in the reporting year
Peach Property Group AG, a real estate company focusing on investing and managing residential rental properties in Germany, continued its successful development in financial year 2021 based on preliminary, unaudited figures. At CHF 258 million, Peach Property Group achieved the highest earnings before taxes in its history, which corresponds to an increase of 69 percent compared to the previous year’s earnings before taxes of CHF 153 million. Rental income also almost doubled year-on-year from CHF 54.7 million to CHF 108 million in 2021, following acquisitions made in the reporting and previous year. FFO I of between CHF 10 million and CHF 11 million more than doubled compared to the previous year (CHF 4.6 million).
Growth strategy shows clear success and results in positive revaluations
As part of its growth strategy, Peach Property Group has expanded its real estate portfolio to more than 27 400 residential units compared with 23 200 in the previous year. Consequently, the total market value of the portfolio increased significantly to more than CHF 2.6 billion compared with CHF 2.1 billion at the end of 2020. In addition to economies of scale from the acquisitions, the positive earnings development is particularly attributable to the result from revaluations across the Group´s portfolio. These results demonstrate that the investment strategy, which focuses on Tier II cities located in the vicinity of German metropoles, where significant further valuation growth potential exists, paid off.
The net tangible asset value (NTA) according to EPRA standards is expected to approximate CHF 67 per share, compared to CHF 57.29 per share at the end of 2020.
Improvement in earnings and leverage reflected in all external ratings
During the course of the year, Peach Property Group AG successfully issued a 2.5 percent mandatory convertible bond of CHF 180 million, which was fully converted at the end of the year, further improving its equity base. The substantially strengthened equity base due to the mandatory convertible bond, and the annual result translated into a significantly lower loan-to-value ratio (LTV) of approximately 52 percent compared to 57.8 percent in the previous year.
In 2021, Peach Property Group also achieved an improvement in all external ratings. Moody’s Investors Service upgraded the corporate credit rating of Peach Property Group to “Ba2” with a stable outlook. FitchRatings had already upgraded the long-term issuer default rating (IDR) of Peach Property Group AG to “BB” with a stable outlook. The unsecured debt rating was raised to “BB+”, one notch below investment grade. S&P Global Ratings upgraded the long-term issuer rating to “BB-“/stable outlook. In the future, Peach Property Group will discontinue the use of a third rating agency for efficiency and focus on two rating agencies only.
Positive start to the year 2022 and further development of sustainability strategy
For the current financial year 2022, Peach Property Group expects a continued positive business development. Investments in the modernization of the real estate portfolio will be increased to over CHF 70 million in the current financial year, following approx. CHF 45 million in 2021, which will aid the further reduction of vacancy. In 2022, activities will further focus on the continued development of the sustainability strategy. In this context, the Group will present its decarbonization strategy in spring 2022.
Dr. Thomas Wolfensberger, CEO of Peach Property Group AG, said: “Our strategy and business model continued to excel in the 2021 financial year, enabling us to close another year of very profitable growth. Accordingly, over the past two years – from December 19 to December 21 – we have outperformed both the SPI index as well as EPRA Germany. In comparison to our peer group, we showed the most consistent performance. We want to continue to systematically develop our strategy of value-creating growth in 2022. The focus will be on modernizing the real estate portfolio and expanding sustainability activities. By this means, we are paving the way for further growth, and creating value for our tenants, shareholders and employees.”
“We were able to further significantly strengthen our financial profile in financial year 2021, which was reflected in the improvement of all external ratings. We aim to further reduce interest expenses annually by a mid- to high single-digit million amount in the future and are working on various refinancing options. This will give us room for maneuver as well as for further growth. We will significantly expand investment in the real estate portfolio and thus increase its value, from which the leverage is expected to remain largely unaffected. The solidity of our financial profile remains our top priority, and we are aiming for an LTV of below 50 percent in the medium term,” added Thorsten Arsan, CFO of Peach Property Group AG.
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About Peach Property Group AG
The Peach Property Group is a real estate investor and developer with an investment focus in Germany. The Group stands for many years of experience, competence and quality. Innovative solutions for state-of-the-art living needs, strong partnerships and a broad value chain round off the profile. The portfolio consists of high-yield portfolio properties, typically in B-cities in the catchment area of conurbations. In addition, the Group develops real estate for its own portfolio or for condominium marketing. In the latter area, the Group concentrates on A locations and properties with attractive architecture and upscale furnishings for an international clientele. Its activities span the entire value chain from evaluating locations through to acquisitions and also active asset management and property sales or lettings.
Peach Property Group AG has its registered office in Zurich and the Group is headquartered in Cologne. Peach Property Group AG is listed on SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati, Kurt Hardt and Klaus Schmitz.