The Züblin Immobilien Group increased its consolidated net income by 54% during the first half of its fiscal year 2007/2008, from CHF 21.2 million (c. €12m) up to CHF 32.7 million (c. €18.5m). The result arises from a combination of a significantly improved operating result, together with gains from property sales of CHF 14.7 million (c. €8.3m) and a further increase in market value of the real estate portfolio by CHF 15.4 million (c. €8.7m). Partially offsetting these gains were one-off-costs in the region of CHF 7.4 million (c. €4.2m) which the Company incurred as part of its preparation for REIT status in Germany. Züblin's vacancy rate declined markedly from 13.4% down to 11.7%.
Substantial revenue growth
As a result of acquisitions in France and Germany, combined with a decline in the Company's overall vacancy rate, rental income increased by 12% over the previous year. Furthermore, property values continued to advance, with strong gains in France, Germany and Switzerland. Adding to the rise in revenue was the net gain on the sale of two properties, which contributed a combined CHF 14.7 million.
Significant decline in operating expenses
Total operating expenses fell to CHF 17.4 million, or 28.7% of rental income, in the current period compared with CHF 19.1 million, or 34.9% of rental income, in the previous period.
Preparation for German REIT
During the first six months of fiscal year 2007/2008, the Züblin organization in Germany, under the name of ZIAG Immobilien AG, made preparations for an eventual capital market transaction. This resulted in non-recurring costs of CHF 7.4 million. ZIAG Immobilien AG has already been granted the tax beneficial "Pre-REIT" status, which brings with it market advantages, especially in terms of acquisitions.
Real estate portfolio exceeds CHF 2 billion as of 5 October 2007
As of 30 September 2007, Züblin's real estate portfolio was valued at CHF 1,850.7 million, virtually unchanged from 31 March 2007. On 5 October 2007, the Company's French subsidiary purchased an additional property in Paris for CHF 150 million, thereby increasing the total value of the real estate portfolio to above CHF 2 billion.
Vacancy rate cut to 11.7%
Through the efforts of the Company's internal asset management activities, as well as acquisitions of additional fully let properties in France and Germany, Züblin's vacancy rate was reduced from 13.4% as of 31 March 2007 down to 11.7%. The result in Switzerland is particularly satisfying, given that vacancies have fallen to below 5%, a level that has not been reached for some time.
Equity ratio increases to 38%
Assuming full conversion of all outstanding convertible securities, the Company's equity ratio increased to 38%, exceeding the strategic target level of 35%. Owing to the strong half year result, the return on equity also rose, increasing from 11.0% to 11.9%.
Fully diluted Net Asset Value increases
Despite the nominal value repayment of CHF 0.50 in September 2007, Züblin's fully diluted Net Asset Value per share increased from from CHF 10.94 at 31 March 2007 up to CHF 11.16 as of 30 September 2007.
Increase of minority interests in France
The Company's subsidiary in France completed a capital increase, combined with the issuance of mandatory convertible securities, during the summer of 2007. As a result, the economic minority interests in the French subsidiary increased from 31.8% up to 46.4%.
Source: Züblin
