Psp Swiss Property Ag · SIX:PSPN

Psp Swiss Property — Q1-Q3 2017 Earnings Presentation

63 slides from Psp Swiss Property's earnings presentation, Nov 14, 2017

  1. Slide 1: Q1-Q3 Results

    Q1-Q3 RESULTS 14 November 2017

  2. Slide 2: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 2

  3. Slide 3: Property Portfolio (September 2017)

    Property Portfolio (September 2017) Portfolio value CHF 7.0 bn Basel 8% Zurich 58% CHF 0.5 bn CHF 4.0 bn Lausanne 5% Bern 4% CHF 0.3 bn CHF 0.3 bn Geneva 11% CHF 0.7 bn Other locations 6% CHF 0.4 bn Development sites and In total, 158 investment properties, plus: projects 9% 4 sites: “Residenza Parc

  4. Slide 4: Current Market Environment

    Current Market Environment Swiss market environment  Step-by-step, the business sentiment is improving. An increasing number of companies is considering expansion plans. Increasing number of start-ups.  Office rents stabilising on average at about the current levels; lease incentives remain import

  5. Slide 5: Main Developments

    Main Developments Real estate portfolio  Portfolio value CHF 7.0bn (up 0.9% compared with December 2016)  Stabilisation of rent levels across the portfolio Vacancy and rental situation  Vacancy rate of 8.3%, of which 0.6%-points due to renovations  Of all 2017 maturities (CHF 31.4m), 90% renewed

  6. Slide 6: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 6

  7. Slide 7: Key Figures

    Key Figures Consolidated, in CHF m 2014 2015 2016 Q1-3 2016 Q1-3 2017  Ebitda excl. ∆-RE1 238.2 232.7 241.6 184.6 187.4 1.5% Net income excl. ∆-RE1 169.3 161.3 172.5 132.0 138.2 4.6% Net income 175.3 187.7 134.9 102.8 165.1 60.7% Rental income 277.2 275.1 276.3 207.7 204.3 -1.7% Per share, in CHF 2

  8. Slide 8: Consolidated Income

    Consolidated Income (CHF 1’000) 2014 2015 2016 Q1-3 2016 Q1-3 2017  Rental income 277’150 275’063 276’316 207’711 204’272 -1.7%1 Valuation gains 5’789 33’791 - 50’208 - 38’407 17’739 Property sales (condominiums) 6’813 3’259 14’224 13’108 19’896 Property sales (investment properties) 2’026 1’374 1’

  9. Slide 9: Consolidated Expenses

    Consolidated Expenses (CHF 1’000) 2014 2015 2016 Q1-3 2016 Q1-3 2017  Properties’ operating expenses - 11’349 - 11’2711 - 12’258 - 9’089 - 8’828 -2.9% Properties’ maintenance/renovation - 15’662 - 14’626 - 14’817 - 11’341 - 12’553 10.7% Personnel expenses - 18’531 - 17’7262 - 20’468 - 15’402 - 14’5

  10. Slide 10: Consolidated Results

    Consolidated Results (CHF 1’000) 2014 2015 2016 Q1-3 2016 Q1-3 2017  Profit before financial expenses 245’035 265’298 191’006 145’763 204’713 40.4% Net financial expenses - 30’662 - 29’035 - 26’430 - 20’286 - 18’969 -6.5% Profit before taxes 214’373 236’263 164’577 125’477 185’744 48.0% Taxes - 39’

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

    Per Share Distribution (in CHF) 4 3.25 3.25 3.30 3.35 3.20 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 2016* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 For business year Y-t-y growth 25.0% 20.0% 10.0% 20.0% 6.0% 4.8% 9.1% 4.2% 8.0% 3.7% 7.

  12. Slide 12: Share Price in CHF (7.3.2000 – 9.11.2017)

    Share Price in CHF (7.3.2000 – 9.11.2017) Performance since PSP IPO, 7.3.2000 (total return: dividends reinvested) PSP SXI RE rebased FTSE/EPRA Developed Europe TR Index 335.9% 161.1% 217.3% Source: Bloomberg, 09.11.2017 © PSP Swiss Property I Page 12

  13. Slide 13: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 13

  14. Slide 14: Portfolio and Vacancy Rate

    Portfolio and Vacancy Rate 8 11.4% 12% 7 9.7% 10% 9.1% 9.1% 8.7% 8.7% 6 9.4% 9.3% 8.3% 8% 5 4 6% 6.759 6.884 6.894 6.908 6.947 6.954 6.737 3 4% 2 2% 1 0 0% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Real estate portfolio value in CHF bn. Vacancy rate in % (CHF). Vacancy rate excl. prope

  15. Slide 15: Largest Vacancies (September 2017)

    Largest Vacancies (September 2017) Vacancy Vacancy Actions taken / Status Properties (sqm)* rate Av. des Morgines 8/10, Petit-Lancy 13’474 98.3% New marketing / letting concept; CBRE appointed Salmencenter, Rheinfelden 5’585 23.5% New lettings in Q3; letting in progress Route des Arsenaux 41, Fribou

  16. Slide 16: Expiry Profile of Leases (September 2017)

    Expiry Profile of Leases (September 2017) (Legal termination option by tenants) 16% 14% 15% 14% 12% 13% 10% 11% 10% 10% 8% 8% 6% 6% 4% 5% 4% 2% 3% 1% 0% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027+ NL 58% of the Q4 2017 maturities (CHF 7.5 m) are renewed. 42% of the Q4 2017 maturities are

  17. Slide 17: Changes in Fair Value (June 2017)

    Changes in Fair Value (June 2017) (CHF m) 2012 2013 2014 2015 2016 H1 2017 Existing portfolio 263.5 120.52 4.6 33.9 - 43.5 17.7 Acquisitions / first-time valuation 3.41 7.63 1.24 - 0.15 - 6.76 0 Total net changes in fair value 266.9 128.1 5.8 33.8 - 50.2 17.7 1 From the acquisition of a single prope

  18. Slide 18: Changes in Fair Value: Discount Rates (June 2017)

    Changes in Fair Value: Discount Rates (June 2017) Nominal Discount Rate Area Minimum Maximum Weighted Ø Zurich 2.7% 5.3% 3.6% Geneva 3.4% 5.3% 4.0% Basel 3.3% 4.0% 3.8% Bern 3.0% 4.8% 3.7% Lausanne 3.2% 4.7% 3.9% Other locations 3.4% 5.6% 4.6% All areas 2.7% 5.6% 3.7%** 2013 2014 2015 2016 2017 H1 W

  19. Slide 19: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 19

  20. Slide 20: Debt

    Debt Diversified and stable lender portfolio  10 domestic banks and 1 syndicated loan (with 14 Swiss Cantonal banks) High visibility on debt maturity profile  Average loan maturity of 3.2 years  Negotiation of loans expiring in 2019 started CHF 740 m unused committed credit lines Rating  Moody’s

  21. Slide 21: Capital Structure

    Capital Structure Money values in CHF m 2013 2014 2015 2016 Q3 2017  Shareholders‘ equity 3’839.2 3’840.8 3’870.5 3’866.8 3’892.7 0.7% - % of total assets 58.7% 57.5% 57.0% 54.9% 53.4% Deferred tax liabilities (net) 713.0 726.0 754.5 763.7 767.0 - % of total assets 10.9% 10.9% 11.1% 10.8% 10.5% Int

  22. Slide 22: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 22

  23. Slide 23: Project Pipeline

    Project Pipeline CHF 380 million to invest going forward 1 Basel „Grosspeter Tower“ CHF 120 m 1 7/3/4 2 Lausanne „Rue Saint Martin“ CHF 13 m 3 Zurich „Hardturmstrasse/ CHF 60 m Förrlibuckstrasse“ 4 Zurich „Bahnhofquai/-platz“ CHF 51 m (stage 2 in planning, stage 3 CHF 45 m 2 under review) (stages 2

  24. Slide 24: Project «Grosspeter Tower» Basel

    Project «Grosspeter Tower» Basel Under construction  Completion end of 2017  Mixed use (18’000 m2, hotel and office space)  Zero-emissions operation (“Swiss solar price 2017”)  Investment sum approx. CHF 120 m (thereof CHF 98.9 m spent at end of Q3 2017)  70% pre-let (hotel, ground floor & 10 o

  25. Slide 25: Project «Grosspeter Tower» Basel (cont.)

    Project «Grosspeter Tower» Basel (cont.) Available 1/3 in advanced negotiations Let Available © PSP Swiss Property I Page 25

  26. Slide 26: Project «Rue du Marché» Geneva

    Project «Rue du Marché» Geneva Under construction  Comprehensive renovation until mid-2020  Investment sum approx. CHF 30 m (thereof CHF 4.0 m spent at end of Q3 2017)  Anchor tenant: citizenM (international operating Visualisations boutique hotel group)  70% pre-let  Active letting process for

  27. Slide 27: «Residenza Parco Lago» Paradiso

    «Residenza Parco Lago» Paradiso Under construction  Completion end of 2019  Conversion of existing site (former brewery)  New building with mixed use (approx. 13’000 m2): mainly residential units & some office and retail area  Investment sum approx. CHF 80 m (thereof CHF 6.4 m spent at end of Q3

  28. Slide 28: Project «Bahnhofquai/-platz» Zurich

    Project «Bahnhofquai/-platz» Zurich Under renovation/review  Total renovation (3 stages, overall inv. sum approx. CHF 96 m)  Discussions with the City authorities (building protection) successfully terminated  Stage 1: property Bahnhofplatz 1, Bahnhofquai 9/11/15 - Construction June 2017 - 2019 -

  29. Slide 29: Project «Hardturmstrasse / Förrlibuckstrasse» Zurich

    Project «Hardturmstrasse / Förrlibuckstrasse» Zurich Under renovation  Completion end of 2018  Total renovation of existing building  Investment sum approx. CHF 60 m (thereof CHF 40.7 m spent at end Q3 2017)  75% pre-let  www.hardturmstrasse161.ch/en Visualisations © PSP Swiss Property I Page 2

  30. Slide 30: Project «Hardturmstrasse / Förrlibuckstrasse» Zurich (cont.)

    Project «Hardturmstrasse / Förrlibuckstrasse» Zurich (cont.) Letting split Vacant, 25% Telecommunication, 24% WESTHIVE: Next Generation Co-working Medtech, 10% Other, 16% IT, 7% Co-working, 5% Government, Energy, 6% 7% © PSP Swiss Property I Page 30

  31. Slide 31: Project «Orion» Zurich

    Project «Orion» Zurich In planning  Förrlibuckstr. 178/180 & Hardturmstr. 181-185 to be replaced by a modern office building  Investment sum approx. CHF 130 m (construction 2018 - 2021)  CBRE appointed as letting agent Project «Orion» Project «Hardturmstrasse / Förrlibuckstrasse» © PSP Swiss Prop

  32. Slide 32: Project «Orion» Zurich (cont.)

    Project «Orion» Zurich (cont.) Project outline Current situation © PSP Swiss Property I Page 32

  33. Slide 33: Project «Orion» Zurich, Visualisations (cont.)

    Project «Orion» Zurich, Visualisations (cont.) © PSP Swiss Property I Page 33

  34. Slide 34: Project «Orion» Zurich, Visualisations (cont.)

    Project «Orion» Zurich, Visualisations (cont.) © PSP Swiss Property I Page 34

  35. Slide 35: Capex and Potential Rental Income Overview

    Capex and Potential Rental Income Overview CAPEX Potential Pre- rental letting expected income3 in % (CHF m) 2017- 2017 2018 2019- 2022 2022 Project “Grosspeter Tower”, Basel1 32.0 17.4 12.6 2.0 ~ 5.8 70% Project “Rue du Marché”, Geneva1 29.7 1.1 14.4 14.2 ~ 5.5 70% Project “Rue Saint-Martin”, Lausa

  36. Slide 36: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 36

  37. Slide 37: Outlook 2017

    Outlook 2017 Consolidated EBITDA (w/o RE) > CHF 240 m Vacancy rate portfolio (year-end) < 8.5% © PSP Swiss Property I Page 37

  38. Slide 38: Agenda

    Agenda Key Facts and Figures 3 Financial Results Q1-Q3 2017 7 Portfolio and Vacancy Rate 14 Capital Structure 20 Development Sites and Projects 23 Outlook 37 Annex 39 © PSP Swiss Property I Page 38

  39. Slide 39: 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  Nathan Hetz, 1952, Member  Josef Stadler, 1963, Member  Aviram Wertheim, 1958, Member Executive Board  Giacom

  40. Slide 40: Group Overview (30 September 2017)

    Group Overview (30 September 2017) Executive Board (3) Banking, Capital Market Corporate Communications & IR (2) Legal (3) HR (1) Secretariat (1) Real Estate Investments Property Management Finance / Operations Asset Management (3) Zurich Office (17, 14*) Accounting / Treasury (8) Construction (16)

  41. Slide 41: 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

  42. Slide 42: 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

  43. Slide 43: Shareholder Base (30 September 2017)

    Shareholder Base (30 September 2017) Largest shareholder  Alony Hetz: 12.21%  Chase Nominees Ltd.: 6.84%  BlackRock, Inc.: 5.86%1  UBS Fund Management (Switzerland) AG: 3.06%2  T. Rowe Price Associates, Inc.: 3.04%3 Non-registered, 26% CH, 43%  Number of registered shareholders: 4’611 - Indivi

  44. Slide 44: Ebitda

    Ebitda 300 85% 81.8% 82.0% 82.0% 81.3% 81.5% 80% 250 75% 200 70% 150 65% 238.2 232.7 241.6 100 184.6 187.4 60% 50 55% 0 50% 2014 2015 2016 Q1-3 2016 Q1-3 2017 Ebitda excl. ∆-RE in CHF m. Ebitda margin in %. © PSP Swiss Property I Page 44

  45. Slide 45: Net Income Components

    Net Income Components 200 26.4 6.0 169.3 172.5 27.0 150 161.3 138.2 132.0 100 50 0 2014 2015 2016 Q1-3 2016 Q1-3 2017 -37.7 -29.3 -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 6 5 4 4.09 3.82 3.76 3.69 3.60 3.52 3 2.94 3.01 2.88 2 2.24 1 0 2014 2015 2016 Q1-3 2016 Q1-3 2017 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 140 41.43 34.78 38.08 120 31.53 28.28 25.08 100 22.08 19.28 16.58 80 14.08 83.70 83.74 84.38 84.30 84.87 80.48 11.68 75.28 9.48 68.87 7.38 60 3.75 5.40 61.83 64.95 2.25 59.71 56.25 1.00 53.28 50.58 51.02 51.80 0.00 47.24 40 42.21 20 0 2000 2001 2002 2003 2004 2005

  48. Slide 48: NAV vs. Share Price

    NAV vs. Share Price 100 90 92.50 88.00 88.00 89.20 80 85.80 84.38 84.30 84.87 83.74 83.40 70 60 50 40 30 20 10 0 2014 2015 2016 Q3 2016 Q3 2017 NAV per share in CHF. Share price in CHF. © PSP Swiss Property I Page 48

  49. Slide 49: EPRA Performance Measures

    EPRA Performance Measures 2016 H1 2016 H1 2017 (CHF or %) EPRA PSP EPRA PSP EPRA PSP A. EPS 3.51 3.76 1.76 1.94 1.72 1.75 B. NAV 102.52 100.95 100.86 98.90 101.61 100.22 C. NNNAV 84.49 84.30 82.33 82.42 83.54 83.23 D. Net initial yield 3.5 3.6 3.7 3.7 3.5 3.6 E. Vacancy rate 9.1 9.3 8.8 9.1 8.5 8.7

  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 9M 2017 82 122.1 - 3.9 4’000.6 3.5 6.3 FY 2016 82 159.0 16.3 3’992.0 3.6 7.1 Geneva 9M 2017 16 19.6 7.2 749.7 2.7 17.4 FY 2016 16 30.5 - 18.8 741.0 3.2 21.6 Basel

  51. Slide 51: Rent by Use

    Rent by Use Other, 11% Gastronomy, 4% Parking, 5% Retail, 17% Office, 62% © PSP Swiss Property I Page 51

  52. Slide 52: Rent by Type of Tenants

    Rent by Type of Tenants Other, 17% Retail, 20% Government, 6% Gastronomy, 8% Services, 19% Financial Services, 9% Technology, 9% Telecommunication, 12% © PSP Swiss Property I Page 52

  53. Slide 53: Largest Tenants

    Largest Tenants Swisscom, 11% Google, 4% Roche, 2% Swiss Post, 2% Bär & Karrer, 2% Next five largest, 9% Other, 69% © PSP Swiss Property I Page 53

  54. Slide 54: Sustainability

    Sustainability Ecological sustainability  Energy consumption (kWh)  Water consumption (m3)  COe2 (heating and electricity) output (t resp. kg) Economic sustainability  Long-term oriented business model and investment policy  Quality- and value-oriented portfolio management  Long-term oriented

  55. Slide 55: Ecological Sustainability

    Ecological Sustainability Organisation  Responsibility: 3 employees (1 asset management, 1 constructions, 1 property management)  Implementation: constructions, property management, facility management Environmental key figures (specific figure/m2) in 2016 (2015)  Heating in kWh: 70.55 (69.8)  E

  56. Slide 56: Portfolio Grid

    Portfolio Grid 1 - 11: Examples of improvements due to investments (2008-2017) © PSP Swiss Property I Page 56 Source: Wüest Partner, June 2017.

  57. Slide 57: Zurich Area

    Zurich Area Bahnhofplatz 9 Bahnhofstr. 66 = Investment properties = Sites and development projects Bahnhofstr. 10 Bahnhofstr. 81 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 Place du Molard 7 Geneva Rue des Bains 31/33/35 Cours de Rive 13/15 Av. des Morgines 8/10 Rue de la Fontaine 5 = Investment properties = Development project 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 Grosspeterstr. 18/20 = Investment properties = 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 Kramgasse 49 Laupenstrasse 18/18a Seilerstrasse 8 Kramgasse 78 = Investment properties Eigerstrasse 2 Spitalgasse 9 © 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 = Development project 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 Corporate Communications & 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

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