Psp Swiss Property Ag · SIX:PSPN

Psp Swiss Property — Q1 2021 Earnings Presentation

63 slides from Psp Swiss Property's earnings presentation, Apr 30, 2021

  1. Slide 1: Quarterly Results Q1 2021

    Quarterly Results Q1 2021 30 April 2021

  2. Slide 2: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 2

  3. Slide 3: Property Portfolio (March 2021)

    Property Portfolio (March 2021) Basel Zurich CHF 0.7bn CHF 4.6bn Portfolio value CHF 8.6bn 8% 54% Lausanne Bern CHF 0.4bn CHF 0.5bn 5% 6% Geneva CHF 1.2bn 14% Other locations CHF 0.4bn 5% Sites and projects CHF 0.7bn In total, 160 investment properties, plus: 9% 3 sites: “Residenza Parco Lago”, Para

  4. Slide 4: Current Market Environment

    Current Market Environment Swiss market environment  Similar market assessment as per full year publication  Market for prime office properties in Swiss main markets remains resilient  Stable business sentiment  Demand for letting office space at prime locations is stable  In secondary location

  5. Slide 5: Main Developments

    Main Developments Real estate portfolio  Portfolio value CHF 8.6bn (up 0.8% compared with December 2020)  Disposal of development project in Zurich-Kilchberg for CHF 20.0m (54.6% above last valuation) Vacancy and rental situation  Vacancy rate of 3.1% (December 2020: 3.0%)  Of all 2021 maturitie

  6. Slide 6: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 6

  7. Slide 7: Key Figures

    Key Figures Consolidated, in CHF m 2018 2019 2020 Q1 2020 Q1 2021 ∆ Ebitda excl. ∆-RE1 241.7 256.1 271.1 63.3 78.5 23.9% Net income excl. ∆-RE1 176.2 215.22 215.8 48.1 61.8 28.5% Net income 308.2 453.4 292.1 47.9 88.8 85.3% Rental income 279.4 290.5 296.3 74.0 77.4 4.6% Per share, in CHF 2018 2019 2

  8. Slide 8: Consolidated Income

    Consolidated Income (CHF 1’000) 2018 2019 2020 Q1 2020 Q1 2021 ∆ Rental income 279’373 290’460 296’2741 74’042 77’4342 4.6%3 Valuation gains 166’692 244’176 101’578 -235 33’152 Prop. sales revenues (condominiums) 10’484 12’835 16’115 851 13’240 Property sales (investment properties) 2’472 14’961 0 0

  9. Slide 9: Consolidated Expenses

    Consolidated Expenses (CHF 1’000) 2018 2019 2020 Q1 2020 Q1 2021 ∆ Properties’ operating expenses -12’841 -12’014 -10’613 -2’500 -2’543 1.7% Properties’ maintenance/renovation -16’961 -16’796 -15’404 -3’566 -3’744 5.0% Personnel expenses -20’027 -19’343 -20’503 -4’872 -4’772 -2.0% Fees to subcontrac

  10. Slide 10: Consolidated Results

    Consolidated Results (CHF 1’000) 2018 2019 2020 Q1 2020 Q1 2021 ∆ Profit before financial expenses 408’551 512’963 371’306 62’736 111’262 77.3% Net financial expenses -21’979 -19’084 -13’209 -3’841 -2’892 24.7% Profit before taxes 386’572 493’879 358’097 58’895 108’370 84.0% Taxes - 78’4201 -40’4542

  11. Slide 11: Per Share Distribution (in CHF)

    Per Share Distribution (in CHF) 4 3.60 3.65 3.50 3.30 3.35 3.40 3.20 3.25 3.25 3.00 3 2.80 2.70 2.50 2.40 2.20 2.10 1.98 2 1.65 1.50 1.25 1.00 1 0 2020* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 For business year Y-t-y growth n.a. 25.0% 20.0%

  12. Slide 12: Share Price, rebased

    Share Price, rebased PSP SPI Index SMI Index EPRA Index SREAL Index 450 400 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Bloomberg, 29.4.2021 © PSP Swiss Property I Page 12

  13. Slide 13: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 13

  14. Slide 14: Portfolio and Vacancy Rate

    Portfolio and Vacancy Rate 10 10% 9 8.5% 9% 8 8% 6.8% 7 7% 6.1% 6 6% 5.0% 5 4.4% 5% 4.0% 4.0% 8.479 8.577 8.641 4 7.982 8.055 8.127 4% 3 7.343 7.384 7.442 7.682 7.820 7.849 3.5% 3% 7.272 3.4% 3.2% 3.3% 3.1% 3.0% 2 2% 1 1% 0 0% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q

  15. Slide 15: Largest Vacancies (March 2021)

    Largest Vacancies (March 2021) Vacancy Vacancy Contribution Actions taken / status Properties (sqm)* rate in %-points Rue des Bains 31bis, 33, 35, Geneva 1’616 16.4% 0.3% Letting in progress Uraniastrasse 9, Zurich 1’131 27.6% 0.2% New lease starting in Q2 2021 Salmencenter, Rheinfelden 2’600 11.5%

  16. Slide 16: Expiry Profile of Leases (March 2021)

    Expiry Profile of Leases (March 2021) (Legal termination option by tenants) 20% 18% 18% 18% 16% 14% 14% 12% 13% 10% 10% 8% 8% 6% 7% 4% 5% 2% 3% 3% 1% 1% 0% 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031+ NL 71% of the Q2-Q4 2021 maturities (CHF 46.1m) are renewed. 29% of the Q2-Q4 2021 matur

  17. Slide 17: Changes in Fair Value (March 2021)

    Changes in Fair Value (March 2021) (CHF m) 2017 2018 2019 2020 Q1 2021 Existing portfolio 83.3 170.61 236.72 111.85 33.27 Acquisitions / first-time valuation 0 - 3.93 7.54 -10.26 0 Total net changes in fair value 83.3 166.7 244.2 101.6 33.2 1 Of which: H1 2018: CHF 95.4m, of which CHF 61.9m related

  18. Slide 18: Changes in Fair Value: Discount Rates (Dec. 2020)

    Changes in Fair Value: Discount Rates (Dec. 2020) Portfolio nominal discount rate Area Minimum Maximum Weighted Ø Zurich 2.4% 4.8% 3.1% Geneva 2.4% 4.5% 3.1% Basel 3.0% 3.8% 3.4% Bern 2.7% 4.3% 3.3% Lausanne 2.8% 4.3% 3.4% Other locations 3.0% 5.1% 3.9% All areas (all objects) 2.4% 5.1% 3.2%** 2013

  19. Slide 19: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 19

  20. Slide 20: Debt

    Debt Diversified and stable lender portfolio  11 domestic banks and 1 syndicated loan (with 11 Swiss Cantonal banks) A bond over CHF 200m and a note over 50m were issued in Q1 2021  Bond: all-in costs of 0.22% p.a. maturing in 2031  Short-term note: all-in costs of -0.42% p.a. maturing in Septemb

  21. Slide 21: Capital Structure

    Capital Structure Money values in CHF m 2018 2019 2020 Q1 2021 ∆ Shareholders’ equity 4’156.9 4’450.2 4’579.2 4’507.1 -1.6% - % of total assets 54.6% 55.4% 52.8% 51.6% Deferred tax liabilities (net) 851.9 862.4 905.5 916.7 - % of total assets 11.2% 10.7% 10.4% 10.5% Interest-bearing debt 2’511.2 2’5

  22. Slide 22: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 22

  23. Slide 23: Project Pipeline

    Project Pipeline CHF 174m to invest going forward 2017 2018 2019 2020 2021 2022 2023 4 1 Paradiso “Residenza Parco Lago” CHF 80m 2/5 2 Zurich „Bahnhofquai/-platz“ CHF 55m (stage 1) 3 CHF 45m (stage 2) 3 Bern “Bärenplatz“ CHF 16m 1 4 Basel “Baufeld C” CHF 37m 5 Zurich “Grubenstrasse” CHF 35m 3 sites

  24. Slide 24: «Residenza Parco Lago» Paradiso

    «Residenza Parco Lago» Paradiso Under construction  Conversion of existing site (former brewery)  Completion Q2 2021, all units to be sold  New building with mixed use (approx. 13’000 m2): mainly residential units & some office and retail area  Investment sum approx. CHF 80m (thereof CHF 62.5m s

  25. Slide 25: Project «Bahnhofquai/-platz» Zurich

    Project «Bahnhofquai/-platz» Zurich Renovation in three stages, total investment sum approx. CHF 117m Stage 1, under construction: Bahnhofplatz 1, Bahnhofquai 9/11/15  Completion Q3 2021  Investment sum approx. CHF 55m (thereof CHF 27.0m spent)  Long-term lease signed with Signature (co-working b

  26. Slide 26: Project «Bahnhofquai/-platz» Zurich (cont.)

    Project «Bahnhofquai/-platz» Zurich (cont.) Stage 2, under construction: Waisenhausstrasse 2/4, Bahnhofquai 7  Completion Q3 2021  Investment sum approx. CHF 45m (thereof CHF 34.0m spent)  Long-term lease signed with:  Ruby Hotel & Resorts (“Lean Luxury” concept, 208 rooms), opening Q4 2021  Ca

  27. Slide 27: Project «Bärenplatz» Bern

    Project «Bärenplatz» Bern Under construction  Bärenplatz 9, 11, 27 / Käfiggässchen 10, 22, 26 (acquired in 2019)  Comprehensive renovation and modernisation; mixed use: gastronomy (approx. 1’100 m2), office (approx. 1’300 m2) and residential (approx. 900 m2)  Completion beginning of 2022  Invest

  28. Slide 28: Project «Baufeld C» Basel

    Project «Baufeld C» Basel Under construction Visualisation  Grosspeterstrasse 18  New building/construction  Approx. 5’600 m2 office space  Completion end of 2022  Investment sum approx. CHF 37m (thereof CHF 8.4m spent)  50% pre-let to Swisscom  8% pre-let to gastronomy operator  www.grosspe

  29. Slide 29: Project «Grubenstrasse» Zurich

    Project «Grubenstrasse» Zurich Under construction  Grubenstrasse 6 (district 2), plot of land with commercial building acquired in March 2020  New building with office (approx. 5’200 m2) and commercial (approx. 6’100 m2) areas  Completion Q1 2023 (demolition of old building finished end of Septem

  30. Slide 30: Capex and Potential Rental Income Overview

    Capex and Potential Rental Income Overview CAPEX Potential rental Pre-let Completion Total expected income3 in % 2021-2024 2021 2022 2023/ (CHF m) 2024 “Residenza Parco Lago”, Paradiso1 2021 80.0 17.8 17.8 0 0 n.a. n.a. Project “Bahnhofquai/-platz”, Zurich1, 2 2021-23 117.0 47.0 21.3 21.0 4.8 ~ 11.8

  31. Slide 31: Disposal

    Disposal Disposed development property  Kilchberg, Seestrasse 40, 42 (project “Seestrasse”)  CHF 20.0m (gain CHF 7.3m)  24 March 2021 © PSP Swiss Property I Page 31

  32. Slide 32: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 32

  33. Slide 33: Covid-19 Implications

    Covid-19 Implications Ordinances in Switzerland  As of 13 March 2020, the Federal Council (FC) issued emergency ordinances (non-food retail, restaurants, leisure facilities and schools were closed until 26 April 2020)  As of 27 April 2020, gradual exit from the lockdown; FC decided on several meas

  34. Slide 34: Covid-19 Implications, cont.

    Covid-19 Implications, cont. Tenant issues and measures taken  Lockdown March 2020: ~ 350 tenants asked for rent holiday/reduction, of which ~ 220 were directly affected (out of total ~ 2’300 tenants)  As per today 80 open cases (ongoing negotiations)  Q1 2021: limited exposure to sectors directl

  35. Slide 35: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 35

  36. Slide 36: Outlook 2021

    Outlook 2021 Consolidated EBITDA (excl. changes in fair value) ~ CHF 275m Vacancy rate portfolio (year-end) ~ 4.5% The forecasts with regard to EBITDA and vacancies are conditional on the future development of the corona crisis. They are based on the assumption of a continued gradual easing of the m

  37. Slide 37: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1 2021 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites, Projects and Disposals 23 Covid-19 Implications 33 Outlook 36 Annex 38 © PSP Swiss Property I Page 37

  38. Slide 38: Board of Directors and Executive Board

    Board of Directors and Executive Board Board of Directors  Luciano Gabriel, 1953, Chairman  Corinne Denzler, 1966, Member  Adrian Dudle, 1965, Member  Peter Forstmoser, 1943, Member  Henrik Saxborn, 1964, Member  Josef Stadler, 1963, Member  Aviram Wertheim, 1958, Member Executive Board  Gia

  39. Slide 39: Group Overview (31 March 2021)

    Group Overview (31 March 2021) Executive Board (3) Communications / IR / Sustainability (2), Legal (4), HR (2), Secretariat (1) Real Estate Investments Property Management Finance / Operations Asset Management (4) Zurich Office (19, 13*) Accounting / Controlling (9) Construction (17) Geneva Office (

  40. Slide 40: PSP Strategy

    PSP Strategy Strategy  Switzerland only  Commercial properties only  Acquisitions to be justified by price and operational logic  Risk-conscious financing policy Priority  Optimising profitability of existing portfolio  Ensuring long-term attractiveness of assets  Organic growth  Sites devel

  41. Slide 41: Why Investing in PSP?

    Why Investing in PSP? Company  Premium portfolio with limited downside risk  Transparent business model  Pure Swiss play  Properties with further optimisation potential  Financial flexibility to take advantage of market opportunities  Acquisition/integration experience  Sustainability (econom

  42. Slide 42: Shareholder Base (31 March 2021)

    Shareholder Base (31 March 2021) Largest shareholder  BlackRock, Inc.: 5.86% (notification 2 September 2017)  Chase Nominees Ltd.: 5.69%  Credit Suisse Funds AG: 5.20% (notification 14 November 2019)  UBS Fund Management (Switzerland) AG: 3.06% (notification 13 July 2017)  PGGM Vermogensbeheer

  43. Slide 43: Development of rental income Q1 2021

    Development of rental income Q1 2021 (CHF 1’000) 85’000 +3’655 -170 -1’265 +208 -1’502 77’434 +2’730 75’000 74’042 -264 65’000 0 Rental income Change rental Effect purchases Effect new Effect sales Effect Vacancy change Other Rental income Q1 2020 income constructions developments Q1 2021 © PSP Swis

  44. Slide 44: Ebitda

    Ebitda 300 90% 250 85.9% 200 85% 83.4% 83.4% 82.0% 150 271.1 80.8% 256.1 100 241.7 80% 50 78.5 63.3 0 75% 2018 2019 2020 Q1 2020 Q1 2021 Ebitda excl. ∆-RE in CHF m. Ebitda margin in %. © PSP Swiss Property I Page 44

  45. Slide 45: Net Income Components

    Net Income Components 500 450 400 350 238.2 300 131.9 250 76.3 200 215.2 215.8 150 176.2 100 27.0 50 61.8 48.1 0 -0.2 2018 2019 2020 Q1 2020 Q1 2021 -50 Net income excl. ∆-RE in CHF m. Contribution of ∆-RE in CHF m. © PSP Swiss Property I Page 45

  46. Slide 46: EPS

    EPS 10 9.89 9 8 7 6.72 6 6.37 5 4.69 4.70 4 3.84 3 2 1.94 1 1.35 1.04 1.05 0 2018 2019 2020 Q1 2020 Q1 2021 EPS in CHF. EPS excl. ∆-RE in CHF. © PSP Swiss Property I Page 46

  47. Slide 47: NAV + Cumulative Dividend per Share

    NAV + Cumulative Dividend per Share 180 55.58 160 51.93 48.33 44.83 140 41.43 38.08 34.78 120 28.28 31.53 25.08 22.08 100 19.28 99.83 100.00 97.02 16.58 90.63 14.08 86.96 80 11.68 83.70 83.74 84.38 84.30 80.48 9.48 75.28 7.38 68.87 60 2.25 3.75 5.40 61.83 64.95 59.71 1.00 56.25 51.80 53.28 0.00 50.5

  48. Slide 48: NAV vs. Share Price

    NAV vs. Share Price 140 130 133.60 120 110 118.30 115.20 100 99.83 98.26 90 96.85 97.02 92.35 90.63 80 86.96 70 60 50 40 30 20 10 0 2017 2018 2019 2020 Q1 2021 NAV per share in CHF. Share price in CHF. FY17: restated due to IFRS 15, Revenue from Contracts with Customers. © PSP Swiss Property I Page

  49. Slide 49: EPRA Performance Measures

    EPRA Performance Measures Q1 2020, Dec. 2020 Q1 2021, March 2021 (CHF or %) EPRA PSP EPRA PSP A. EPS (earnings per share) 1.04 1.05 1.12 1.35 B. NRV (net reinstatement value) 123.19 119.57 121.76 118.25 C. NTA (net tangible assets) 120.76 n.a. 119.34 n.a. D. NDV (net disposal value) 100.25 99.83 98.

  50. Slide 50: Portfolio Key Figures

    Portfolio Key Figures Numbers of Rental Revaluation Value Net yield Vacancy properties income in CHF m in CHF m in % in % in CHF m Zurich Q1 2021 77 42.5 33.2 4’645.8 3.3 1.9 FY 2020 76 163.7 103.4 4’411.8 3.3 2.1 Geneva Q1 2021 19 9.6 0 1’177.3 2.8 4.3 FY 2020 19 33.5 -12.0 1’176.2 2.7 3.4 Basel Q1

  51. Slide 51: Portfolio Key Figures, cont.

    Portfolio Key Figures, cont. Rent by Use Rent by Type of Tenants Retail, 16% Other, 7% Parking, 5% Services, 20% Government, 5% Office, Gastronomy, 65% Gastronomy, 7% 4% Health Care, 9% Retail, 18% Other, 10% Technology, 10% Telecommunication, Financial Services, 14% 10% Largest Tenants Swisscom, 9%

  52. Slide 52: Sustainability

    Sustainability Organisation  Sustainability initiatives steered by 8-member panel composed of representatives from property management, construction, asset management, human resources and communications  Implementation in the hands of most involved department for each initiative  3 full-time spec

  53. Slide 53: Sustainability, cont.

    Sustainability, cont. Portfolio  86% of the portfolio is very well connected, 11% is well connected to public transport (“ÖV-Güteklasse” A and B)  Achieved a 52% reduction in CO2 emissions per square metre since 2010 (from 21.1 to 10.1 kg CO2e/m2)  Achieved a 30% reduction in energy use per squar

  54. Slide 54: Sustainability, cont.

    Sustainability, cont. Portfolio (cont.) Wir haben uns das Ziel gesetzt, die spezifischen CO2-Emissionen unseres  New CO2 reduction target: We want to reduce the specific CO2 emissions of our portfolio (in kg CO2e/m2) by Portfolios around 50%bis 2035 by 2035 umonrund (based 50 % auf 6.15 kg CO2e/m2

  55. Slide 55: Sustainability, cont.

    Sustainability, cont. Tenants  Integration of sustainability related questions in 2020 tenant survey: results showed great interest in sustainability issues and openness towards stronger cooperation to achieve sustainability targets  Two thirds of properties connected to energy control and alarm m

  56. Slide 56: Portfolio Grid

    Portfolio Grid Source: Wüest Partner © PSP Swiss Property I Page 56

  57. Slide 57: Zurich Area

    Zurich Area Bahnhofplatz 9 Bahnhofstr. 66 = Investment properties = Development projects Bahnhofstr. 81 Bahnhofstr. 10 Zurich Seefeldstr. 123 Bahnhofstr. 39 Uraniastr. 9 Brandschenkestr. 90 Bahnhofstr. 28a © PSP Swiss Property I Page 57

  58. Slide 58: Geneva Area

    Geneva Area Rue Richard-Wagner 6 Rue d.l. Confédération 2 Geneva Rue des Bains 31/33/35 Cours de Rive 13/15 R.d. Acacias 50/52 Rue de la Fontaine 5 = Investment properties = Development projects Rue de la Gabelle 6 Rue de la Corraterie 24/26 © PSP Swiss Property I Page 58

  59. Slide 59: Basel Area

    Basel Area Marktplatz 30/30a Freie Strasse 38 Barfüsserplatz 10 St. Alban-Anlage 46 Basel Peter Merian-Str. 88/90 Steinentorberg 8/12 = Investment properties Grosspeterstr. 44 = Development project Kirschgartenstr. 12/14 Dornacherstr. 210 © PSP Swiss Property I Page 59

  60. Slide 60: Bern Area

    Bern Area Bollwerk 15 Zeughausgasse 26/28 Bern Laupenstrasse 18/18a Kramgasse 49 Seilerstrasse 8 = Investment properties Kramgasse 78 = Development projects Eigerstrasse 2 Bärenplatz © PSP Swiss Property I Page 60

  61. Slide 61: Lausanne Area

    Lausanne Area Rue de Sébeillon 2 Rue du Pont 22 Lausanne Avenue de Sévelin 54 Rue Saint Martin 7 = Investment properties Avenue de Sévelin 40 Place Saint-François 5 Avenue de Cour 135 Place Saint-François 15 © PSP Swiss Property I Page 61

  62. Slide 62: 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 I Page 62

  63. Slide 63: 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

PSP Swiss Property — Q1 2021 Earnings Presentation on 6ix