• Revenue increased by 10%
• Like-for-like rental income up 2.5%
• Improved EBIT margin by 0.9% to 9.7% in the Real Estate Services segment
• Successful sale of 10 properties at 23% above valuation
• NAV per share of CHF 93.38 excluding deferred taxes with regard to properties

Stéphane Bonvin, CEO of the Investis Group said: “In the first six months of the 2022 financial year, we set strong accents in both segments: continuation of our solid growth trajectory in the Real Estate Service segment along with an improvement of the EBIT margin to a solid 9.7%. In the Properties segment operating cash flows were further improved, while a portfolio of ten properties was sold very successfully at a profit of 23% above their balance sheet value. This successful sale and further significant revaluation effects underline the quality of our portfolio. A consistently strong performance of the group.”

Strong Group results
The Group increased its revenue by 10% to CHF 112 million (prior year: CHF 102 million). Both segments contributed to this growth. Group EBITDA before revaluations and disposal gains was CHF 27 million (CHF 25 million).
Continued higher cash flows from investment properties and a decline in the average real-term discount rate to 2.75% (2.84% as at 31.12.2021) for the entire portfolio led to further increases in value of CHF 64 million. Together with the profit from the disposals of CHF 58 million, this resulted in another impressive operating result (EBIT) of CHF 148 million (CHF 155 million). The prior year was characterised by particularly high revaluation gains of CHF 131 million.

Excellent operating performance by both segments
The Properties segment achieved revenue of CHF 31 million (+4.8%). There was an excellent 2.5% rise in like-for-like rental income. This increase is also due to various renovation projects, some of which generated lower rental income in the previous period. The vacancy rate was further decreased to 1.4% (2.2% as at 31.12.2021). Gross rental income as at 30.6.2022 stood at CHF 55.8 million (CHF 64.2 million as at 31.12.2021). The segment achieved a noteworthy EBIT of CHF 142 million (CHF 151 million). This includes the previously mentioned revaluation effects as well as the disposal gains. 

The Real Estate Services segment saw revenue amounting to CHF 83 million (CHF 74 million). In the Property Management business revenue grew by 4.8% to CHF 31 million. Rents under management were successfully increased again to reach CHF 1.58 billion (CHF 1.51 billion as at 31.12.2021). Facility Services achieved revenue of CHF 52 million (CHF 45 million). The excellent EBIT margin in this segment of 9.7% (8.8%) underlines the continuous effort to increase quality and cost efficiency. 

Financial result
Financial expenses amounted to CHF 1.1 million; considerably lower than the year-back (CHF 2.1 million). The average interest rate in the 1st half of 2022 was reduced again by 9 basis points to 0.35%. Last year’s financial income of CHF 2.7 million (CHF 0.3 million as at 30.6.2022) included a positive effect from the sale of a minority interest of CHF 2.6 million.

Income taxes
With a tax rate of 14.3%, income taxes amounted to CHF 21.0 million.

Net profit
Net profit reached an excellent CHF 126 million (CHF 132 million) and earnings per share CHF 9.86 (previous year: CHF 10.39). Net profit excluding revaluation effects came to CHF 70.5 million (CHF 19.6 million).

Very sound balance sheet
Total assets came to CHF 1.8 billion as at 30 June 2022, with the equity ratio rising to a very comfortable 60% (31.12.2021: 53%). The property portfolio was valued at CHF 1,551 million. On the balance sheet date, it comprised 151 buildings with 2,563 residential units. In relation to the value of the property portfolio, the loan-to-value (LTV) is very conservative at 31.7% (interest-bearing financial liabilities of CHF 491 million). The LTV will be reduced even further in the second half of the year, from today's perspective to around 25%. As a result of the disposals, deferred tax liabilities also decreased to CHF 147 million (CHF 165 million).

Net asset value (NAV) per share excluding deferred taxes with regard to properties increased further and stood at CHF 93.38 (31.12.2021: CHF 88.73).

Market environment and outlook for 2022
The current uncertain situation and its consequences are also affecting the Swiss economy. In order to combat rising inflation, the Swiss National Bank (SNB) raised its key interest rate on 17 June 2022 for the first time in 15 years, by 0.5 percentage points to –0.25%. Inflation had already made itself felt last year, mainly as a result of pent-up demand among consumers after pandemic lockdowns. A sharp increase in the money supply over recent years is making it difficult for many countries, including Switzerland, to fight inflation. 

Between May 2021 and May 2022, rents for all non-new homes offered on the free market in the canton of Geneva rose by +1.0% (OCSTAT Office Cantonal de la de statistique de Genève). This increase is higher than in recent years (+0.6% in 2019 and +0.8% in 2020 and 2021). Rents for small apartments (the core market for Investis) are rising faster than those for large ones: the change over the same period is +1.7% for studios, +1.3% for two-room apartments and +1.2% for three-room apartments, while rents for five- and six-room apartments are more modest (<1%). This is partly because smaller apartments tend to see more frequent changes of tenants. In the city of Geneva, rents are going up by +1.1% overall, while the population of the canton of Geneva is growing more strongly than before (+0.8% or 3,965 people in the last twelve months according to OCSTAT). Immigration to Switzerland as a whole, and to the cantons of Geneva and Vaud, remains positive and is rising again more strongly after a period of slower growth during the pandemic. The real estate market in the cantons of Geneva and Vaud has continued to benefit disproportionately. Increased immigration remains an important driver of demand and of changes in vacancy rates. In Switzerland overall the vacancy rate is likely to fall from the current 1.5% to 1.2%. As at the end of June 2022, the vacancy rate in the canton of Geneva has fallen to 0.37% from an already low 0.51% as at June 2021, the lowest level since 2013.

93% of the Investis investment portfolio is made up of residential property containing mid-priced apartments in central locations in the Lake Geneva region. Its concentration in this region is the Investis Group’s USP. Thanks to the low LTV, there is scope to optimise the existing portfolio in the Properties segment by means of targeted purchases. If no attractive acquisitions are available, funds are instead used to reduce debt.

At the beginning of the year, a new organisational structure was introduced in the Real Estate Services segment in order to align the brands more closely with customer needs. Further positive effects are expected in the second half of 2022. The segment continues to focus on providing high quality services.

For the 2022 financial year as a whole, Investis expects both segments to continue performing very well. Given the profits achieved on disposals in the 1st half and despite the related lower rental income in the second half of the year, Investis expects a doubling of net profit excluding revaluation effects for the entire group compared to the previous year.