BFW LIEGENSCHAFTEN AG Press Release 16 March 2016
The value of the real estate portfolio increased by 16% to CHF 401.9 million in 2015 (2014: CHF 346.6 million). The change is mainly due to the acquisition of the residential/commercial property at Hönggerstr 40 / Röschibachstr 22 in Zurich (purchase price of CHF 29.9 million), the successful development of the conversion projects and the completion of new building projects (CHF 18.3 million) as well as positive changes in the fair value of real estate investments (CHF 6.4 million). Target rental income increased by about CHF 4.5 million to CHF 21.8 million. The percentage of residential use in the portfolio was approximately 74%.
Net rental income increased by 17% to CHF 19.1 million (2014: CHF 16.3 million). The positive change is mainly due to the acquired property in Zurich and the completion of the new building projects in Kreuzlingen, Romanshorn, Grenchen und Zweidlen.
The net yield of investment properties was 3.9% and 4.2% without new building projects, respectively (2014: 3.7% and 4.3%). The vacancy rate excluding new building / conversion projects stood at 7.0% (2014: 4.7%). The higher vacancy rate is mainly due to the acquisition of the real estate at Hönggerstr / Röschibachstr in Zurich (at the time of the purchase vacancy rate of 15%) and the already higher vacancy rate by year-end 2014, when admicasa ag took over the administration mandate from VERIT. The vacancy situation at Hönggerstr / Röschibachstr has improved in the meantime with the vacancy rate declining to below 7% as of February 2016.
Direct operating expenses for investment properties decreased by TCHF 93 and amounted to CHF 3.3 million despite the larger investment portfolio. The decrease was mainly a result of lower costs of repair and maintenance. As a percentage of net rental income, direct operating expenses were at 17.2% (2014: 20.7%). Consulting expenses remained unchanged at CHF 0.7 million compared to last year. Administrative expenses increased by TCHF 254 to CHF 2.0 million, mainly as a result of the higher management fee due to the increased portfolio value. The management fee for the service agreement with bfw vermögensverwaltung ag was CHF 1.7 million (2014: CHF 1.5 million).
The valuation of the investment portfolio by KPMG AG, the independent real estate evaluator, resulted in positive changes in the fair value of real estate investments in an amount of CHF 6.4 million as per 31 December 2015 (2014: CHF 3.6 million). The increase in market values is mainly due to a reduction of the discount rate applied by KPMG for residential and residential/commercial real estates, to the acquisition of the property Hönggerstr / Röschibachstr and due to the successful development of the conversion projects as well as to the completion of the new building projects.
In 2015, the Company's EBIT stood at a solid profit of CHF 19.5 million (2014: CHF 14.1 million). The substantial increase of 38% compared to the previous year was mainly due to the higher rental income and the profit from the valuation of the investment portfolio.
Net financial expenses were at CHF 3.7 million (2014: CHF 2.9 million). The increase is a result of the higher mortgage liabilities in conjunction with the acquisition of the property in Zurich and the financing of the completed new building projects in Romanshorn and Zweidlen. In addition, the fix mortgages which were concluded by year- end 2014 and at the beginning of 2015, resulted in a slight increase of the average interest rates, and the negative interest rates, introduced by the Swiss National Bank, burdened the Company's swaps by about CHF 0.4 million.
Due to the change in the interest rate level as per year-end 2015, the fair value reflection of the interest rate swaps and receiver swaptions led to a negative effect before taxes of CHF 2.9 million (2014: negative effect of CHF 7.6 million). In accordance with IAS 39, the interest rate swaps and receiver swaptions must be valued at the current fair value at each balance sheet date and changes in the fair value have to be reflected in the income statement. These fair value adjustments (positive or negative) do not impact cash flow and do not affect the Company's operating effectiveness or its dividend policy at all.
Taking into account the fair value of the interest rate swaps and receiver swaptions, the earnings including effects from changes in the fair value of the real estate investments and deferred taxes amounted to CHF 10.2 million (2014: CHF 2.8 million). Excluding the fair value changes of the interest rate swaps and receiver swaptions, net earnings for 2015 were at a very solid level of CHF 12.6 million (2014: CHF 9.1 million). Net earnings per share excluding the changes in fair value amounted to CHF 2.42 (2014: CHF 1.75).
Total assets increased by 9% compared to the previous year and amounted to CHF 416.6 million (2014: CHF
381.5 million). This was mainly due to the investments made and the increase in the value of the portfolio.
During the year under review, in relation with the real estate acquisition and the completion of new building projects, new mortgage liabilities increased by CHF 28.1 million, net. A fix mortgage of CHF 17.5 million with a maturity of 8 years was concluded for the acquired property in Zurich. For the completed new building projects fix mortgages of CHF 6.5 million with a maturity of 9 years was concluded for "Romanshorn", and of CHF 5.75 million at LIBOR for "Zweidlen". Out of total mortgages of CHF 196.5 million, CHF 62.0 million are secured long-term through interest rate swaps and receiver swaptions, CHF 27.3 million with fix mortgages of 6 years and CHF 41.4 million with fix mortgages of 7 to 8 years, respectively. The average remaining life of maturity of mortgages as at 31 December 2015 was 3.9 years (31 December 2014: 4.3 years).
Equity amounted to CHF 189.9 million as at 31 December 2015, representing a very solid equity ratio of 45.6%. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the equity ratio was at 48.5% as of balance sheet date.
The Net Asset Value was CHF 36.58 (31 December 2014: CHF 35.92). The change in the Net Asset Value is attributable to the pay-out of capital contribution of CHF 6.7 million as per April 2015 and to an earnings contribution of CHF 10.2 million. Excluding the fair value changes in the interest rate swaps and receiver swaptions, the Net Asset Value was at CHF 38.93 in 2015 (31 December 2014: CHF 37.80).
During the reporting year 2015, four new building projects with 140 new apartments were completed, each after about two years of construction. Due to these completions target rental income of the portfolio will increase to about CHF 22.5 million. The two conversion projects "Schaffhauserstrasse" in Zurich and "Freiestrasse" in Weinfelden are progressing according to plan, and will further increase the portion of target rental income related to residential use after the expected completion in spring 2016 and summer 2017, respectively.
Given the very good operating results 2015 and the long-term sound prospect of the Company, the Board of Directors maintains its long-term pay-out policy and proposes to the General Meeting of Shareholders on 27 April 2016 a payment in cash out of the capital contribution reserves of CHF 1.35 per registered shares category "A", and CHF 0.135 per registered shares category "B". The proposed pay-out corresponds to an attractive yield of 4.01% (based on the closing price of the registered shares "A" at 31 December 2015).
The investment strategy of bfw liegenschaften ag with its focus on residential properties proves successful and the Company is confident that the real estate market in Switzerland, especially for residential properties, will remain attractive in the long-term.
The balance sheet structure with its solid equity ratio enables the Company to further expand its portfolio with additional real estate investments or the inclusion of new projects. As before, bfw liegenschaften ag will remain its focus on high quality projects and attractive yields.
The Board of Directors will propose to the General Meeting of Shareholders 2016 to elect Serge Aerne as a new member of the Board. Serge Aerne has a wide experience in areas such as pension funds, investment foundations, asset management and in the real estate sector and he will ideally complement the existing Board of Directors. Serge Aerne will also join the Management Board as CMO as of 1 April 2016 and contribute with his relationships to institutional investors and pension funds, which will create additional opportunities for the Company to further expand its real estate portfolio.
The contractual partners of bfw liegenschaften ag adjust their structures to focus entirely on the real estate sector. The previously existing service contract with bfw vermögensverwaltung ag has been cancelled retrospectively as of 1 January 2016 and a new service contract has been entered with admicasa management ag. admicasa ag, which has been responsible for the administration of the individual properties owned by bfw liegenschaften ag since 1 January 2015, will change its name to admicasa verwaltung ag. The conditions of the contracts regarding the service contract and the administrative contract for the properties will remain unchanged for bfw liegenschaften ag. admicasa management ag and admicasa verwaltung ag will merge with admicasa invest ag, a real estate company focused on special properties, and will be transferred into a Holding company, which will be owned by Beat Frischknecht (Board member and CEO) with 48%, Reto Borner (CFO) with 20% and Serge Aerne with 30%.
Curriculum Vitae Serge Aerne Born 1979, Swiss citizen Independent entrepreneur
Education
Business economist and Master in Business Administration
Professional activities
Serge Aerne is an experienced manager in the areas of investment foundations, funds, asset management and pension funds. He started his professional career in trusts and was later on active as a securities specialist for a major bank. As deputy of the internal control of a major banking institute, he was responsible in terms of compliance with laws and regulations of real estate funds and the merging of such funds. In 2013, he was co-founder of an asset management company which he led successfully for over 5 years. In 2010, he joined a pension fund and as a Director was involved in investment foundations, asset management, funds and pension funds. In 2011, he founded pension fund Phoenix and the corresponding administration company and was the major shareholder and CEO. After 4 years, he sold the administration company which today has more than 75 employees, over 32,000 insured persons and about CHF 4 billion of assets under management (about CHF 1.2 billion in properties) to a cantonal bank and private investors. Since then he entirely concentrates on the real estate business area. For the last 18 years, he has also been co-owner of a GU/TU contracting company, which constructed more than 300 apartments/houses with a volume of about CHF 240 million. His main activities in this company are in the fields of sales and finance.
Other activities and vested interests
Serge Aerne has various consulting mandates with Swiss pension funds. He owns a 49% participation in admicasa ag, Frauenfeld, and after the restructuring 30% of admicasa holding ag, Frauenfeld (see change in organization of contractual partners of bfw liegenschaften ag above).
Contacts:
Beat Frischknecht Reto Borner
Chief Executive Officer Chief Financial Officer
+41 52 728 01 02 +41 52 728 01 06
beat.frischknecht@bfwliegenschaften.chreto.borner@bfwliegenschaften.ch
Agenda:
27 April 2016 Ordinary General Meeting of Shareholders
13 September 2016 Publication Half-Year Results 2016 and Half-Year Report 2016
Income statement | 2015 | 2014 |
in TCHF | ||
Rental income | 19 147 | 16 349 |
Total operating income | 19 147 | 16 349 |
Direct operating expenses for investment properties | - 3 298 | - 3 391 |
Consulting expenses | - 701 | - 662 |
Administrative expenses | - 2 013 | - 1 759 |
Total operating expenses | - 6 012 | - 5 812 |
Changes in fair value of real estate investments | 6 400 | 3 607 |
EBIT | 19 535 | 14 143 |
Financial income | 29 | 56 |
Financial expenses | - 3 734 | - 2 967 |
Amortization interest rate swaps | - 227 | - 227 |
Valuation of the fair value of interest rate swaps | - 2 887 | -7 552 |
Taxes | - 2 538 | - 621 |
Earnings incl. effects from changes in fair value of real estate investments / deferred taxes | 10 178 | 2 833 |
Earnings excl. effects from changes in fair value of real estate investments / deferred taxes | 5 979 | 573 |
Earnings excl. fair value adjustments of interest rate swaps / deferred taxes | 12 574 | 9 100 |
Balance sheet as at 31 December | 31.12.2015 | 31.12.2014 |
in TCHF | ||
Total assets | 416 645 | 381 482 |
Total liabilities | 226 744 | 195 011 |
Equity | 189 900 | 186 471 |
Equity ratio | 45.6% | 48.9% |
Equity excl. fair value adjustments of interest rate swaps / deferred taxes | 202 072 | 196 247 |
Equity ratio excl. fair value adjustments of interest rate swaps / deferred taxes | 48.5% | 51.4% |
Net Asset Value (NAV) in CHF | 36.58 | 35.92 |
Net Asset Value excl. fair value adjustments of interest rate swaps / deferred taxes in CHF | 38.93 | 37.80 |
Total investment portfolio | 31.12.2015 | 31.12.2014 |
Total value of real estate portfolio in TCHF | 401 904 | 346 602 |
Total number of investment properties | 44 | 41 |
Total number of new building projects | 2 | 4 |
Yield net | 3.9% | 3.7% |
Yield net excl. new building projects | 4.2% | 4.3% |
Vacancy rate | 11.7% | 5.0% |
Vacancy rate excl. new building projects | 7.0% | 4.7% |
Ø interest rate excl. amortization of interest rate swaps | 2.0% | 1.9% |
Ø interest rate incl. amortization of interest rate swaps | 2.2% | 2.0% |
Ø remaining life to maturity of mortgages | 3.9 years | 4.3 years |
The Annual Report 2015 of bfw liegenschaften ag (German version) is available at www.bfwliegenschaften.ch- Investor Relations - Financial Reports. Direct linkhttp://www.bfwliegenschaften.ch/index.php/en/investor-relations/financial-reports
Information on bfw liegenschaften ag
www.bfwliegenschaften.ch
bfw liegenschaften ag is a real-estate company with headquarters in Frauenfeld in the canton of Thurgau, Switzerland. It focuses on attractive residential properties in commuting areas close to business centres in the German-speaking part of Switzerland. The registered A shares of bfw liegenschaften ag are listed on the SIX Swiss Exchange (Symbol BLIN, Securities Number 1820611, ISIN Number CH 001 820 6117).
BFW Liegenschaften AG issued this content on 16 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 March 2016 08:13:24 UTC
