Swiss Prime Site AG lifted its net profit by 4.89% to CHF 49.3 million for the fiscal year 2004, further proving itself to be an exceptionally highearning real estate investment company.
Despite the general weakness in demand for office space, net rental income soared by 17.21% to CHF 128.7 million. At the General Assembly of Shareholders the motion will be for a distribution of CHF 12.50 per share (previous year CHF 12.00). Once again, the payout will be in the form of a reduction of nominal value, which has attractive tax beneftis for Swiss private investors. This corresponds to a cash yield of 4.40% on the closing share price at year end. Net asset value per share (NAV before deferred taxes) increased by 2.83% to CHF 280.81 during the year under review. In December 2004, Swiss Prime Site initiated the acquisition of Maag Holding AG. The deal expands the real estate portfolio to CHF 3.3 billion, corresponding to 46.56% growth.
Sustained high demand for the space rented out by Swiss Prime Site sent net rental income for 2004 soaring by 17.21% to CHF 128.7 million. Operating profit (EBIT) climbed by 13.79% to CHF 100.7 million (excluding revaluations by 21.49% to CHF 99.5 million) and widened the EBIT margin from 74.16% in 2003 to 76.07% for 2004. At CHF 49.3 million, net profit was 4.89% higher than the year-back level. Without the revaluation effects, however, it increased by 27.79% to CHF 60.7 million. As in the previous year the revaluations, which were conducted in association with WÃ¼est & Partner, produced an increase in fair market value. This was CHF 1.2 million net, compared with CHF 6.6 million in 2003.
Real estate holdings of CHF 3.3 billion thanks to the Maag acquisition
The acquisition of Maag Holding AG that was initiated in December 2004 has added 80 properties and the Maag industrial complex (Maag-Areal) to the Swiss Prime Site portfolio. The value of the real estate portfolio has grown by more than CHF 1 billion to CHF 3.3 billion, thanks mainly to the Maag deal. As a result, Swiss Prime Site AG expanded its portfolio by 46.56% during the 2004 financial year.
In addition to Maag, Swiss Prime Site has acquired a number of first-class properties in central locations in Baden, Geneva, Rapperswil, St. Gallen and Zurich (Bahnhofstrasse). At the Opus development in Zug, which comprises eight commercial buildings in total, Swiss Prime Site gave the green light during the second half of the year for construction to start on the remaining three buildings. Of these three buildings, two are already rented in full. Negotiations with potential tenants for the third property are currently under way.
Maag acquisition nearing completion
The most important event in the near six-year history of Swiss Prime Site AG is the acquisition of Maag Holding AG, which was initiated in December 2004 and has since proceeded to plan. At the end of the additional acceptance period of the public tender offer, on 10 February 2005, Swiss Prime Site held 85.94% of all shares in Maag Holding AG. At the end of April 2005, the Annual General Meetings of the two companies will decide on a merger in which all of the assets and liabilities of Maag Holding AG would be transferred to Swiss Prime Site AG.
In order to complete the merger, a motion will be put before the Annual General Meeting of Swiss Prime Site AG that the company's shares should be split in a 1:5 ratio and the remaining SPS shares required for the exchange with outstanding Maag shares be created by means of authorised capital of a maximum of CHF 13 789 108.00. This would correspond to 2.01% of the present share capital of Swiss Prime Site AG. The newly created SPS shares would be paid up using a corresponding proportion of the surplus assets of Maag Holding AG.
Coveted convertible bond
In January 2005, Swiss Prime Site issued a convertible bond in the amount of CHF 170 million (including greenshoe option) with a five-year term and a 2% coupon. The bond attracted great interest from Swiss and foreign investors alike and was ten times ov