Psp Swiss Property Ag · SIX:PSPN
Psp Swiss Property — Q1 2024 Earnings Presentation
62 slides from Psp Swiss Property's earnings presentation, May 7, 2024
Slide 1: Quarterly results Q1 2024
Quarterly results Q1 2024 7 May 2024
Slide 2: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 2
Slide 3: Property Portfolio (March 2024)
Property Portfolio (March 2024) Portfolio value CHF 9.6bn (162 investment properties, two sites & eight projects) Zurich Basel CHF 5.7bn CHF 0.6bn 59% 7% Bern Projects CHF 0.6bn 6% “Hochstrasse”, Basel “TEC”, Basel “Hôtel des Postes”, Lausanne Other locations “Richtipark”, Wallisellen Lausanne CHF 0
Slide 4: Current Market Environment
Current Market Environment Swiss market environment − Market for prime office properties in Swiss main markets healthy − Good business sentiment in our key markets Zurich and Geneva − Solid demand for letting office space at prime locations − In secondary locations demand continues to be weak − Stab
Slide 5: Main Developments
Main Developments Real estate portfolio − Portfolio value CHF 9.6bn (up 0.4% compared with December 2023) − Last disposal at “Residenza Parco Lago” in Lugano/Paradiso, CHF 3.5m Vacancy and rental situation − Vacancy rate of 4.1% (December 2023: 3.6%) − Of all 2024 maturities (CHF 31.3m), 14% open −
Slide 6: Main Developments
Main Developments Financing − Low leverage with LTV of 34.1% (December 2023: 35.4%) − Low passing average cost of debt 1.01% (December 2023: 0.91%) − Weighted average loan maturity of 4.5 years, Ø fixed-interest period of 4.0 years (December 2023: 4.7 years, 3.9 years) − Green finance approach, all
Slide 7: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 7
Slide 8: Key Figures
Key Figures Consolidated, in CHF m 2022 2023 Q1 2023 Q1 2024 ∆1 Ebitda excl. ∆-RE2 293.8 297.7 69.9 76.7 9.8% Net income excl. ∆-RE2 235.7 339.2 56.3 56.6 0.6% Net income 330.0 207.6 57.0 81.0 42.0% Rental income 316.2 331.9 81.1 89.2 9.9% Per share, in CHF 2022 2023 Q1 2023 Q1 2024 ∆1 EPS 7.19 4.53
Slide 9: Consolidated Income
Consolidated Income in CHF 1’000 2022 2023 Q1 2023 Q1 2024 ∆ Rental income 316’231 331’905 81’135 89’182 9.9%3 Valuation gains 124’886 -161’261 0 31’210 Property sales revenues (condominiums) 25’181 14’012 938 568 Property sales (investment properties) -447 910 910 0 Capitalised own services 3’753 4
Slide 10: Consolidated Expenses
Consolidated Expenses in CHF 1’000 2022 2023 Q1 2023 Q1 2024 ∆ Properties’ operating expenses -11’169 -11’372 -2’755 -2’963 7.5% Properties’ maintenance/renovation -16’859 -14’291 -3’437 -3’287 -4.4% Personnel expenses -20’390 -20’604 -4’783 -5’003 4.6% General and administrative expenses -8’030 -8’
Slide 11: Consolidated Results
Consolidated Results in CHF 1’000 2022 2023 Q1 2023 Q1 2024 ∆ Profit before financial expenses 415’778 136’140 70’458 107’706 52.9% Net financial expenses -11’560 -22’886 -3’617 -7’968 120.3% Profit before taxes 404’219 113’255 66’841 99’738 49.2% Taxes -74’2591 94’3402,3 -9’8174 -18’7485 Net income
Slide 12: Per Share Distribution (in CHF)
Per Share Distribution (in CHF) 5.00 4.00 3.80 3.85 3.75 3.60 3.65 3.50 3.35 3.40 3.25 3.25 3.30 3.20 3.00 3.00 2.80 2.70 2.50 2.40 2.20 2.10 1.98 2.00 1.65 1.50 1.25 1.00 1.00 0.00 Business year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Slide 13: Share Price, rebased
Share Price, rebased PSP SPI Index SMI Index EPRA Index 450 400 350 PSP 300 SPI Index 250 200 150 SMI Index EPRA Index 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Bloomberg, 6.5.2024. © PSP Swiss Property 13
Slide 14: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 14
Slide 15: Portfolio & Vacancy Rate
Portfolio & Vacancy Rate 10 9.6 9.7 9.6 9.6 10% 9.2 9.3 9.4 9.4 9.4 9 9% 8 8% 7 7% 6 6% 5 5% 4.1% 4 3.5% 3.7% 3.6% 4% 3.1% 3.0% 3.2% 3.2% 3.2% 3 3% 2 2% 1 1% 0 0% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Real estate portfolio value in CHF bn. Vacancy rate in % (CHF). ©
Slide 16: Largest Vacancies (March 2024)
Largest Vacancies (March 2024) Vacancy Vacancy Contribution Actions taken Properties (sqm)1 rate in %-points (vacancy incl. letting success) Grubenstrasse 6, 8, Zurich 11’172 88.8% 0.9% New leases starting Q2 and Q4 2024 (56.7%) Peter Merian-Strasse 88, 90, Basel 3’401 30.2% 0.3% Letting in progress
Slide 17: Expiry Profile of Leases (March 2024)
Expiry Profile of Leases (March 2024) (Legal termination option by tenants) 20% 18% 18% 16% 14% 15% 12% 12% 10% 11% 11% 8% 6% 6% 6% 4% 4% 5% 5% 2% 4% 4% 0% 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034+ NL 74% of the Q2-Q4 2024 maturities (CHF 19.1m) are renewed (of the overall 2024 maturit
Slide 18: Changes in Fair Value (March 2024)
Changes in Fair Value (March 2024) (CHF m) 2022 2023 Q1 2024 Existing portfolio 124.1 -167.11 31.23 Acquisitions / first-time valuation 0.8 5.82 0.0 Total net changes in fair value 124.9 -161.3 31.2 1 Of which: Q2 2023: CHF -104.3m related to the investment portfolio and CHF +10.1m to the developmen
Slide 19: Changes in Fair Value, Discount Rates (Dec. 2023)
Changes in Fair Value, Discount Rates (Dec. 2023) Valuation done by Wüest Partner Portfolio nominal discount rate Area Minimum Maximum Weighted Ø Zurich 3.1% 5.5% 3.8% Geneva 3.1% 5.8% 3.7% Basel 3.4% 4.5% 4.1% Bern 3.4% 5.3% 4.0% Lausanne 3.5% 5.3% 4.3% Other locations 3.7% 5.2% 4.6% All areas (all
Slide 20: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 20
Slide 21: Green Finance Policy
Green Finance Policy Green bond portfolio − Implemented November 2022 − 100% Green bond portfolio − Green assets defined over maximum CO 2 emissions and minimum Wüest ESG − Two second party opinions obtained by ISS ESG and Moody’s ESG Solutions Sustainability-linked loans − Implemented February 2023
Slide 22: Debt
Debt Diversified and stable lender portfolio − 11 domestic banks and 1 syndicated loan (with 11 Swiss Cantonal banks) High visibility on debt maturity profile − Weighted average loan maturity of 4.5 years, Ø fixed-interest period of 4.0 years − Last green bond issued: 10 April 2024, CHF 100m, all-in
Slide 23: Capital Structure
Capital Structure Money values in CHF m 2022 2023 Q1 2024 ∆ Shareholders’ equity 5’198.4 5’220.7 5’302.4 1.6% − % of total assets 54.8% 53.3% 54.5% Deferred tax liabilities (net) 1’068.1 947.7 960.0 1.3% − % of total assets 11.3% 9.7% 9.9% Interest-bearing debt 3’092.4 3’465.8 3’315.7 -4.3% − % of t
Slide 24: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 24
Slide 25: Project "Füsslistrasse", Zurich
Project “Füsslistrasse”, Zurich Under construction − Füsslistrasse 6, Zurich − Total renovation (modernisation) − Completion mid of 2024 − Investment sum approx. CHF 20m (thereof CHF 14.8m spent) − 30% pre-let (office space) Visualisations © PSP Swiss Property 25
Slide 26: Project "Hochstrasse", Basel
Project “Hochstrasse”, Basel Under construction − Hochstrasse 16 / Pfeffingerstrasse 5, Basel − Modernisation/repositioning − About half of the rental space (approx. 15’500 m 2) will be converted to 187 serviced apartments (operated by Artisa City Pop) − Offices let to Academia (education) − Complet
Slide 27: Project "The12", Zurich
Project “The12”, Zurich Under construction Visualisation − Theaterstrasse 12, Zurich − Comprehensive renovation (modernisation) − Approx. 6’000 m 2 rentable area (retail, gastronomy, office) − Completion end of 2024 − Investment sum approx. CHF 35m (thereof CHF 17.5m spent) − 100% pre-let (retail &
Slide 28: Project "TEC", Basel
Project “TEC”, Basel Under construction − Grosspeterstrasse 24, Basel − Modernisation − Approx. 11’300 m 2 letting space, thereof approx. 5’000 m 2 to be modernised − Completion end of 2024 − Investment sum approx. CHF 7m (thereof CHF 1.6m spent) − 42% pre-let © PSP Swiss Property 28
Slide 29: Project "Hôtel des Postes", Lausanne
Project “Hôtel des Postes”, Lausanne Under construction − Place Saint-François 15, Lausanne − Total renovation (modernisation) − Completion end of 2025 − Investment sum approx. CHF 45m Visualisations (thereof CHF 12.7m spent) − 10% pre-let (former tenant Schweizerische Post) © PSP Swiss Property 29
Slide 30: Capex and Potential Rental Income
Capex and Potential Rental Income CAPEX Potential Completion Total expected rental Pre-let (CHF m) 2024-2025 2024 2025 income1 in % Project “Füsslistrasse“, Zurich 2024 20.0 5.2 5.2 0 ~ 4.2 30% Project “TEC“, Basel 2024 7.0 5.4 5.4 0 ~ 2.5 42% Project “The12“, Zurich 2024 35.0 17.5 17.5 0 ~ 7.1 100%
Slide 31: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 31
Slide 32: Subsequent Events
Subsequent Events Dividend payment for the 2023 business year − 10 April 2024 − CHF 3.85 gross per share, totalling CHF 176.6m Bond issuance − Green bond − 10 April 2024, maturity October 2032 − CHF 100m − Coupon 1.65% − All-in 1.691% (spread of 52 basis points) © PSP Swiss Property 32
Slide 33: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 33
Slide 34: Outlook 2024
Outlook 2024 Consolidated Ebitda (excl. changes in fair value), updated CHF 300m (previous guidance: > CHF 295m; 2023: CHF 297.7m) Vacancy rate portfolio, at year-end, confirmed < 4% (end of 2023: 3.6%) © PSP Swiss Property 34
Slide 35: Agenda
Agenda 3 Key Facts and Figures 8 Financial Results Q1 2024 15 Portfolio & Vacancy Rate 21 Green Finance Policy & Capital Structure 25 Development Projects 32 Subsequent Events 34 Outlook 36 Annex © PSP Swiss Property 35
Slide 36: Board of Directors and Executive Board
Board of Directors and Executive Board Board of Directors − Luciano Gabriel, 1953, Chairman − Henrik Saxborn, 1964, Vice Chairman − Mark Abramson, 1970, Member − Corinne Denzler, 1966, Member − Adrian Dudle, 1965, Member − Katharina Lichtner, 1967, Member Executive Board − Giacomo Balzarini, 1968, C
Slide 37: Group Overview (31 March 2024)
Group Overview (31 March 2024) Executive Board (3) Capital Markets / Sustainability (3), Communications & IR (1) HR (2), Legal (4), Secretariat (1) Real Estate Investments Property Management Finance / Operations Asset Management (5) Zurich Office (19, 14*) Accounting / Controlling (11) Analysis / R
Slide 38: PSP Strategy
PSP Strategy Strategy − Switzerland only − Commercial properties only − Acquisitions to be justified by price and operational logic − Risk-conscious and sustainable financing policy Priority − Optimising profitability of existing portfolio − Ensuring long-term attractiveness of assets − Organic grow
Slide 39: Why Investing in PSP?
Why Investing in PSP? Company − Pure Swiss play − Transparent business model − Premium portfolio with limited downside risk − Properties with further optimisation potential − Acquisition/integration experience − Financial flexibility to take advantage of market opportunities − Sustainability (econom
Slide 40: Shareholder Base (31 March 2024)
Shareholder Base (31 March 2024) Largest shareholder − Black Rock, Inc.: 5.95% (notification 2 Sept. 2017) − Credit Suisse Funds AG: 5.20% (notification 14 November 2019) − UBS Fund Management (Switzerland) AG: 5.09% (notification 10 August 2021) 18% − Number of registered shareholders: 7’021 − Indi
Slide 41: Development of rental income
Development of rental income (CHF 1’000) 95’000 90’000 +1’951 89’182 +1’671 +385 +2’152 -5 -1’059 85’000 +2’953 81’135 80’000 75’000 0 Rental income Q1 Change rental Effect purchases Effect new Effect sales Effect Vacancy change Other Rental income Q1 2023 income constructions developments 2024 © PS
Slide 42: Ebitda
Ebitda 293.8 297.7 300 90% 278.8 250 85.0% 200 84.4% 84.5% 85% 83.9% 83.0% 150 100 80% 76.7 69.9 50 0 75% 2021 2022 2023 Q1 2023 Q1 2024 Ebitda excl. ∆-RE in CHF m. Ebitda margin in %. © PSP Swiss Property 42
Slide 43: Net Income Components
Net Income Components 600 373.9 500 400 300 94.2 339.2 200 221.1 235.7 100 24.4 0.7 0 56.3 56.6 -100 -131.6 -200 2021 2022 2023 Q1 2023 Q1 2024 Net income excl. ∆-RE in CHF m. Contribution of ∆-RE in CHF m. © PSP Swiss Property 43
Slide 44: EPS
EPS 14 12 12.97 10 8 7.19 7.40 6 4.82 5.14 4 4.53 2 1.77 1.24 1.23 1.23 0 2021 2022 2023 Q1 2023 Q1 2024 EPS in CHF. EPS excl. ∆-RE in CHF. © PSP Swiss Property 44
Slide 45: NAV + Cumulative Dividend per Share
NAV + Cumulative Dividend per Share 200 63.13 180 59.33 63.13 55.58 160 51.93 48.33 140 44.83 41.43 38.08 34.78 120 28.28 31.53 25.08 115.60 113.33 113.82 22.08 109.42 100 19.28 99.83 97.02 16.58 90.63 80 14.08 83.70 83.74 84.38 84.30 86.96 11.68 80.48 9.48 75.28 5.40 7.38 68.87 60 3.75 64.95 2.25 5
Slide 46: EPRA NRV vs. Share Price
EPRA NRV vs. Share Price 160 140 139.42 137.10 140.73 139.18 135.40 120 117.60 118.20 113.70 100 108.50 104.00 80 60 40 20 0 2021 2022 2023 Q1 2023 Q1 2024 EPRA NRV per share in CHF. Share price in CHF. © PSP Swiss Property 46
Slide 47: EPRA Performance Measures
EPRA Performance Measures Q1 2023, 31 Dec. 2023 Q1 2024, 31 March 2024 (CHF or %) EPRA PSP EPRA PSP A. EPS (earnings per share) 1.21 1.23 1.23 1.23 B. NRV (net reinstatement value) 137.10 134.48 139.18 136.53 C. NTA (net tangible assets) 134.75 n.a. 136.82 n.a. D. NDV (net disposal value) 115.94 113
Slide 48: Portfolio Key Figures
Portfolio Key Figures Numbers of Rental income Revaluation Value Net yield Vacancy properties in CHF m in CHF m in CHF m in % in % Zurich Q1 2024 79 53.8 25.2 5’683.1 3.5 4.0 FY 2023 79 195.3 -63.5 5’656.5 3.2 3.2 Geneva Q1 2024 22 12.4 0 1’461.2 2.8 2.9 FY 2023 22 48.3 -49.0 1’457.3 2.7 2.3 Basel Q
Slide 49: Portfolio Key Figures, cont.
Portfolio Key Figures, cont. Rent by use Rent by type of tenants Largest tenants 11% 6% 7% 6% 4% 4% 24% 3% 2% 8% 2% 6% 9% 8% 15% 64% 18% 9% 73% 10% 12% Office Retail Gastronomy Parking Other Services Retail Swisscom Google Financial Services Gastronomy IWG Technology Health Care On Telecommunication
Slide 50: Sustainability
Sustainability Our 12 material issues Our 12 material issues are based on a materiality analysis that matched up our business priorities with an assessment of the demands of our stakeholders, the effects of our work on the environment and society, and the areas for a meaningful contribution towards
Slide 51: Sustainability, cont.
Sustainability, cont. Organisation − Sustainability initiatives steered by a nine-member panel composed of representatives from property management, construction, asset management, human resources and communications, and the CIO − Implementation in the hands of most involved department for each init
Slide 52: Sustainability, cont.
Sustainability, cont. Main focus areas for 2024 − Continuation of carbon reduction strategy with focus on heating replacements, renovations, operational optimization, installation of photovoltaics − CO 2 reduction pathway: completion of implementation within the investment planning tool (training, r
Slide 53: Sustainability, cont.
Sustainability, cont. Key initiatives in Q1 2024 − Carried out intensive testing of CO 2 reduction calculations that have been integrated into renovation planning tool. This will help to dynamically adjust the CO 2 reduction path calculations in case of adjustments in renovation planning. The biodiv
Slide 54: Sustainability, cont.
Sustainability, cont. Performance FY 2023 GHG Intensity Share of renewable energy Energy Intensity 8.9 kg CO2/m2 52% 92.7 kWh/m2 In 2023, we reduced our CO2 emissions (Scope 1 and 2 emissions, by Landlord-obtained electricity: 99% renewable 7.7% reduction compared to 2022 (100.5 kWh/m2). Downwards t
Slide 55: Portfolio Grid (31 December 2023)
Portfolio Grid (31 December 2023) Market assessment of individual properties (by Wüest Partner) 6 May 2024 © PSP Swiss Property 55
Slide 56: Zurich Portfolio
Zurich Portfolio Hardturmstrasse 181, 183 / Förrlibuckstrasse 160, 190, 192 = Investment properties = Development projects Zurich Bahnhofplatz 1, 2 / Bahnhofquai 9, 11, 15 Goethestrasse 24 © PSP Swiss Property 56
Slide 57: Geneva Portfolio
Geneva Portfolio Rue de la Confédération 2 Geneva Rue du Marché 40 = Investment properties Rue de la Corraterie 24, 26 © PSP Swiss Property 57
Slide 58: Basel Portfolio
Basel Portfolio Barfüsserplatz 10 Basel Peter Merian-Strasse 88, 90 = Investment properties = Development projects Grosspeterstrasse 44 © PSP Swiss Property 58
Slide 59: Bern Portfolio
Bern Portfolio Laupenstrasse 18, 18a Bern Kramgasse 49 = Investment properties Bärenplatz 9, 11, 27 / Käfiggässchen 10, 22, 26 © PSP Swiss Property 59
Slide 60: Lausanne Portfolio
Lausanne Portfolio Place Saint-François 5 = Investment properties = Development project Lausanne Place Saint-François 15 Avenue Agassiz 2 © PSP Swiss Property 60
Slide 61: Contacts
Contacts Giacomo Balzarini, CEO Phone +41 (0)44 625 59 59 Mobile +41 (0)79 207 32 40 giacomo.balzarini@psp.info Vasco Cecchini, CCO & Head IR Phone +41 (0)44 625 57 23 Mobile +41 (0)79 650 84 32 vasco.cecchini@psp.info © PSP Swiss Property 61
Slide 62: Disclaimer
Disclaimer None of the information in this presentation constitutes an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. None of the securities of the Company referred to in this presen