Novavest Real Estate (NREN) H1 2024 earnings summary

Executive summary

• Successful merger with SenioResidenz, approved by over 94% of shareholders, created a resilient and diversified real estate portfolio exceeding CHF 1 billion in value across 17 cantons.

• Portfolio now includes 73 income properties and 2 projects, with a 59% residential share and a focus on "Living for Young and Old."

• Enhanced earnings base, improved risk profile, and reduced vacancy rate to 3.1%.

• Strategic focus on tenant needs, operational excellence, and ESG, with synergies expected to positively impact profit from 2025.

• Board changes and new members appointed following the merger.

Financial highlights

• Pro forma H1 2024 rental income reached CHF 20.9 million, up 41% year-over-year; reported H1 2024 rental income (Swiss GAAP FER) was CHF 15.1 million.

• Pro forma net profit excluding revaluation effects grew 28% to CHF 8.4 million; including revaluation, net profit was CHF 6.4 million.

• Gross yield increased to 4.4%, net yield to 3.5%; vacancy rate reduced to 3.1%.

• NAV per share at CHF 40.23 as of 30.06.2024; share price CHF 33.70.

• Moderate portfolio devaluation of 0.2% and higher interest expenses due to the current rate environment.

Outlook and guidance

• Synergy effects from the merger (CHF 0.9 million) to be realized in H2 2024, with positive profit impact expected from 2025.

• Additional rental income of CHF 0.6 million p.a. expected from the St. Gallen project starting August 2024.

• Continued focus on early renewal of expiring leases, value-enhancing investments, and sustainability initiatives.

• Ongoing optimization of leverage and commitment to attractive dividend policy.

• Active monitoring of macroeconomic risks, with real estate seen as an attractive inflation hedge.