Zurich, 6 April 2011 – Peach Property Group Ltd, a leading developer of high-quality residential property in German-speaking Europe, has recorded a total operating income of CHF 84.4 million for the 2010 financial year, compared with CHF 28.5 million the previous year. The main factors in the leap in operating income are proceeds from property development in Germany, amounting to CHF 44.9 million, and other operating income of CHF 37.2 million.
Reflecting this much higher operating income, operating profit (EBIT) also increased by 20% in 2010, amounting to CHF 21.3 million (2009: CHF 17.8 million). Despite a negative impact of CHF -2.9 million attributable to the Swiss franc’s appreciation against the euro, Peach Property Group Ltd recorded a net income of CHF 18.0 million in the 2010 financial year: a result level with the previous year and representing a diluted profit of CHF 6.03 per share.
Portfolio value tops 250-million mark
According to independent property appraiser Wüest & Partner, the market value of the portfolio managed by Peach Property Group Ltd stood at CHF 264.5 million at 31 December 2010. Of this, CHF 149.5 million was attributable to projects in Germany, accounting for 56.5% of the total. Projects in Switzerland are valued at CHF 110.2 million (41.7%), while CHF 4.8 million is attributable to projects in Austria (1.8%). The three largest projects are: ‘Harvestehuder Weg 36’ in Hamburg, with a year-end value of CHF 62.5 million; ‘Peninsula Beach House’ in Wädenswil, worth CHF 55.1 million; and ‘yoo berlin’ in Berlin, with a year-end value of CHF 45.5 million.
According to this independent estimate of the development portfolio’s market value, Peach Property Group Ltd’s net asset value (NAV) at the end of 2010 amounted to CHF 146.5 million. Based on IFRS principles, which require valuations of properties at procurement or production cost, the company’s NAV amounts to CHF 112.5 million, up from CHF 34.9 million at the end of 2009.
Sound equity base
The IPO in November 2010 resulted in an inflow of CHF 55.2 million to Peach Property Group Ltd. One use of these proceeds has been to reduce long-term borrowing which, in turn, reduces financial expenses. As of 31 December 2010, shareholders’ equity rose to CHF 112.5 million (previous year: CHF 34.8 million). As of 31 December 2010, Peach Property Group Ltd has an equity ratio of 53%, or 57% based on market NAV.
Development projects progressing according to plan
Peach Property Group Ltd made excellent progress with its various development projects in the 2010 financial year. In Switzerland, mention should be made of initial sales of the exclusive condominiums at ‘Peninsula Beach House’, which boast a lakeside position on Lake Zurich in Wädenswil. Total target sales volume for the ‘Peninsula Beach House’ project amounts to CHF 102 million. At the end of the year, Peach Property Group Ltd was able to complete its first project in Germany on schedule. ‘Living 106’, in Berlin, comprises 76 apartments and represents a sales volume of CHF 27 million. The riverside ‘Schlossuferresidenz’ project in Düsseldorf was sold for EUR 18.65 million after obtaining planning permission. In Berlin, the company acquired a majority shareholding in the ‘Am Zirkus 1’ project.
Target sales volume here is CHF 77 million. The 311-room hotel, with 5,500 square metres of commercial space, is housed in the same building in which Peach Property Group Ltd is completing its ‘yoo berlin’ project, with 87 residential units. Sales of these apartments are progressing well and, by the end of 2010, had already reached CHF 30 million of the target CHF 104 million sales volume. Another component of the successful expansion in Germany was the ‘Harvestehuder Weg 36’ project, in Hamburg’s high-class district on the Aussenalster Lake. The first stage of construction commenced in February 2011. The total target sales volume amounts to CHF 106 million.
Dr. Thomas Wolfensberger, CEO of Peach Property Group Ltd, commented, ‘Peach Property Group Ltd passed major milestones in its development projects during 2010. This shows, firstly, that we are positioning our projects appropriately, completing them on schedule, and marketing them successfully. Secondly, it shows that we are now also established in Germany as a leading luxury property developer.’
Predictable dividend policy
The Board of Directors is proposing to the annual general meeting on 6 May 2011 to distribute a dividend of CHF 1.00 for the 2010 financial year. This corresponds to a dividend yield of 3.2%, as of the year-end. This distribution percentage is in line with the dividend policy of Peach Property Group Ltd, which seeks to pay shareholders a regular, stable dividend distinctly above long-term money market interest rates. The pay-out will be distributed in form of a tax-favourable capital repayment.
Membership changes on the Board of Directors
Directors Dr. Peter Saemann and Norbert Ketterer will not be standing for re-election at Peach Property Group’s annual general meeting on 6 May 2011. The new candidate for election is Dr. Christian de Prati. He has a successful 20-year track record in investment banking and served as Country Head Switzerland at Bank of America Merrill Lynch until January 2011. Dr. Christian Wenger, Peter Bodmer, Christian Kühni and Dr. Thomas Wolfensberger are standing for re-election.
Prospects for 2011
Buoyed by strong economic conditions, the positive demand and price trends in residential property look set to continue through 2011 in both Germany and Switzerland. With its projects well positioned in the top market segment, Peach Property Group Ltd should benefit from these trends. The company expects continued rewarding sales progress at all sites. Peach Property Group Ltd will concentrate on driving its existing projects forward as scheduled during 2011. Parallel to this, it will embark on new projects which, in turn, will further diversify its development portfolio.