Zug Estates Holding AG

EQS-Adhoc: Zug Estates Holding AG: Marked increase in net income for Zug Estates

EQS Group-Ad-hoc: Zug Estates Holding AG / Key word(s): Half Year
Results
Zug Estates Holding AG: Marked increase in net income for Zug Estates

28.08.2015 / 06:55
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

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In the first six months of 2015, Zug Estates Group increased its property
income by 4.3% compared with the first half of 2014 to CHF 19.1 million. At
CHF 39.4 million, net income thus practically doubled.

In the first half of 2015, Zug Estates posted an operating income before
depreciation and revaluation of CHF 18.6 million. This represents a
year-on-year increase of 0.7%. At the same time, property income rose 4.3%
to CHF 19.1 million. Sales in the hotel & catering business unit rose
slightly compared with the previous year. The Group's operating expenses
for the first half of the year were up 6.2% year-on-year, mainly due to
higher maintenance expenditure and expenses associated with real estate
transactions.

In the first half of 2015, the Group invested CHF 22.2 million in the
further development of its sites. In addition, the book value of the
investment properties increased by CHF 32.8 million net as a result of the
revaluation. Consequently, income from the revaluation of investment
properties (net) tripled compared to the previous year's figure of CHF 10.5
million. The main contributing factors here were the above-average quality
of the locations and properties in the portfolio (high proportion of
residential property), the continuous development and positioning of the
Suurstoffi site as a preferred location for housing and business, and
market-related factors.

As a result of the revaluation, EBIT and net income were well above the
previous year's figures at CHF 49.5 million and CHF 39.4 million
respectively. Net income excluding revaluation decreased by CHF 0.4 million
to CHF 11.5 million (previous year: CHF 11.9 million) owing to the sale of
a property and higher borrowing expenses. Without property transactions,
net income excluding income from revaluation would have been slightly above
the previous year's figure.

Far-reaching decisions on the future direction of the Group

In the first half of 2015, important decisions were taken on the further
development of the Suurstoffi and Zug city center sites:

  - Zug Estates succeeded in further focusing its portfolio and on March 1,
    2015 sold the industrial site in Oberentfelden (AG) at market value. On
    July 1, 2015, Zug Estates was able to acquire the last plot on the
    Suurstoffi site ownend by third parties. In return, the Suurstoffi 3a-c
    will be sold.

  - On the Suurstoffi site, a third development phase was launched,
    comprising 170 rental apartments, student housing and cluster
    apartments, plus approx. 7'000 m² of commercial space. The planning
    application was submitted in April, construction is due to start in
    autumn 2015, and occupancy is scheduled for the second half of 2017.
    The investment volume amounts to approximately CHF 110 million. A
    long-term lease has already been signed for more than half of the
    commercial space. In 2017 the market research company GfK will relocate
    to the Suurstoffi site with about 200 staff, further strengthening the
    business location.

  - Lucerne University of Applied Sciences and Arts (HSLU) will establish a
    major new campus at the Suurstoffi site. The development of the HSLU
    Suurstoffi Rotkreuz campus will proceed in two stages. The newly
    created School of Information Technology will start operating in
    existing premises on the site in the autumn of 2016. In a second stage,
    parts of the finance division of the School of Business, together with
    the School of Information Technology, will move into a new building
    directly adjacent to the railway station. The new premises will provide
    space for about 1'350 students and 200 employees. In addition, 100
    residential units for students will be created on the site. This will
    allow Zug Estates to proceed with the integrated planning of the
    western section of the Suurstoffi plot on which the final site of the
    Lucerne University of Applied Sciences and Arts is to be constructed by
    2019, and make a start on the necessary adaptation of the development
    plan in cooperation with the local municipality.

  - In addition, the decision was taken to construct a 70-meter high-rise
    apartment building in the center of the Suurstoffi site. The high-rise
    project includes plans for some 90 apartments and about 2'500 m² of
    office and commercial space on a condominium ownership basis. The study
    process has been completed and the planning application is due to be
    submitted in spring 2016. Construction is due to start in autumn 2016,
    with occupancy scheduled for winter 2018/19.

  - On the Zug City Center site, the decision taken on the Zug city tunnel
    in a local referendum held on June 14, 2015 clarified the position on
    an important precondition for the future development of the site.

Success in renting properties in line with the high degree of development
momentum

The second development phase of the Suurstoffi site, consisting of nine
apartment buildings comprising 145 rented apartments and 11 owner-occupied
apartments, was completed on schedule and handed over to the occupants. All
apartments have been let, increasing the proportion of residential property
within the portfolio to about 30%.

The portfolio's 6.4% vacancy rate as of June 30, 2015 (reference date)
includes approximately      4'000 m² of commercial space earmarked for
Lucerne University of Applied Sciences and Arts and leased from summer
2016. A further 2'000 m² of office space that was vacant on the balance
sheet date has since been leased. For the remaining commercial space,
negotiations with prospective tenants are at an advanced stage. During the
course of 2016, we therefore expect to be able to report largely full
occupancy for the main commercial premises.

Confident outlook for the second half of 2015

In operating terms, we expect rental income in the real estate business
unit to rise overall. However, the disposal of two properties and the
lowering of the reference rate for apartment rents as of     October 1,
2015 will reduce annual rental income by about CHF 1.9 million. The vacancy
rate is expected to decline by the end of 2015. The carefully planned
development of the Suurstoffi site will remain an important priority. In
2015, we expect overall investment in the real estate portfolio to total
about CHF 50 million. In the hotel & catering segment, our assessment of
the earnings outlook remains unchanged.

For the year as a whole, we expect a slight increase in operating income
before depreciation and revaluation. The surplus from the revaluation of
investment properties (net) will increase net profit.

End of ad hoc announcement

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Additional features:

Document: http://n.equitystory.com/c/fncls.ssp?u=CJCFYBOCHH
Document title: Marked increase in net income for Zug Estates

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28.08.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

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Information and Explaination of the Issuer to this News:

The detailed report on the half-year can be found on our website
www.zugestates.ch under Investor Relations/Reports.

We will be holding a webcast in German at 10:30, which can be viewed on our
website www.zugestates.ch.

Upcoming Events:

March 11, 2016  Publication of the annual report 2015
April 12, 2016  Annual general meeting of shareholders
August 26, 2016 Publication of the half-year report 2016

About Zug Estates:

The Zug Estates Group conceives, develops, markets and manages properties
in the Zug region. It focuses on centrally located sites suitable for a
wide range of uses and with potential for sustainable development. A large
part of the real estate portfolio is located at two sites in Zug and Risch
Rotkreuz and is broadly diversified by type of use. The Group also runs a
city resort in Zug incorporating the two leading business hotels Parkhotel
Zug and City Garden, augmented by a range of restaurant outlets. As at June
30, 2015, the total portfolio value was CHF 1'142 million.

Zug Estates Holding AG is listed on the SIX Swiss Exchange, Zurich, (ticker
symbol: ZUGN; securities number: 14 805 212).


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Language:    English
Company:     Zug Estates Holding AG
             Industriestrasse 12
             6300 Zug
             Switzerland
Phone:       +41 41 729 10 10
E-mail:   ir@zugestates.ch
Internet: www.zugestates.ch
ISIN:        CH0148052126, CH0148052118
Valor:       A1J0M6
Listed:      Regulated Unofficial Market in Stuttgart; Open Market in
             Frankfurt ; SIX


End of News    EQS Group News-Service
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389133 28.08.2015
 



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