Ladies and gentlemen, good morning and welcome to this full year results 2022 presentation. I have today with me René Häsler, our CFO, and Laurence Bienz, our investor relation. Today, the agenda will be as follow. I will start with the highlights and then with the market trends. Our CFO will present you the financial overview, and I will conclude with the outlook before the Q&A session. 2022 has been a very active year for Investis. We had to adapt our strategy to the new of the economy and the properties segment, we had to review our portfolio growth targets due to the continued inflation in the economy and especially on the salaries. We decide in Q3 2021 to review our strategy is that if inflation would continue, this would have an impact on rates and consequently on the value of our properties.
We decide to take advantage of, at that time, a strong real estate market to sell some of our properties for slightly less than CHF 380 million. These measures allowed us to have a profit of CHF 63.4 million on this sale to lower our LTV to 21%, and also avoid a capital increase at the wrong time. Also, we have now the opportunity to benefit from the actual market. We have also restructured our real estate service over the past year to bring it under one entity with the leadership of Michael Stucki. These measure have enabled us to, first, improve the profitability with an excellent EBIT margin of 10.6%, to boost our business through cross-selling measures, and also to simplify our organization and to continue our digitalization.
Our executive board, also Sophie Vartzbed, Head Properties, join us and also Michael Stucki, Head Real Estate Services. Mr. Walter Eberle left the group at the beginning of this year, and we thank him warmly of his contribution to the rest of our service segment. We were also able to continue to refine our ESG strategy, and here too, we appointed a person to be responsible for its execution for the entire group. As recently announced, that we also have Mrs. Corine Blesi joining Board of Directors. Highlights. 2022 was again an excellent year with an excellent profitability and a continued cash flow generation. On group level, we could increase again our NAV per share before deferred tax to CHF 95 or +7.1%.
We also improve our net profit, excluding revaluation effect at CHF 94 million compared to CHF 41 million last year. In the property segment, as we had a very successful sale of 11 investment properties with this gain of CHF 63 million. We had again a like-for-like rental growth for the residential properties from 1.8%, and we could again reduce our vacancy rate to 1.3%. Regarding the real estate service segment, we did the acquisition of Home Service and Aatest, and we could again improve our EBIT margin to an excellent 10.6%. Market trends. As you know, we follow this to adapt our strategy. The first one is migration, then construction activity, the regulation, and the capital market.
Regarding the migration and the demography, for Switzerland in 2022, we had again a very strong immigration with more than +80,000 new inhabitants in the country. For Geneva, the net immigration went up 1.1% to a little bit less than 6,000 people. Going forward, we expect that the immigration would remain high. In 2022, the construction activity is on decline. As you know, also in Geneva, this is a canton with much more with a high proportion of letting 85% compared to ownership. Also there now we've seen a strong decline of demand of construction permit. After record years of construction, we see now a decline of this activity.
Regarding the regulation, there is still this very attractive tax regime in the Lake Geneva, also boost the population in this area. Maybe for this year, the most important metrics, the capital market. 2022 has seen a rise of the interest rates and the evolution of those interest rate will on first the development of inflation. Secondly, on the stability of the financial market. We've seen this last day what happened with this bank crisis and of course, if a recession is coming or not. This evolution will have an impact on the real estate market. What happened in 2022 in the real estate transaction market? Q1, Q2 were still very strong.
End of Q2, rise of the interest rates, we had successive interest rates for 2022 and of course, the demand for real estate investment decreased. Actually, in the market, we don't see a big fall of the prices or crash, but we see more a consolidation of the market. Of course, the market is now much less liquid than one year ago, and we get now more opportunity than before. On Investis side, as I said, we decided to reduce our LTV to take the opportunity to continue to invest now in better condition as the past year in new properties. We expect also that interest rate could rise to maximum 2% from SNB.
Due to the weakness of the European economy, we expect that the Swiss interest rate should decrease again and the demand for real estate will increase again. Now if we look into some slides regarding the real estate market in Geneva, we can see that in all segment size, the vacancy rate is coming down. For the larger apartment, it's less than 0.4%, and for the smaller apartment is a little bit up of 0.40%. Globally, has 0.37% vacancy rate. Also you have to imagine that at the end of 2020 to 2022, Geneva had only roughly 600 units available for a population of more than half million people. Demand is still very strong in all segment size and the vacancy rate is good.
We expect that will come at record low. On the next slide, this is just to compare the Swiss market to the Geneva market. Spread is more or less the same. What we can note also is that in both markets, the vacancy rate is coming down. We have a slide with the construction activity. The first thing is that housing project is slowing down. If we look over the last more than past 10 years, we've seen that since 2010 to 2016, we had a stable production of units of more or less 4,000. Since 2016, it went up strongly to end of 2020 to 9,000 units.
Since the middle of 2021, we can see a strong decrease of this construction activity. This is due, of course, to the regulation and construction costs due to inflation. We expect a continuing reduction also due to the rise of interest rates. On the next slide, you can see that when you have a change of tenant in Geneva last year, the rents went up 7%. For our portfolio, we had a fluctuation of 11%, and this brings that for 2022 for our residential part, the like-for-like rental went up 1.8%. Investment volume. As I said before, we've seen Q3, Q4 2022 a strong decline in investment due to the rise of interest rates. 2021 was a record year with CHF 4.4 billion.
2022, it came down to CHF 3 billion, so -23%. For 2023, we expect again a strong decline, due to the interest rise. For Investis, we see there an opportunity to invest at better yield. Now regarding the spread between the 10 years Swiss bonds and the residential prime yield. We see a contraction since end of 2021. This was due mainly negative interest rate environment and a huge appetite for institutional to have a positive yield. We expect going forward a slow normalization of this spread. As I said before, the demand for apartment remained very strong. The construction is declining. We will face a shortage of apartments. On the graph of Wüest Partner, they expect for 2026 a shortage of 50,000, and mainly in the red area.
We are invested in two of these power, two of these red area, Lausanne and Geneva. Of course, the rents in this location will continue to rise. Despite the rise, the fundamentals on the residential market have never been so good as now. Conclusion, the yield decompression has started in the 2nd half of the year of 2022 as a result of rising interest rate of capital invested into real estate. The residential vacancy rate are among the lowest in the country. Obtaining building permit is getting more difficult. The construction costs are rising, and this will translate into a lower new construction activity. The demographic growth remain very solid. This favorable market dynamics brings further rental growth.
The conclusion, we will have a price adjustment due to the rise of the state, but it will be partly offset by the strong market fundamentals. We own this property, Rue du Nant 30, and we show the evolution of the rent since the IPO, since last year, the rents went up from CHF 756 - CHF 784 or +3.7%. In the meantime, the value went up 10%. You can see that since 2015, of the property has more than doubled. As I just said, this continuing rent increase will offset part of the price adjustment that we will for sure see this year. Investis market is unique. We have a low vacancy rate. We focus on middle segment of the market.
We are invested in the region where is the highest demand with a higher rental growth. Fundamentals remain very strong. I hand over to René for the financial module.
Thank you, Stéphane. Good morning, ladies and gentlemen. Let me just explain some insights into our numbers. This first page we can skip. You have the highlights for the group, the property segment and the real estate services. Stefan touched on that. You see our top line growth 5.3% to CHF 228 million. Very important is the line in the middle, this income from disposal of CHF 64 million, which is a gain on sale, which was materialized 20% over the previous book value, i.e., the previous valuation of our appraiser, CBRE. On the right, you see the fundamentals of our two segments. In blue, the property segment, in brownish, the real estate services.
Real estate services boosts 75% of our revenues, 25% portfolio of the rental income. Invested capital, very important number, 4% is allocated to the real estate service business and 96% the bricks and walls. If you look at the EBIT contribution, there I expect the property say gains and the revaluation gains, which contribute to 70%. If you look at the rest, you see that the 1/3 is coming from the service business and 2/3 is coming from the operation in the property segment. If you look at the cash flow generation, real estate services is even more strongly contributing 37% to the group's cash flow. Real estate services is marking its territory in our group.
Nevertheless, the high cash flow generation remains from the property segment. This property segment, CHF 58 million in revenue, down 3.7%. This is not a surprise since we announced in May the sale of 10 properties. We then added one more end of November. This explains the decrease in the top line. These sold properties contributed still CHF 6 million in revenue in 2022, so we will have to compensate somehow this revenue loss going forward. The like-for-like rental growth 1% for the whole portfolio. Here I would like to could increase its rents to 1.8%, while commercial was negative by 8%. That gave them total number of +1%.
In the two months of 2023, we see as development, rental growth is up 1% with residential contributing again strongly and commercially still slightly before below last year. The vacancy rate 1.3%. We will go into the details on the next slide, which is in total 1.3%. On this overview, you have the highlights of our portfolio. We are residential, we are Geneva, and we are in the middle covering the one, two, and three room apartments. This portfolio sees a very low vacancy rate of 1.3%. Geneva slightly up compared to the previous figures because we have a couple of things in renovation.
As you know, we always use one or two rooms, to, especially in the wintertime, to accommodate the tenants. Of course, we do the renovation while the tenants still occupy their apartments. Canton of Vaud, 0.4%. I don't think that this can be improved. I would rather expect this to be going back to the 1% vacancy level that we have in our portfolio any point in time. As you know, characteristic of our portfolio is residential, and our tenant contract, 74% of them are CPI-linked, so only 26% is linked to the ref- which we probably will see an increase this year. We saw already an increase in our CPI rates last year. That is why we had an increase in the rents, 1.8% in residential.
This will continue since the inflation is not going down. To the contrary, it's slightly increasing month-on-month. I can confirm the target like-for-like rental growth will also in 2023 be residential, probably rather at the higher end of this range. If we turn then to the real estate service business, as I said, more important profit contributor year-on-year. The year 2022, we could, I would say, boost the EBIT margin to 10.6%. You saw a 9.7% in the half-year, the 2nd half we could achieve 11% margin, which is outstanding. We had very good businesses in all our brands, which contributed to that excellent result.
EBIT margin 10.6% on CHF 174 million turnover. Last line on the bullets, EBITDA contribution, our KPI number for the group, and this segment contributes 40% to this key number. A little bit of history. You see the turnover after the sale of Freches-Villeroy in 2019. A very solid, almost doubling. No, even more than doubling the EBIT margin between 2018 to now 2022, this 10.6%. As I said, the very good results to this outstanding performance.
If we go back to the group level and look into the lines below EBIT, we see that our financial result, due to the environment in the first, I would say, nine months of the year and the proceeds that we could cash in during the year on the sales, our financial expense reduced to CHF 2.8 million, which was an average interest rate even below the years before. Tax normalized on 15% as expected, which results then in an excellent profit of CHF 152 million . Two words on the very strong balance sheet that you have on the next page.
As usual, we highlight only the important lines of the balance sheet, and that is the portfolio on the one hand, and the low financial liabilities, the deferred taxes of still CHF 143 million, a considerable number in our portfolio. A very strong equity of CHF 1.1 billion or 67%. Gross LTV stood percent at year-end, and it is the case as we speak. On the next page, you have a short introduction to our maturity profile. We are stably financed. As you know, we did not have to pay all the taxes on the portfolio sales gains. In the annual report, you will find that we still have CHF 22 million taxes to pay in 2023 on the sales of the last year.
We'll increase our financial liability a little bit in the 1st quarter to roughly CHF 90 million. The average interest rate cost as we speak after the announcement this morning of the Swiss National Bank versus the year-end figure that we published in the annual report. It was 0.39%. If you look, did look up the number. That's from my side. Thank you very much. I hand over.
Thank you, René. Outlook. I will start with the ESG. We were able for the third consecutive year to analyze and monitor our energy consumption. Yeah. We will focus on energetic renovation to improve our CO2 footprint on our portfolio. Since 2022 Investis is participating in the SRI index. It's very important to note that over 90% of our portfolio is residential and mostly in central location. We are in talk with the electricity heating supplier of Geneva and Lausanne because the more efficient solution will be the distance heating to improve the CO2 footprint.
We have a little bit less than 2% of our portfolio is rented to the Hospice Général, and also improving the comfort of the tenants through interior renovation, mainly bathroom and kitchen. Outlook. We think that strong balance sheet now is capital in this real estate industry. Dividend two. Investis shows that we're able to deliver even in this actual turbulence, both. We are very well positioned to capture opportunities in the market. As I said before, the fundamentals in the residential market are excellent. Regarding the service, we will now focus on organic growth as the margin is already excellent. Why to invest in Investis? I think what we explained just now, first the quality of the portfolio. We have the largest listed residential property owner.
We have a very solid balance sheet. The dividend is earned with the operating cash flow. Thank you for your attention. We are now ready for the Q&A session.
We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only headsets and eventually turn off the volume from the webcast. Webcast viewers may submit their questions or comments in writing via the relative field. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Pascal Furer from Vontobel. Please go ahead.
Good morning. The first few questions are around your like-for-like rental income growth. Here if I take the 1%, then the like-for-like growth in the 2nd half was flat. If I take the 1.8% residential, even then we saw sort of slowdown. If you can just briefly comment on this. You have already mentioned that you have a high share of rental contracts linked to inflation. How does this process sort of exactly work? How confident are you that you can enforce it everywhere with your tenants? If you have already initiated it, did you get any pushback? The second question with this regard is, I mean, we saw the 2.8% inflation in Switzerland last year. Is this not really the benchmark for your residential portfolio for 2023? Thank you.
Like- for- like, I just explained what we see in the first months. I mean, this explains also the other questions that you have raised. I mean, at the end of December, I've adjusted 900 rental contracts according to the new CPI index that was valid at the end of the year. No, we didn't have any pushbacks on this rent increases because it's contractual and the tenants are well aware of this contractual situation. 2.8%. Yes, if we could increase in all all rent contracts, of course it would be 2.8%. Also have, sometimes we don't go to the maximum because rents are already on a high level, that will...
Not equal to the full inflation adjustment on the portfolio. As you know, only 74% of our rental agreement are CPI linked. The rest we have to wait for the interest, the reference interest rate to be adjusted.
With regards to the slowdown in the 2nd half of the year, you had 2.5% in H1?
On the like-for-like?
Yeah.
I have to look that up, and I come back to that.
Okay. Thank you. Maybe just, the last question. On your balance sheet, which is now very strong following your property sale, can you please give us sort of an indication where you feel comfortable and on which levels and whether you need to take more actions or are you also prepared to some M&A transaction to take advantage of market opportunities? Is it maybe a chance that you will even get access to full portfolio in the region?
As I explained, you know, 2021, we've seen that the interest rate will goes up. Of course, this is a very simple when it goes up, the value comes down. Now, we have to identify exactly what would be the level and till where the market will go before to invest. We are in the market now, and as I said earlier, is much more liquid, and you have much less buyer. We try now. We send offer at much higher yield than the market because we think that maybe we could capture one or two of these opportunity for some seller who has to sell. We are very opportunistic and of course, if we can buy, we will buy.
Now, as we always explain, we are comfortable when we are under 40%, but also we have to identify clearly what will happen this year and next year with the interest rate, if we will have a recession or not. All these points are not very clear. What we can see is that after successive interest increase in many country, we see that the inflation is remaining very strong. I think actually, you have to manage more your balance sheet than your P&L in certain industry. You've seen in some bank, they have huge trouble now and real estate is also an industry where the balance sheet is more important as the P&L in when you-
Maybe I take up the open question on the like-for-like. Yes, it's correct. We have 2.5% in the first six months. This is first s months against the first six months in 2021. The split within this count 2.5% were 2.4% were residential and 3.9% were commercial, both on positive territory. As I said, in the full year, we were negative in the commercial with -8%. That is due to one property that was literally closed in the last quarter. You might have heard it in the press. It is our signature investment, Alaïa Bay, that had to be closed in Q4.
Okay, thank you very much.
The next question comes from the line of Holger Frisch from Zürcher Kantonalbank. Please go ahead.
Yes, good morning. I have a couple of questions. First would be on the debt maturities of CHF 200 million for this year. Could you share your thoughts regarding the refinancing strategy with respect to instruments duration and also interest rate level that you expect? Could you maybe also elaborate a bit on the drivers of the reduction in the vacancy rate, what percent is attributable to the sale of the properties, and what is attributable to letting success? Maybe also you can share some light on the closure of the Alaïa property. I was not aware of that. What was the reason for the closing of the property in Q4? The last one would be on ESG.
Do you see a need for an increase in CapEx in order to meet the federal CO2 reduction targets? Will you publish your own CO2 reduction path and when can we expect something there? Thanks.
Maybe I start with the debt, which is a rather easy one. I mean, the bond of CHF 140 million in October, I would say it's a little bit early to think deeply about refinancing this CHF 140 million. As you know, we have CHF 375 million bank credit lines that are readily available, which were only used CHF 64 million at year-end. We have enough headroom there. I would rather postpone the final answer to the half year presentation when we have more light on, A, the market and, B, on our financial or the refinancing strategy in that respect. The other ones, you talked about CHF 200 million for the CHF 60 million are bank loans that we roll over on a monthly basis.
On the vacancy, that is a rather easy answer. It's a result of our excellent asset management team that could let the vacant apartments rather easily. ESG, yes, we have a plan to reduce dramatically our CO2 footprint. 2050 is a little bit far away, I can confirm that our current renovation strategy or budget on a year-on-year basis will cover these additional renovation needs in our portfolio. No big change to see in the, let's say, the next 10 years in that respect.
I'll make the last question regarding Alaïa. We had, with the pool, we had regarding the isolation of the pool, a technical issue, with the company who did, the general, contract. Unfortunately, we had to close the pool two times in May and June, we did small repair fast, but we lost, almost 50 days during these two closing. We had to close now during the more than four months, to do a proper repair. We hope that, the general did a good job, we opened it was, 10 days ago. Of course, we claimed the case, with the insurance, et cetera.
Of course, there was much less income for this property than last year because part of the income is a percentage of the turnover.
Okay. Great. Thank you.
The next question comes from the line of Philippe Züger from ZKB. Please go ahead.
Yes. Good morning at all. I do have three questions. The first of them are bearing the canton of Geneva on board, do you see potential for expanding the property portfolio and to which yields? The second one goes to It's regarding the service business. The EBIT margin stands at 10.6%. Are you able to maintain the margin in the future? The last one, I didn't get the point. How much is the share of the rents with reference to that at 1.25% in the portfolio?
Maybe René can answer maybe to the last question.
Yeah. 26%, as 74% are linked to CPI.
I will jump into the first question regarding the potential. Of course, as I mentioned before, the market became much more liquid since end of February. As you know, actually, when you have the interest rates coming, going up, for all the funds and aggressive tone, different institutional investors, I think they had to rebalance part of the portfolio, the global portfolio, because the loans market went down, so they have too high a share of real estate. Since end of last year, many investors had to put for sale some properties. Since end of February, we are receiving much more opportunity than before. Yield depend of the quality of the property, commercial, residential.
We are focusing more on residential. Of course, then you have the thematic of ESG. You have maybe some institutional owner, they are not able or not ready, or they don't want to refurbish, so they prefer to sell. Now what will be the yield? We try to be very opportunistic. We made offers with between 5%- 6%. And let's see if we can get some opportunities. For one property in Geneva, we are actually in talk at that level. The second question regarding the EBIT margin. René, maybe.
Yes. Thank you, Stéphane. Yes, we had 10.6%. We were positively surprised ourselves. We did not plan for this and we plan rather to consolidate the segment. I would not be surprised to a little bit underachieve this number this year. You can still expect a very, very, very high single digit on this line for 2023.
Thank you.
There are no further questions.
Oh, thank you, ladies and gentlemen, for your attention.