Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Swiss Prime Site AG (XSWX:SPSN, Financial) reported a significant increase in rental income, reaching a record high of 464 million, marking a growth of almost 6%.
- The company achieved a substantial reduction in vacancy rates, reaching a record low of 3.8%, with a medium-term goal of reducing it further to 3%.
- Asset management showed excellent growth, with yields increasing by 42.5% and capital increases and contributions in kind totaling over 600 million.
- The company maintained a stable property portfolio value of 13.1 billion despite selling 45 million worth of real estate.
- Swiss Prime Site AG (XSWX:SPSN) plans to propose a dividend increase to 3.45 CHF, reflecting strong financial performance and shareholder returns.
Negative Points
- The retail segment experienced a decline, with a turnover decrease of 1.7%, reflecting challenges in the retail market.
- The company faced higher interest expenses, increasing by 11% to around 62 million, impacting overall financial costs.
- Despite the positive outlook, geopolitical uncertainties and complex market conditions pose challenges for future growth.
- The company anticipates a decrease in FFO due to the loss of rental income from the Elmo property, impacting future dividend payouts.
- The process of obtaining building permits and meeting sustainability criteria has become more complex, potentially delaying project developments.
Q & A Highlights
Q: What is the outlook for transactions in 2025, and what types of properties are you focusing on?
A: (Anastasiia, Asset Management) Business is accelerating across residential, commercial, and office markets. We have a strong pipeline and expect institutional investors to return. (Unidentified_1) For the real estate company, we are optimistic about finding interesting opportunities, particularly in office spaces, as interest rates are expected to decrease, making the first half of the year promising.
Q: Why did the total funding cost increase despite a decrease in average interest rates?
A: (Unidentified_2) The increase is due to additional funding for the acquisition of Fundamenta, which increased the base, and the average rate was slightly higher than in 2023. However, we expect stability or a decrease in rates moving forward.
Q: What are the plans for the remaining properties marked for sale, and what is the expected impact on retail share?
A: (Unidentified_1) We plan to sell a mix of retail and office properties, marked in red, and expect a small profit. This will slightly reduce the retail share from the current 19.8%.
Q: Can you provide an update on the Mullerstrasse project?
A: (Unidentified_1) We are already receiving rent, but tenants have not moved in yet. They have filed a building application for renovation, but it is unclear if they will occupy the space themselves.
Q: How much of the revaluation is related to developments versus the existing portfolio?
A: (Unidentified_2) Approximately CHF 15 million is related to developments. The revaluation is driven by higher rents and lower vacancy rates, with the discount rate remaining unchanged.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
