HIAG Immobilien : Half Year Report 2024

Half-Year Report

2024

HIAG

Half-Year Report 2024

Content

Introduction	4
Key Figures	5
Management Report	8
Letter to Shareholders	9
Business Perfomance	11
Financial Statements	16
Consolidated Balance Sheet	17
Consolidated Income Statement	18
Consolidated Cash Flow Statement	18
Consolidated Statement of Shareholders' Equity	19
Consolidated segment reporting	20
Notes to the Consolidated Financial Statements	20
Alternative Performance Measures	33

General Property Details	35
Yielding Portfolio	36
Development Portfolio	38
Project Details	39

2024 Half-Year Report

"HIAG designs destinations that offer living space for people and space for the long-term development of companies."

HIAG
Half-Year Report 2024	Introduction	Management Report

Introduction

Financial Statements

General Property Details

4

Introduction	4
Key Figures	5

HIAG
Half-Year Report 2024	Introduction	Management Report	Financial Statements

In a Nutshell
Key Figures	6	7	8

5		G	H
F
	1

E	A

4 D

C

3B

according to use ●	2
according to canton ●

General Property Details

5

Market value of investment properties by type of use1 as at 30/06/2024

1	Industry / commercial	32.6%
2	Building land	25.2%
3	Retail	11.2%
4	Office	10.9%
5	Residential	10.3%
6	Distribution / logistics	6.0%
7	Residential / commercial property	2.3%
8	Miscellaneous	1.5%

1 The calculations of the types of use are based on the main use of the properties.

90% of HIAG's investment property portfolio is situated in the regions Zurich, Aargau, Geneva, Solothurn, Zug, and Basel-Landschaft.

Market value of investment properties by canton as at 30/06/2024

A	Zurich	32.3%
B	Aargau	23.8%
C	Geneva	12.2%
D	Solothurn	8.0%
E	Zug	7.5%
F	Basel-Landschaft	6.5%
G	St. Gallen	3.5%
H	Miscellaneous	6.2%

HIAG

Half-Year Report 2024

Investment property portfolio in CHFm

Introduction

Management Report

Financial Statements

General Property Details

Potential property income, vacancy and vacancy rate in CHFm

6

							1,926.4
				1,784.4
1,637.8			1,223.2
	1,025.8				1,137.7
								703.2
					646.8
	612.1

1,897.7	1,949.1
	1,152.2			1,118.6
				830.5
	782.5

69.1

13.2

9.1

70.7

10.7

7.6

77.2

6.4

4.9

75.1

4.0

3.0

80.3

3.5

2.8

2020

2021

2022

2023

H1 2024

31/12/2020 31/12/2021 31/12/2022 31/12/2023 30/06/2024

 Development portfolio  Yielding portfolio

Net income in CHFm

41.9

22.1

56.1

36.2

22.1

 Potential property income  Vacancy

• Vacancy rate in %

Property income in CHFm

				32.4
29.5		30.6

35.3

37.1

H1 2020

H1 2021

H1 2022

H1 2023

H1 2024

H1 2020

H1 2021

H1 2022

H1 2023

H1 2024

HIAG

Half-Year Report 2024

Key financial figures

Introduction

Management Report

H1 24

H1 23

Financial Statements

Alternative performance measures¹

General Property Details

7

H1 24

H1 23

Property income	TCHF	37,131	35,252
Revaluation of investment properties	TCHF	11,585	-6,994
-	thereof yielding portfolio	TCHF	1,008	-14,769
-	thereof development portfolio	TCHF	10,576	7,775
EBITDA	TCHF	45,980	34,744
Net income	TCHF	36,191	22,141
Net income excl. revaluation	TCHF	25,521	27,418
Cash flow from operating activities	TCHF	54,218	10,879
Cash flow from investment activities	TCHF	-36,322	86,356
Cash flow from financing activites	TCHF	-22,695	11,793
			30/06/2024	31/12/2023
Cash and cash equivalents	TCHF	20,533	25,300
Shareholders' equity	TCHF	1,085,144	1,081,139
Equity ratio	%	53.6	53.9
Return on equity	%	6.7	4.4
Average interest rate for financial liabilities (period)	%	1.7	1.6
LTV-ratio, gross	%	40.5	41.1
LTV-ratio, net	%	39.5	39.8
Balance sheet total	TCHF	2,025,325	2,004,276
Full-time employees	FTE	84.6	81.8
-	thereof real estate	FTE	70.6	69.8
- thereof Jaeger et Bosshard SA	FTE	14.0	12.0
Key portfolio figures		30/06/2024	31/12/2023
Investment property portfolio	TCHF	1,949,091	1,897,682
-	thereof yielding portfolio	TCHF	1,118,602	1,115,208
-	thereof development portfolio	TCHF	830,489	782,474
Gross yield yielding portfolio	%	5.6	5.4
Net yield yielding portfolio	%	4.7	4.2
Market value of investment properties	TCHF	1,896,777	1,878,073
Number of investment properties	Number	111	111
-	thereof yielding properties	Number	63	64
-	thereof development properties	Number	48	47
Weighted Average Unexpired Lease Terms (WAULT)
investment property portfolio	Years	6.8	6.7
WAULT top 15 tenants	Years	8.6	9.0
Investments in investment properties	TCHF	43,647	90,512
-	thereof yielding portfolio	TCHF	2,386	10,296
-	thereof development portfolio	TCHF	41,221	77,166
-	thereof acquisitions/consolidations	TCHF	25	3,050

Adjusted NAV	TCHF	1,219,941	1,179,069
Adjusted NAV per share	CHF	120.77	116.64
Funds from operations (FFO) I	TCHF	27,779	20,106
FFO I per share	CHF	2.7	2.0

1 Please refer to "Definition of Alternative Performance Measures" on page 33 et seq.

Key figures per share		H1 24	H1 23
Number of outstanding registred shares	Number	10,101,696	10,104,439
Number of weighted outstanding registred shares	Number	10,102,683	10,098,779
Earnings per share (EPS)	CHF	3.58	2.19
EPS excl. revaluation	CHF	2.53	2.72
		30/06/2024	31/12/2023
Shareholders' equity (NAV) per outstanding registered share,
excl. deferred taxes	CHF	115.82	115.16
Shareholders' equity (NAV) per outstanding registered share,
incl. deferred taxes	CHF	107.42	106.96

HIAG
Half-Year Report 2024	Introduction	Management Report	Financial Statements	General Property Details

Management Report

Management Report	8
Letter to Shareholders	9
Business Performance	11

8

HIAG
Half-Year Report 2024	Introduction

Management Report

Financial Statements

General Property Details

9

Letter to

Shareholders

Dear Shareholders,

The encouraging half-year result once again confirms HIAG's operational strength and the solidity of its business model. Property income increased significantly and vacancy rates were further reduced. The development portfolio was characterised by successful project completions and the handover of numerous rental and owner-occupied flats to our tenants and buyers. The current economic conditions with falling interest rates are having a stabilising effect on financing costs and support ing property values. The optimisation of the Group structure will lead to considerable tax savings over the next two years.

Our team is at the heart of our success and we continuously invest in the development of our corporate culture. In addition to the strength of its personnel, HIAG also has an extremely solid financial foundation and is well-equipped to continue its successful and proven strategy and thus create added value for you as our investors, our clients and our employees.

Rising rental income and vacancy rates at record lows

Thanks to completed development projects and encouraging letting successes, property income improved significantly on the prior-year period. As a result, the vacancy rate also fell to a new record low. Among other things, the letting of vacant space on the "Papieri site" in Biberist (SO) is worth mentioning: A rental agreement for 3,200 m2 was signed with the padel court operator Padelta in January. A short time later, the "Papieri" leisure facilities were further expanded with the conclusion of a lease agreement for 1,200 m2 with "JumpFactory", which will operate a modern trampoline park with a variety of attractions on the site.

Successful completion of three development projects

In February of this year, the Minergie-Eco certified commercial building on the "Papieri" site in Biberist (SO) was completed on schedule and handed over to the tenant, the high-tech company "Librec", the operator of Switzerland's first recycling centre for high-performance batteries from the electromobility sector. During the same period, the "kessel haus" timber hybrid building on the Kunzareal site in Windisch (AG) was completed ahead of schedule and all apartments and commercial premises were occu- pied. The completion of the "kessel haus" project marks the successful conclusion of the development of the historic Kunzareal. The "CHAMA" promotion and rental project in Cham (ZG) was also completed in February and the tenants and buyers moved in on a staggered basis.

Marco Feusi, CEO

Dr. Felix Grisard, President of the Board of Directors

HIAG

Half-Year Report 2024

Introduction

Management Report

Financial Statements

General Property Details

10

The building permit for the second stage of around 140 rental and owner-occupied flats on the same site in Cham became legally binding in April. The construction started this August.

Construction of the 80-metre-high "ALTO" residential tower in Zurich-Altstetten, which began in August 2023, is also progressing according to plan. Occupancy is planned for spring 2026. Marketing of the 149 rental flats and the commercial space is scheduled to start in the first half of 2025. Construction of the "FAHRWERK" commercial building in Winterthur (ZH) is slightly behind schedule due to adverse weather conditions, and completion is expected for April 2025. Marketing of the 10,500 m2 commercial space is in full swing.

Following the discovery of additional contamination during the preparatory work for the planned construction projects on "Cam- pus Reichhold" in Hausen/Lupfig (AG), the start of construction on the site planned for the second half of 2024 is likely to be delayed by several months. The identified contamination mainly concerns per- and polyfluorinated alkyl substances (PFAS), which occur in various forms and in a range of products and applications.

Alongside the implementation of current projects, the medium- to long-term project pipeline is also constantly being fleshed out. This includes, for example, the consultation process for the neighbourhood plan for the "Gleis Süd" site in Pratteln (BL), which has met with a positive response so far and is due to be completed by the end of the current year. Further examples include the sites in Wetzikon Schönau (ZH), where the neighbourhood plan became legally binding in the spring and specific construction projects are now being developed. The residential construction project for "Walzmühlehaus" in Frauenfeld (TG) has been optimised and legally approved.

As expected, the good progress made with property developments generated further added value, despite higher expected investments on "Campus Reichhold".

Expected transactions in the second half of the year

The transaction market has already picked up noticeably against the backdrop of positive interest rate developments. As already communicated, individual property sales are expected in the second half of the year, which should also make a positive contribution to earnings.

Balance sheet and financing structure remain solid

HIAG's balance sheet is on a very solid foundation, and the committed syndicated credit line established in August 2023 provides great financial flexibility and security for the scheduled realisation of the promising project pipeline in the coming years. The cash inflows from the sale of the condominium units in the "CHAMA" project can also continue to be invested in the project pipeline, which supports the solid balance sheet structure and low borrowing ra- tio.

Progress in the implementation of the sustainability strategy HIAG also consistently pursued the goals of its sustainability strategy during the reporting period. In mid-April,a 4,500 m² photovoltaic system was installed at the Papieri site. This is located on the completed new "Librec" building and was provided by HIAG Solar. The new system not only makes it possible to supply "Librec" with solar power, but it also feeds surplus energy directly into the "Pa- pieri" site grid. With the commissioning of another HIAG Solar system in Kleindöttingen, the announced expansion target of 6 MWp capacity by 2024 was significantly exceeded. With an output of 1,170 kWp, this system is the largest in HIAG Solar's portfolio.

Efficient organisation forms the basis for success

HIAG continues to invest substantially in the development of its culture and promotes adherence to its corporate values. The successful realisation of HIAG's attractive project pipeline requires a professional and efficient organisation in which all teams and employees work closely together and consistently pursue the com- pany's goals.

Positive future based on the proven business model

Our strategy with the three business segments is proving its worth in challenging times and allows us to look to the future with confi- dence, even in an environment that is still dominated by some un- certainty. Another reduction in key interest rates by the Swiss National Bank (SNB) should further ease financing costs and also have a positive impact on property values and the transaction mar- ket. The acute housing shortage in some regions of Switzerland is likely to worsen because of the continuing high level of immigra- tion, so that good demand can be expected for HIAG's current residential construction projects in Zurich, Cham and Wetzikon. Given the resilience of the Swiss economy, HIAG expects rental demand for commercial space to continue even in the current volatile envi- ronment, whereby locations with good transport links are likely to benefit.

Against this backdrop, HIAG expects a good business year overall in 2024, which also supports a continuation of the current dividend policy.

Dr. Felix Grisard	Marco Feusi
President of the Board of Directors	CEO