PSP Swiss Property (SIX Swiss: PSPN) Q2 2026 Earnings Call

0:00 Ladies and gentlemen, welcome to the PSP Swiss Property Half Year Results twenty twenty six Conference Call. I am Myra, the Chorus Call operator. The

0:24 conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Giacomo Baldarini, CEO of PSP Swiss Property. Please go ahead, sir. Thank you. Good morning, everybody, and welcome to our release of the half year results. As always, I will do a quick rundown of the key highlights and then open for question as I have seen with our many participants. We are pleased to report strong half year results. Predominantly driven by the already announced disposal of the Rixty Park sale. We report an adjusted like for like growth of 1.7%. You remember that Q1 twenty twenty five, we had a one off effect on the costs, which would have had a negative impact. So without that, it is a 0.7%.

1:20 But on a like for like basis, adjusted to 1.7 We report a strong valuation gains of EUR112 million on the back of already a reported gain in Q1. And we demonstrate and continue to demonstrate a very strong cost discipline and very stable financials, which has been recognized by Moody's with an upgrade on the rating from an A3 to A2. Furthermore, we have seen again lower taxes, release of deferred taxes more than 10,000,000 in the first half, which clearly helps the earnings per share growth on an ALPRA basis. If you look at the market, we are confronted with a very healthy letting market.

2:09 The vacancy rate in the half year went slightly up to 4%. That's driven by the reclassification of the hotel de post. But also here, we have a strong visibility for letting successes. And here, we are already at the letting status of more than 70%. So the vacancy rate by year end will come back down to 3.5%. And we see some early signs of recovery in Basel, especially in the Peyter Merian Building. We had some letting successes, and we are in discussions for further lettings. So we see first signs of a recovery also in that market. On the transactional side, we continue to see a very strong market. Also, there are rather little opportunities in our target segment, but clearly, the valuation gains were demonstration by the strong market, but also by strong cash flow development.

3:05 Our outlook is confirmed at the EBITDA guidance of €335,000,000 plus the vacancy rate guidance is converted to 3.5% despite a slight increase in the half year. The top line will come a bit down by the year end due to the disposals of the Rifte Park and the Gurtin of last year and developments which are going on. But overall, we are on target to continue our shareholder friendly dividend policy throughout the year. So all in all, a

3:36 very solid and strong half year result. With that, I would like to end my entry remarks and hand over for Q and A. We will now begin the question and answer

4:09 The first question comes from the line of Ken Cargarier from ZKB. Please go ahead. Yes. Good morning, everyone, and thank you for taking my questions. The first two with regards to the financing, the credit financing. Firstly, I mean, I've seen that the duration is becoming shorter and shorter. What is the strategy behind here? Do you just intend to go more below three years? Or is it again something that you think about a longer duration? The second one is with regards to the pricing of potential bonds following the rating change by Moody's. What is the impact there we can expect in your opinion? And the last one is on the like for like growth. You have shown some adjustments here. Could you please detail the reasons for those?

5:00 Thank you, Ken. On the duration, as you remember, we are of the opinion, first of all, that we have a very strong inflation link in the portfolio of more than 90%. So we have a strong protection on inflation increase, which now you would then clearly be triggering the interest increase. We have seen that in the last cycle. Secondly,

5:24 the low debt and the lowering debt is an additional protection for us. And I think if you look back historically, we always navigated within a duration of two point five to four years. What we try to do is to have a constant maturity of the debt. And then whenever we have a maturity, we clearly look at the curve. So for us, a three year is fine. But obviously, whenever we see that there's a window, we go a bit longer. But with the protections I mentioned, with inflation linked and with the low debt,

6:00 I think we are fine to be a bit on the short end of the duration, which has been with our strategy over the last twenty five years. With regard to the pricing of the bond, I think it's a bit early days. I think what can be said that it's a rating improved. So it's clearly, if you look at the bond pricings and credit pricings, they're very strongly linked to a rating. How much this then makes up, we will see when we come up with the next bond pricing. We are in discussions continuously with the banks and the DCM teams, So I would expect an improvement. However, I think we talk on the single digit levels with regard to spread levels. And you have also keep in mind that those spread levels change also the time. So it's also difficult then to compare with former spread levels.

6:57 On the like for like adjustment, this is just if we would just report the like for like as we did and we report, it's a 0.7% increase.

7:08 If you recall last year on the Riviera Marche in Geneva in the first quarter, we had a very strong tax benefit, which reduced the Q1 costs disproportionately. If you take out that effect, the like for like of this half year would be 1.7%. It is only based on the letting activities without the single cost effect coming out of the Rudi Marche. Thank you very much.

7:39 The next question comes from the line of Holger Frisch from Raiffeisen. Please go ahead. Good morning from Raiffeisen and thanks for taking my question. I have two questions. First one would be on the two earn out agreements relating to the sale of the Richty Park and the acquisition of the property Schutziger Verpengasser. So what do the earn out agreements entail? And what is the time frame for the payments? And could you remind us of the annual rental income of the newly acquired property? That would be the first one. The earn outs, there are three earn outs on the Rifti Park, which are linked to the progress of the development and the permissions of the development.

8:25 These are earnouts which are linked to ten, ten, and 5,000,000. Probability, I would say, is difficult to say because it's really now in the hands of the new owner in that space, and we will review every quarter what the status is. And if the probability of having a successful potential earn out is higher than 50%, we will book out that earn out phase.

8:57 With regard to the Schutzengas, the new rental income is roughly $2,000,000 per year. Thanks. Then I hear you, Solve. Okay. Maybe better to speak. Second question would be, on the increase in the property values in Zurich. You said they were broadly based, but were there are they broadly based or were there individual properties that saw more significant increases

9:28 in the first half of the year? Well, I would say they are broadly based whatever is in CBD or close to CBD. Beside the one in the Livenbruy side which we reported to Q1, the others are all around the Bahn Of Strasse. There are some also in the Kingstweigstrasse, and clearly also the Hoeghlmann site, so some appreciation. There was also one in Geneva, which was above the top 10. Okay, great. Thank you.

10:12 The next question comes from the line of Aleksandr Petrovanov from Green Street. Please go ahead. Good morning and thank you for taking my questions. Two questions for me. What is the deferred taxes release expected for the full year? Is it still consistent with the guidance of about CHF 10,000,000? And second question, how are the discussions for the rest of the vacant area in Porto De Post in Lausanne progressing? And what areas are left to lease out? I think you said that the leases commencing in Q3 and Q4 are going to take you up to about 70% occupancy. Thank you. With regard to the guidance on deferred taxes, it's roughly $14,000,000 we see for the full year.

11:03 With regard to Hotel de Poste, we are in advanced negotiation with a tech company on a larger floor. The one which are left to be rented out is the highest floor, the 5th Floor, which, has a rooftop terrace. On the rooftop terrace, we have a concept for the summer periods. The other one is not super high ceiling. So I think here we have a couple of options. And then on the right and left side of the wings, we have some little floor plates. But then with the discussions with this tech company, which is active in the AI field, we are fairly advanced.

11:50 Beside that, we have a very little retail area left, so it's really been more of a filling up. We are still waiting for some we are still waiting for some building permissions for the fit out works. So this causes a slight delay on the pen starting their works. And clearly, with that and also slight delay in starting of the contracts. Here, we talk about that's one, two months delays in that. But everything is going very well. Thank you. Thank you. The next question comes from the line of Tommaso Huerta from UBS. Please go ahead.

12:44 Hey, good morning. I just have one question and it's fairly speculative, so apologies. But I'm wondering on the dividend, I mean, now that you've gone through the Dostoye Park sale with the spreads continuing to be at very tight levels, this balance sheet is super healthy. Is there any chance of a bigger dividend step up potentially coming through? Or is there anything you could share on that policy front? Thank you, Thomas. Well, it's not a speculative question. It's just the responsibility of the Board. I think what I can say, what we did in the past, in the last twenty five years, we never had special dividends.

13:30 When we had a little bit higher rent increase, it was due to rather acquisitions and rather strong lettings, which changed a bit the curve. I think our policy is to be a very predictable dividend contributor. I would not exclude it because it's not in my responsibility, but I would expect the continuous development of the dividend. Got it. Thanks. Ladies and gentlemen, that was the last question.

14:20 I would now like to turn the conference back over to Giacomo Valzarini for any closing remarks. Well, thank you very much to everybody for, the inquiries. We'll be in touch in the next couple of days, and I wish you all a very good day. Thank you.