Zürich (pta008/09.02.2021/07:00) -
=> Earnings before taxes increased to more than CHF 150 million and NAV per share to more than CHF 50
=> Rental income increased by over 40 percent to CHF 55 million (prior year: CHF 39 million)
=> Real estate portfolio grows to more than 23,000 apartments (prior year: 13,000 apartments) bringing the expected rental income for 2021 to more than CHF 95 million
=> Market value of the portfolio rises to more than CHF 2 billion with an unchanged gross yield of 5.0 percent
=> Significant increase in operating margin from 71 to 75 percent
=> Vacancy ratio in existing portfolio further reduced by around 25 percent to 7.0 percent (prior year 9.3 percent) despite COVID-19
=> LTV decreases to 57.8 percent (prior year: 59.6 percent); NAV per share rises to more than CHF 50 per share despite extraordinary balance sheet growth
Peach Property Group AG, an investor specialising in portfolio management in Germany with a focus on residential real estate, has been able to continue its strong, profitable growth during fiscal year 2020 based on preliminary, unaudited figures. Rental income rose by more than 40 percent versus prior year to around CHF 55 million; like-for-like this corresponds to a growth of 4.7 percent of in place rents.
Earnings before taxes increased in 2020 by around 39 percent to more than CHF 150 million, after some CHF 110 million a year before. During the past fiscal year, the acquisition of more than 10,800 residential units in Germany was a significant growth driver. With these purchases in several federal states Peach Property Group strengthened its already existing regional footprint. For the integration, Peach Property builds on its proven digital platform for tenant management and will hence be able to realize significant synergies and economies of scale. To further boost its digital capabilities, SAP S/4HANA was successfully implemented during the reporting period as a uniform and consistent backend system for the areas of tenant accounting, group accounting as well as CAPEX management. The newly acquired portfolios have already been integrated smoothly and rapidly at the end of the year. As a result of further in-sourcing and the associated synergies and economies of scale, the operating margin increased from around 71 to 75 percent. Despite the rise in rental income by more than 40 percent, overhead cost only increased by a disproportionately low rate of 15 percent during the same period.
Including the newly acquired apartments, the portfolio grew by around 86 percent since the end of 2019 to more than 23,000 units with a lettable area of more than 1.5 million square meters. The market value of the real estate portfolio rose significantly because of this substantial growth to more than CHF 2 billion, after CHF 1.1 billion at the end of 2019. The portfolio is valued at around CHF 1,350 per square meter and yields an attractive 5.0 percent (gross).
Focus on tenants; vacancy rate considerably reduced
Apart from the acquisitions, operational progress of the existing portfolio properties also contributed significantly to the growth in 2020. Despite the considerable restrictions due to the COVID-19 pandemic, Peach Property Group was able to sustain and even enhance its tenant-oriented approach. Building on its digital platform and the proprietary Peach App, tenant communication was upheld on a high level without interruption even during the multi-stage lockdown phase last year. Peach Property Group still responds individually to the needs of its tenants and implements them efficiently and rapidly.
Consequently, Peach Property Group also significantly reduced the vacancy ratio in 2020 versus prior year, from 9.3 percent to now just under 7.0 percent for its existing portfolio. Combined with the new acquisitions with its slightly higher vacancy, the vacancy ratio at the end of 2020 was 7.9 percent.
Equity ratio increased, LTV reduced
Alongside the increase in real estate values through its active asset management and acquisitions, Peach Property performed a capital increase in October 2020 with a view to further strengthen its balance sheet. The capital increase was oversubscribed and brought CHF 230 million of fresh capital into the company. Jointly with its strong operational result, this enabled Peach Property Group to further reduce its LTV from 59.6 percent to 57.8 percent based on preliminary numbers. Despite the extraordinary growth in the balance sheet, the equity ratio rose to more than 34.0 percent (after 32.9 percent during the previous year). NAV per share climbed very significantly to more than CHF 50 per share.
Good start into 2021
For the current fiscal year 2021 Peach Property Group is very optimistic. The newly acquired residential units were, as planned, fully recognized in the balance sheet at the end of 2020 and were already integrated into the digital platform on January 3, 2021. Moreover, five new Peach Points were opened at the beginning of the year despite the ongoing lockdown restrictions. Peach now relies on a network of 12 Peach Points, which are all interconnected through a uniform digital tenant platform. The group will also continue to actively manage its apartments with currently around 230 apartments in scheduled refurbishment. Already around 40 percent of those originate from the newly acquired portfolios. Consequently, the Group anticipates further strong growth in rental income in 2021 by an estimated 75 percent to more than CHF 95 million. In parallel to this further growth, the group will achieve economies of scale and expects a further increase in operating margin.
Dr. Thomas Wolfensberger, CEO of Peach Property Group AG comments: "Our business model proved to be extremely crisis-proof and successful during the challenging year 2020. The demand for affordable residential space in commuter belts of German conurbations continues to be unbroken. This is reflected in a reduced vacancy ratio and the increase in like-for-like rental income. Last year our focus was again on satisfying the needs of our tenants - thanks to the high degree of digitalization this has worked smoothly also through virtual channels. At the end of 2020 we have not only considerably expanded our property portfolio through the integration of last year's acquisitions but have also grown out team. With a current headcount of around 170 colleagues, we have started into the new fiscal year with full motivation and intend to continue our growth course in 2021. With Ares Capital Management we have a strong partner at our side, which will allow us to play an even more active role in the German residential property market."
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Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
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About Peach Property Group AG
The Peach Property Group is a real estate investor and developer with an investment focus in Germany. The group stands for many years of experience, competence and quality. Innovative solutions for state-of-the-art living needs, strong partnerships and a broad value chain round off the profile. The portfolio consists of high-yield portfolio properties, typically in B-cities in the catchment area of conurbations. In addition, the Group develops real estate for its own portfolio or for condominium marketing. In the latter area, the Group concentrates on A locations and properties with attractive architecture and upscale furnishings for an international clientele. Its activities span the entire value chain from evaluating locations through to acquisitions and also active asset management and property sales or lettings.
Peach Property Group AG has its registered office in Zurich and the Group is headquartered in Cologne. Peach Property Group AG is listed on SIX Swiss Exchange (PEAN, ISIN CH0118530366). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer, Dr. Christian De Prati, Kurt Hardt and Klaus Schmitz.
More information at http://peachproperty.com(end)
|emitter:||Peach Property Group AG|
|contact person:||Dr. Thomas Wolfensberger and Dr. Marcel Kucher|
|phone:||+41 44 485 50 00|
|stock exchanges:||listed in SIX Swiss Exchange; open market (free market) in Frankfurt, free market in Stuttgart; open market in Berlin|