Zug Estates Holding AG
Pleasing results for first of half 2024 thanks to almost fully let portfolio
Zug Estates Holding AG / Key word(s): Half Year Results/Real Estate Ad hoc announcement pursuant to Art. 53 LR
Zug Estates recorded a pleasing increase in net income in the first half of 2024. Demand for attractive, well-connected rental space remains intact given Zug’s dynamic growth as a place to live and work, coupled with limited supply. Together with the large number of rental successes seen in the previous year, this led to a significantly lower vacancy rate and an increase in property income. The changed interest rate situation following the two cuts in key interest rates by the Swiss National Bank had a favourable impact on the financing environment in the first half of 2024; this led to a better-than-expected financial result and had a positive effect on real estate values. Net income increased by a substantial CHF 26.3 million year on year, from CHF 1.9 million to CHF 28.2 million; this was attributable to a positive revaluation result compared with the first half of 2023. After adjustment for revaluation and special effects, net income showed a slight increase of CHF 0.1 million or 0.4%, from CHF 18.0 million to CHF 18.1 million. Higher property income, but subdued demand for hotel rooms In the hotel & catering segment, on the other hand, larger companies are currently taking a cautious approach to the booking of business travel and events. This led to a reduction in hotel & catering income of CHF 0.4 million or 5.5%, from CHF 8.1 million to CHF 7.7 million. Gross operating profit (GOP) fell from 42.3% to 37.8% following the expansion of the catering offering – which is characterised by lower margins than the hotel business – in 2023. In total, operating income rose by CHF 0.5 million or 1.2%, from CHF 42.9 million to CHF 43.4 million. Operating expenses increased only slightly by CHF 0.1 million or 0.6% from CHF 15.7 million to CHF 15.8 million. Higher portfolio value A total of CHF 3.5 million was invested in the portfolio in the period under review. This compares with the previous year’s figure of CHF 22.8 million, the bulk of which was attributable to the acquisition of additional co-ownership shares in Miteigentümerschaft (MEG) Metalli. Solid equity ratio The already very solid equity ratio as at 30 June 2024 was unchanged at 54.9%. As no major loans became due for extension, the average residual maturity of loans fell from 3.5 years as at 31 December 2023 to 3.0 years as at 30 June 2024. The average interest rate was unchanged at 1.5%. Significant reduction in vacancy rate Together with the numerous rental agreements concluded in the previous year, the leases agreed in the reporting period led to a significant reduction in the vacancy rate. The vacancy rate fell from 3.9% as at 31 December 2023 to a very low 0.7% as at 30 June 2024. The weighted average unexpired lease term (WAULT) of 6.1 years (6.5 years as at 31 December 2023) remained at a very high level for the industry. New retail and catering options at City Centre site In addition, the comprehensive refurbishment of the listed Bären property – which has been underway since April 2023 – is nearing completion. Within this classical building, Tibits AG is set to open its first venue in Zug at the end of August 2024. Start of construction on final Suurstoffi plot at end 2024 Building work is due to commence at the end of 2024, with leased spaces likely to be handed over to future tenants from mid-2027. The residential space for student living will be leased and operated by Lucerne University of Applied Sciences and Arts Marketing has begun for the office and education space, and talks are underway with parties interested in the attractive, versatile rental space at the two buildings. Metalli Living Space development In view of the consequences of the initiative, Zug Estates has already decided against pursuing the Bergli development plan and will instead focus on the plan for Metalli. The basis of the project is currently being reviewed in consultation with the City of Zug, with changes being made to the development plan to ensure implementation of the initiative. The aim is to finalise this work by the end of 2024 so as to ensure that – in the event of a decision to continue with the project – the political process for implementation of the Metalli development plan can begin in the first half of 2025. Suurstoffi site awarded DGNB Platinum Certificate Positive outlook for 2024 For the hotel & catering segment, we expect total income to be roughly on a par with the previous year’s level despite a fall in demand on the part of larger companies. The GOP margin is likewise expected to be in line with the previous year’s figure. All in all, we continue to expect net income excluding revaluation and special effects for the 2024 financial year of over CHF 35 million. Publication of Half-Year Report on 22 August 2024 Please register for the conference via the following link. We look forward to seeing you. https://zugestates.ch/en/stories/video-conference-for-analysts-and-media-on-the-2024-half-year-results The detailed Half-Year Report and the presentation for the video conference can be found on our website: https://zugestates.ch/en/downloads Important dates:
For further information, please contact:
About Zug Estates Zug Estates Holding AG | Baarerstrasse 18 | CH-6300 Zug | T +41 41 729 10 10 | www.zugestates.ch End of Inside Information |
Language: | English |
Company: | Zug Estates Holding AG |
Industriestrasse 12 | |
6300 Zug | |
Switzerland | |
Phone: | +41 41 729 10 10 |
E-mail: | ir@zugestates.ch |
Internet: | www.zugestates.ch |
ISIN: | CH0148052126, CH0148052118 |
Valor: | A1J0M6 |
Listed: | SIX Swiss Exchange |
EQS News ID: | 1972725 |
End of Announcement | EQS News Service |