HIAG Immobilien Holding AG
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HIAG's robust business modelHIAG's business model has demonstrated resilience in the face of increasingly challenging conditions on the market in recent months. All three business lines made a positive contribution to earnings in the first half of 2022. There was another significant reduction in the vacancy rate. All major projects are proceeding according to plan. Further tailored transactions were concluded or initiated as part of the ongoing optimisation of the portfolio. HIAG was able to pass on most of the significant increase in construction costs during the reporting period to its suppliers. The inflation clauses in the commercial leases also made it possible to adjust the net rents in line with the national consumer price index. HIAG has also optimised the volume and staging of the project pipeline in order to give itself greater entrepreneurial flexibility. Furthermore, the basic financing was consolidated in the reporting period with the successful placement of a bond for CHF 150 million, which matures in October 2026. A detailed assessment of HIAG's financial performance in the first half of 2022 can be found in the CFO's report.
Significant progress on site developmentIn the first half of 2022, HIAG successfully continued to realise projects in its well-filled development pipeline with 61 projects and an investment potential of slightly over CHF 3 billion, with numerous planning applications and further progress on projects. By intensifying project development activities and enhancing management and investment services over the past two years, relevant project milestones were reached and significant valuation gains were achieved as a result. Further project progress and corresponding investments should enable the realisation of additional profits. Moreover, the completion of various larger projects in the years ahead will lead to an increase in income thanks to higher rental income as well as possible sales proceeds from promotional projects.
In Cham (ZG), construction started on the first phase of the large-scale "CHAMA" project with around 140 rental and owner-occupied flats as well as flexible office, service and commercial space. The first tranche of 52 condominiums has been on the market since April. The rental flats will be put on the market in winter 2022/23. A lease has already been signed with a serviced flat operator for a large part of the 3,500 m2 of commercial space. The first stage is expected to be completed by the end of 2023. Preparations for the second construction phase are also proceeding according to plan. This includes another 140 flats and almost 1,500 m2 of office and commercial space.
After HIAG paved the way for the sustainable development of the central area near the railway station in Niederhasli (ZH) by handing over the new office building to Doka Switzerland, the "In Farn" project was launched together with the municipal authorities and SBB Immobilien. This consists of around 190 rental and owner-occupied flats, around 1,000 m2of high-quality commercial space in a central location, and extensive green and meeting areas.
The demolition of the HIAG site in Pratteln (BL) was completed. Work started on the process of drawing up the neighbourhood plan, which is to be submitted by the end of 2022. The plan is to create a mixed-use central quarter near Pratteln railway station with up to 350 flats, commercial and office space for around 500 workplaces, as well as publicly accessible green and open spaces.
At the end of June, a planning application was submitted in Zurich-Altstetten (ZH) for an 80-metre-high block of flats with a commercial base on the HIAG site in the up-and-coming Altstetten district. The plans envisage 150 rental flats and mixed commercial space with a major retailer on the ground floor.
At the "Papieri" site in Biberist (SO), progress is being made on the transformation of the industrial site into a lively quarter with commercial and industrial tenants, housing and a diverse range of artistic and cultural activities. One milestone is the establishment of the start-up "Librec", which will operate the first Swiss high-tech recycling centre for high-performance electric vehicle batteries on the "Papieri” site.
After a long period of planning and preparation, the plan for the "Campus Reichhold" in Hausen/Lupfig (AG) was presented at a public event at the beginning of June. No objections were received during the public consultation period. The plan is expected to be approved by the two municipalities and the canton in the third quarter of 2022. On the site, which is conveniently located near the Birrfeld motorway interchange, HIAG is planning modern workplaces for manufacturing companies and commercial enterprises, an attractive range of restaurants and fitness facilities, a daycare centre for children, and recreational and green areas. Work has started on preparing the construction site. A preliminary building right agreement has already been concluded with the operator of a data centre.
In Windisch (AG), the "Kessel Haus" project with 24 rental flats and around 300 m2 of office and studio space represents the final piece of the puzzle for the "Kunzareal". The building permit has been granted and construction work is scheduled to begin in the third quarter of 2022. HIAG has also submitted a planning application in Winterthur (ZH) for an innovative commercial building that is accessible by vehicle with around 10,500 m2 of usable space. The building permit is expected to be granted in the third quarter of 2022. The company is also planning to build around 90 rental flats and around 1,100 m2 of commercial and storage space at the site in the "Les Cadolles" neighbourhood in Neuchâtel. The building permit is expected to be granted in the first half of 2023. There are plans to expand the high-bay warehouse at a logistics centre in Brunegg (AG), and a corresponding planning application has been submitted. A long-term, preliminary lease agreement for around 7,500 m2 of usable space was also concluded for part of the HIAG site in Ermatingen (TG) with the future operator of a residential and care centre for senior citizens, which is planned for the medium term. The planning application is scheduled for 2023.
Successful rental activityDemand for HIAG's commercial space remained high in the first half of 2022. New and follow-up leases were concluded at a good rent level at several locations. During the reporting period, the Swiss electrical components manufacturer LEM moved into the new building for its global headquarters in Meyrin (GE). In August, the well-known Austrian furniture retailer XXXLutz opened its second Swiss furniture store on 17,000 m2 of floor space in Dietikon (ZH), in the immediate vicinity of the motorway feeder road. This further enhances the retail site. In Aathal (ZH), the Migros Cooperative Zurich launched its fifth outlet on 700 m2, on the site of the former "Streiff" spinning mill. In the Klingnau (AG) business park, the occupancy rate was significantly improved after the well-known online wine retailer "Flaschenpost" moved in, taking over around 6,000 m2 of usable space. Transitional use was further expanded in the "Wydeneck" long-term project in Dornach (SO). The site has been opened to the public with the "Wydenfest" and a supervised playground. HIAG's residential properties are almost fully let at present.
Thanks to successful letting activities and the completion of fully let construction projects, the vacancy rate was significantly reduced across the entire real estate portfolio.
Portfolio optimisation transactionsA large number of dossiers were examined in the Transactions and Commercial Property Marketing business line during the reporting period. The purchase of three apartment buildings with 27 flats in Niederwil (AG) optimises the portfolio. Furthermore, a preliminary purchase agreement was concluded with a renowned Swiss company for the HIAG site in Meyrin Grand-Puits (GE). The long-standing company wants to relocate its production to the attractively located industrial site. The "Schönau" site in Wetzikon (ZH) was consolidated with a small plot of land. In Wetzikon, HIAG is planning a lively neighbourhood of 38,000 m2 with historic buildings and valuable natural space.
As part of the ongoing programme to divest non-strategic real estate, the buildings and agricultural land (not including the hydroelectric power plant) of the "Legler site" in Diesbach (GL) were sold during the reporting period.
In the future, HIAG intends to continue to regularly sell non-strategic properties as part of its "capital recycling strategy", and to optimise the portfolio by acquiring suitable properties including residential land that allows for the realisation and marketing of condominiums.
Change of leadership at HIAG RomandieAt the beginning of May, Patrick Japhet took over the management of HIAG Romandie from Yves Perrin, who had successfully built up and expanded HIAG's position in the French-speaking Swiss real estate market until his retirement. Patrick Japhet has around 20 years of experience in the real estate market, mainly in Western Switzerland, and holds a master's degree in material and structural mechanics from the “EPF School of Engineering” in Paris, which he complemented with an exchange study programme in civil engineering at the “Swiss Federal Institute of Technology” in Lausanne. He is also a graduate of the "Institut d'études Immobilières IEI” in Geneva. Yves Perrin will remain available to HIAG for selected projects in an advisory capacity.
Sustainability strategy maintained in a targeted mannerWhen it comes to the implementation of the sustainability strategy, the upgrade in the "Inrate ESG Rating" from a grade C to a grade B on the twelve-point scale from A+ to D- is noteworthy. This means that HIAG qualifies for inclusion in the "SPI ESG" sustainability index of SIX Swiss Exchange.
HIAG consistently pursues its sustainability goals and is on track with the first submission of data for the "GRESB Real Estate Assessments 2022". The development of a guideline for sustainable construction is also proceeding according to plan. The project for the creation of a path for the reduction of greenhouse gas emissions is already further along. The first models will be presented in the 2022 Annual Report. With the installation of six additional photovoltaic systems by the joint venture HIAG Solar, HIAG is also on track with its fourth sustainability goal. Systems with an output of over 3 MWp are currently in operation, and the aim is to achieve a total output of 6 MWp by 2024.
OutlookHIAG's robust business model, strong operating performance and solid financing structure provide a stable foundation for the group's continued growth. Provided macroeconomic conditions do not deteriorate significantly, HIAG continues to expect a good result for the 2022 financial year. An increase in rental income is expected for the second half of the year due to the completion of fully let construction projects, additional letting successes and inflation-related rent adjustments. The vacancy rate is foreseen to remain on a stable level. Progress on major development projects should also make further revaluation gains possible.
Dr. Felix GrisardPresident of the Board of Directors