Ladies and gentlemen, welcome to the Investis Holding 2024 Results Webcast. All participants of the webcast are in listen-only mode, and the webcast will be recorded. Please note that the recording by participants for publication or broadcast is not allowed. After the presentation, there will be a Q&A session where you can ask questions in written form and orally. Written questions can be submitted at any time via the dialogue on the left side of the Livestream tab. Additionally, you can ask your questions verbally via the tab "Audio Q&A." Details on that process will be explained at a later stage. With that, I will now hand over to Stéphane Bonvin, CEO of Investis.
Thank you. Ladies and gentlemen, good morning and welcome to the presentation of Investis Holding's full year 2024 results. I'm pleased to be here today with our CFO, René Häsler, who will present to you the financial overview, and Laurence Bienz, our investor relations. The agenda will be as follows. I will start with the highlights, and then I will continue with the market trends. René will present to you then the financial overview, and I will conclude with the outlook before the Q&A session. Before we go into the details of our results, I would like to take a step back and provide some context. Following the sale of part of our portfolio in early 2022, the market reacted exactly as we had anticipated.
This allowed us to start acquiring new properties again from the end of 2023 till now, and we are still in the process to acquire additional properties. Since then, we have bought an important number of properties, achieving a significantly higher return than what we sold. Today, we hold a property portfolio of CHF 2 billion, with rental income of CHF 84 million as of the end of January, and we maintain a very conservative LTV. Looking ahead, we plan to acquire approximately CHF 300 million more additional properties. Regarding the market, it has evolved exactly as we foresaw. During 2023, there was a necessary adjustment period as market participants adapted to the new pricing reality. However, in 2024, we have been able to complete transactions, and since late last year, we have observed a market turnaround driven by successive interest rate cuts from the Swiss National Bank.
This has brought investors back into the market, as evidenced by the numerous capital increases from funds and investment foundations. Naturally, this will lead to a wave of new acquisitions, putting pressure on the yields again. Today, we already see transactions in central Geneva closing at yield around 3.5% compared to the 4%-4.5% range that we saw last year or in end 2023. Of course, the markets remain very liquid, but the volume of available assets is starting to tighten again. Regarding the fundamentals of the residential real estate, the sector remains extremely strong. New construction has slowed while demographic growth continues. As a result, rental prices are rising steadily. As already mentioned during the half-year result presentation, we successfully sold our service business in 2024 at an excellent price.
This transaction significantly strengthened our equity base, providing us with the necessary capital to continue expanding our property portfolio. This sale was a key component of our strategic vision, allowing us to reallocate resources efficiently and focus on high-value real estate investments. As you can see, we have executed this strategy, reinforcing our ability to capitalize on market opportunities. As mentioned before, our portfolio now is evaluated at CHF 2 billion, with a rental income of CHF 84 million. This means that we have an average gross yield of 4.2%. Our debt remains very low, and we also hold significant financial assets, including stakes in PHM, NEO, and Taurus. These financial holdings should, in my view, offset the deferred tax liabilities on our balance sheet.
Currently, for me, Investis shares trade at a discount to NAV, and this contrasts sharply with the Swiss residential real estate investment landscape, where many funds are trading at a premium. Now let's move to the first slide, page four. Highlights, we have three main highlights, as I said. We had in 2024 the sale of the service. We had the expansion of our portfolio, and we also decided to increase our dividend to CHF 2.6. If we go more in details, we bought quite a lot of properties for more than CHF 370 million in 2024. The income from the disposal of the service was CHF 122 million. We had revaluation gain last year of CHF 105 million, the good quality of our portfolio. The net profit, excluding revaluation, went up to CHF 157 million. Our dividend is earned on a recurring basis, as the FFO was CHF 46 million.
The NAV per share, excluding deferred tax, went up to CHF 117, and we have still a very low LTV to 27.6%. Market trends. If you go on this page six, as you know, we always follow these four key metrics, and that allows us to define our group strategy. The first and most fundamental metric is demography. In 2024, the canton of Geneva and Vaud experienced another increase in population of 1.1%, translating to 5,800 additional residents in Geneva and 9,400 in Vaud. In the meantime, in 2024, just for the canton of Geneva, the net production of new housing units was only 2,082 units. The shortage is still there. If we look at the construction activity, it has declined. I will speak about that a little bit later on a slide. The number of building permits has also dropped.
Of course, this is going to continue the housing shortage. Regulation remains a key factor influencing the market. If regulatory constraints continue to increase, it will not address the core issue, which is not the regulation itself, but rather the lack of construction and the slow pace of the building process and accelerating and simplifying these processes. On a positive note, in 2019, which lowered the corporate tax in Geneva and Vaud, has significantly enhanced the attractiveness of these two cantons. This has resulted in an economic growth rate above the Swiss average and has been a key driver of population increase and strong housing demand. Now there, the challenge is again to respond to this high growth construction. Regarding the capital market, as anticipated, inflation in Switzerland has decreased, allowing the Swiss National Bank to reduce quite fast the interest rate.
We are now at 0.5%. Let's see what happens tomorrow. We expect again a decrease. Why? Because the low inflation and the strength of the Swiss franc, we are effectively importing deflation every day, which continues to put pressure on the currency. Additionally, the political polarization in our neighbor country has led to unstable government, where the governance is very difficult. This ongoing uncertainty, combined with what we call the mismanagement in Europe, should continue to put pressure on Swiss franc. As a result, we still expect that interest rates in Switzerland will turn negative again by 2026. Now let's go through some slides. If you go on to page seven, we see on these slides the population growth forecast from 2020 to 2050.
The demographic projection indicates a positive trend, mainly in the urban centers, such as Lausanne and Geneva, where we are invested, while more rural and peripheral areas may face stagnation or decline. We can expect that in these urban centers, these are the places where to invest, where you're going to create more value going forward. Next slide. The latest data confirms the ongoing tightening of the residential market in the Lake Geneva region. The vacancy rate has now fallen below 1% for Vaud, while Geneva remains at an extremely low level of 0.5%, despite the new construction ongoing in Geneva. We can add that almost all the cantons now are under this optimal vacancy rate. This means that the lack of construction is now also a national issue, not only for some city centers.
The next slide highlights a clear trend in the region with a significant housing shortage that tenants are staying for much longer periods. The positive point of this is that for landlords, this signals a strong and stable tenant base and reduces vacancy risk. If we look now at Geneva, of course, you can see it's really in red with a stay of more than 10 years. If we look now at our portfolio, we have a fluctuation of 11%. Regarding the next slide on page 10, that's about the construction activity. The data shows that in Geneva, we can see since 2010, a strong growth. It went up till Q1 2023 with 9,000 units under construction. This momentum has now slightly declined to 8,000 units. Despite this high activity, the market remains extremely tight, as I said just before, with a very low vacancy rate.
Also, do not forget, in Geneva, 60% of all these new units are controlled rents. As I said before, finally, the production is very slow, as the net production last year was only 2,082 units. On page 11, this is regarding the real estate market in Switzerland and especially the challenge for new construction. Despite, as I said, the recent, also we saw a recent increase in building permits, the construction activity in Switzerland may not be sufficient to cover housing needs. The following factors could continue to hold back housing construction going forward. The first one is shortage of land. Also, the building potential on the central side is steadily declining. We know that densification is the only option. There you have the problem of the objections.
One of the main problems is the not in my backyard effect, which delays a lot the project. Also, the politicians, they are a little bit afraid when the population is against the project. We have also the complex authorization procedures, which are even worse since COVID. We have also, of course, the high prices for land. Still, the market intervention and the new regulation, such as rent caps, which create uncertainty for the investors. Also, we saw part of the capital available for investment is now more focused on stock renovation, mainly to meet climate targets. Next slide, 12. If we look again at the Swiss real estate market, we can see that during the last increase in interest rate, the application of the taux de référence hypothécaire, this application was much stricter in the German-speaking part.
Also, you can see in 2010, the decrease too. In the Lake Geneva region, we had more slow but gradual increase. This is due mainly, in our case, for investors. This is due because we have our five-year lease contract, which is indexed on the CPI. Also, in Romandy, we do not have the NAV and cost and system in our contract. That means that for the landlord, it is more difficult to add the cost and to compensate the reduction of the interest with the higher cost on the property. The next slide, it shows the premium between the 10-year Swiss bond and the prime residential real estate yield in Geneva and Zurich. From 2023 to 2024, the 10-year bond yield rose to 1.2% before declining again to 0.4%.
We see that again, what we've seen is that during the year 2021, this premium became very tight and now is increasing again around 2.5%, as seen in the past. As I said before, this is already ongoing in the transaction market. On page 14, you can see always the same property we showed since years now. You see that again, we had an increase of our rent by 0.9% in 2024. To summarize, Investis' position in the real estate market in Switzerland is unique. We are active in markets where there is a constant situation of undersupply with low vacancy rate. We focus on middle segments of the market. That is where you have the highest demand. As I explained before, the fundamentals remain very strong. Thank you. Now I hand over to René for the financial overview.
Thank you, Stéphane. Good morning, ladies and gentlemen, also from my side.
Yeah, nice set of figures for the 2024 financials. I start on page 17. The summary you have heard already. I just would like to point out on the last thought of the first part, which says equity ratio at 64%. While total assets rose by 29% to CHF 2.1 billion, equity ratio still remained at 64%. It slightly increased even. In a nutshell, we generated in the last year CHF 310 million of equity for our shareholders. On the next page, you see the different lines of the income statement, somehow a mixed bag because we had our service business for almost half a year and the property segment that I will deep dive on the next slides. Difficult to judge these numbers compared to the last years that you see in the reference column.
Nonetheless, a very solid performance with a net profit of almost CHF 250 million, recovering from the loss of last year that I don't want to enter again, as you know the details. Net profit excluding revaluation, a very important figure for the real estate business, CHF 156 million compared to the CHF 35 million last year. Of course, the main item that drove these results is the sale of the service business, which generated a gain of CHF 122 million. If we go into the details of the previously two segments, just to remind you, the service business, I don't go into further details, but on page 32, you have the details that we already presented in the whole here. If you are missing certain information, there you find these details.
More important, our nice portfolio and the financials on this, you generated an increase of 21% on the back of rental increases that we could implement in our portfolio, as well as strong acquisitions. You heard it, we invested almost CHF 400 million if we include the two properties that we took over from the service part. That increase is explained by these acquisitions. Nevertheless, EBITDA, our key performance indicator, when we look at our numbers, increased even 27% to almost CHF 43 million. The EBIT, including the revaluation gains that I will explain in a moment, almost CHF 150 million. In 2024, we had a one-off turnover-based rental income of CHF 500,000. That is important to know as once it will not repeat in 2025. These CHF 500,000 relate rather to the year 2022 and 2023. It relates rather to the year 2022 and 2023.
It is 2023. That influenced importantly on our like-for-like rent side, understated in the last two years, and is probably overstated if you take just that number of 3.4% this year. In the graph to the right, we have illustrated as named alternative like-for-like. There you see that effectively 2022 would be 1.5% like-for-like, last year 3%, and 2024 rather than 2%. That we also see in our residential business where we had a like-for-like increase of 2%. Vacancy, a little higher, still below 2%, not a concern to us, but because we purchased these vacancies, this was a clear decision to purchase these properties. When we decided to acquire these properties, when we offered the purchase price, we did already consider these vacancies, so we did not pay for these vacancies at all. That is why the purchase prices were lower.
Average discount rate from four, an increase of three basis points, but we have to dig into the details, and that's why I show you the residential and commercial number. Residential decreased three basis points and commercial's even 59 basis points. The mix of the portfolio resulted that the discount rate increases rather than, as you would expect, decrease. It is a mixed effect and not an increase of the discount rate on the properties itself. Of course, that had a considerable impact on the revaluation gains that we see on the next pages. Gross rental income on the 1st of January 2025 amounted to CHF 78.4 million compared to the CHF 58 million a year ago. The portfolio more or less still the same, a little higher share of commercial. We doubled the ratio from 9% to 19%, still 81% residential.
Still our focus, we continue to grow in the residential business. We stick to our Lake Geneva region. You see 66% Geneva, 28% is Canton of Vaud. And apartments still the same. We are in the middle segment, one to three-room apartments. That is our core business. Now below, you have the split of these vacancies. Again, it's a purchased vacancy. It's not a shift in our portfolio that we suddenly lost tenants. I mean, the 2023 numbers that we presented a year ago, I pointed out that it's almost unrealistically low. It was probably the lowest that we could even ever achieve. And the 1% Geneva and 1.1% in the Canton of Vaud, that is still what we see as structural vacancy rate in the portfolio. Yes, now these famous revaluation gains, CHF 105 million, a strong number, which, as Stéphane pointed out, is a reflection of the quality of our portfolio.
If we deep dive these numbers a little bit, I can share with you that about a little bit more than one-third, CHF 37 million, is coming from these well-negotiated acquisitions. CBRE valued all these properties higher than we purchased. Overall, and on average, we have both on residential and commercial about 10% higher valuations at year-end compared to the purchase price that we invested during 2024. Of course, the discount rate decreases on the property-per-property view contributed another third to that revaluation gain. We had that one property that you might follow with us since years. It is Rue Navigation that formed a hotel in Lausanne, where we have now the permit to renovate and transform. That contributed as well strongly to the revaluation gains. Of course, the higher cash flows in the portfolio contributed, as usual, to the revaluation gains for investors.
That as a summary. If we look back, last year we had that dip of CHF 48 million of revaluation losses, but we overcompensated that number and are back on track going north with these accumulated revaluations in our portfolio. Rent potential, we still have 12% rent potential. Since the commercial part is, or we grew the commercial part to 19%, you can assume that on commercial tenants, we are more mark-to-market when we do the rental negotiations, and that catch-up effect in the residential business is much higher. In residential, effectively, we have a potential of 14%, which then with the lower commercial part gives a consolidated number of 12%. 14% was also the potential 2023, just to note.
Maybe for the last time today, I just would reflect on what we did since the IPO and since 2021, when we decided to sell 11 properties, excuse me, in 2022, and realized a cash inflow of CHF 377 million. If we look back, we started the journey in 2016 with a portfolio of roughly CHF 900 million and an LTV of 38%. The similar LTV we had at the end of 2021 resulted in CHF 650 million of debts. If we look today, we are a more developed company. We generated huge equity, and we have now a CHF 2 billion portfolio with only CHF 550 million of debt. In other words, since 2021, we decreased our debts by CHF 100 million but increased the portfolio by CHF 250 million. All the call that capital recycling, we do not like to use that term too much.
We simply do our homework and act in the market as a good citizen should do. Now, what shall I say on page 23 to our balance sheet? I mean, it's boring. We have our portfolio. We have 64% equity or CHF 1.34 billion. We have these some millions of debt. We have the current deferred tax liability, and that's it. A very sound and clear balance sheet. We look forward to grow that balance sheet as we did in the past. One last word on the debt profile. You see we have on all three sources, we fund our financial needs. We have the bond, the capital market that we are active again after a little period of silence since we were not happy with the offered income. We did a bond last year. We did another one in January with the majority mid-February.
We still have support from private placements. We use our banks to fund the short-term needs that we then recycle into longer-term financing on the bond market. We have an average maturity of five months as of the balance sheet date. As we speak today with the new bond, it is a 12-month period. This, of course, can grow on with the next transactions when we come again on the capital market. That is from my side. Thank you very much. I hand over to Stéphane.
Thank you, René. Outlook 2025. The main outlook is that we continue and we expect to grow our rental income similar to 2021 to 2024 by 21%. As I already mentioned, we bought already this year two additional properties with an income of CHF 2.7 million. We aim to buy CHF 300 million more additional properties for 2025.
Regarding the market, as said before, the strong demand in Lake Geneva region for apartments remain. Demography stays strong. The new construction stays low, keeping vacancy rates low. We are going to continue to have our politic with a strong balance sheet and a low debt. As I said, we expect further significant rental income growth in 2025. Thank you for your attention. Now we are ready for the Q&A session.
We will now start the Q&A session. In order to submit a written question, please submit your question via the dialogue on the left side of the live stream. We will then read them out loud and answer them. If you prefer to ask your question verbally, please click on the tab Audio Q&A and then enter the audio Q&A session.
If you are ready to ask your question, please raise your hand by clicking on the raise hand icon in the menu bar at the bottom of your screen. The moderator will then give you speaking privileges and ask you to unmute yourself. In case your organization has very strict security in place and you cannot join the audio Q&A, you might consider asking your questions via text Q&A or dial in via phone. Instructions on how to dial in via phone can be found in the panel on the right side of the audio Q&A screen. We will now start the Q&A session. I have a first question via phone. I will now admit you. Please state your name and your company, and then you can speak. Please go ahead.
Yes, good morning. This is Holger Fisch from Zürcher Kantonalbank. Can you hear me?
Yes, we can hear you
. Okay. Good morning. Thank you for the presentation. I have a couple of questions, and I will take them one by one. First one would be on the property mix. In the portfolio, the commercial use is 10%. Could you talk a bit about the long-term strategy in terms of mix? Do you plan to further increase the share of commercial use in the portfolio? Could you also provide a word on the commercial tenants? That would be the first one.
Yes. Increase this mix and this commercial part. It was also opportunistic. We could buy office properties at very good yield. As I said also to some investors in the SFA presentation, our goal is really to increase now our income mainly in residential. We aim to keep roughly 80% of residential, 20% of commercial.
Of course, if we have, for example, the opportunity to buy an office building that we can transform into residential, we're going to keep, we're going to do it. Of course, it's not the goal to go over these 20% of commercial. Now, regarding the mix of the commercial, this is mainly office and mainly the three additional commercial buildings that we bought are in Geneva and are office buildings and very well located.
Thank you. Could you provide a word on the commercial tenants?
I don't have that readily available since we don't report up to now on that since we look ourselves as residential. I will come back to that. Okay. Thank you.
The second question would be on the acquisitions executed in 2024. Just to clarify, you acquired 15 properties for CHF 395 million and sold one property for CHF 22 million, right? Could you provide the rental income that you actually acquired and sold?
I mean, you see the properties in the property list, and I leave it up to you to add up these rental incomes that you are marked for each property, and you see the evaluation. I mean, in the residential portfolio at year-end, we have a gross yield of 3.63%. In the commercial part, we have 5.24% of gross yield. These are the references, the acquisitions in the commercial. The three acquisitions, they had higher yields than we purchased. As I said, we did not pay for the vacancy, especially in one building that we have discussed on 2nd of September in debt. The building Rue Morgin, which was purchased for over CHF 100 million, which is the largest property in our portfolio. The other properties, they are with gross yields purchased around 4.5%.
Okay. Thank you. The last one was a bit late to the conference. Did I understand it correctly that you expect to buy properties this year for about CHF 100 million or CHF 300 million?
CHF 300 million.
Okay. About the two acquisitions that you already did in 2024, could you provide details on those properties in terms of price and use and location?
One property is full residential in Geneva. The other one is mainly residential with some office on the first floor. The income, as I said, is CHF 2.7 million, and the cost was CHF 55 million.
It is in Lausanne. Yeah.
Okay. Thank you. That's it from my side.
Thank you. I'm going to mute you now, and we'll move on to the next question. At the moment, there are no questions in the call, so I'm going to move over to the board.
The first question is from Philip Züller, Zürcher Kantonalbank. Which net yield comes with the purchases in 2025, and which use? 2025, and for which use will they be? Which usage are we talking about?
Yeah. Or which usage are we talking about? Yeah. Purchase in 2025. I just answered before. Okay. That's what I thought, but I don't want to skip questions. I'm moving over to the next question, which is from Charlie Fehrenbach, AVP. Will the vacancy rate stay about on the actual level of 1.9% in the current year, or will it go back again? I take that very openly. We will see a decrease of that vacancy rate in 2025 since we took over a lot of these vacancies, and we are, of course, working on that on a day-to-day basis. We had already considerable new tenants in these buildings that we acquired.
It will not drop to the 2023 level because that is an all-time low that we cannot repeat, but somewhere in between these 2% now and the 1% overall. I do not know what will the world be in 12 months, so I cannot give you the guidance for the vacancy rate, but it will be lower than 1.9%.
Thank you. Now we are going to take a question from the Q&A session again. Ulrich Kaluscher, MV Invest. I am going to admit you now. You should be able to speak. Mr. Kaluscher, you would need to unmute yourself. I am going to send you a request. You might try again. In the meantime, I can switch over to the board, but I leave you in the audio Q&A session. Next question from the board is again from Philip Züller. At which net yield can you buy comparable residential and commercial real estate in Geneva? At the moment, what's your assessment of the market?
We just bought these two properties, so the gross yield was around 5%. It's not bad. For Geneva, mainly residential, it should be around 4% gross yield. For commercial office, I think on special case, we can still even reach 6%, but I thought it's more now, 5.5%. We are not really looking now actively on office building as we reach already our 20%, only if we can transform it immediately as a residential building. I think the main answer is gross yield now. I think we can still continue to buy. We are buying now a small property that we're going to sign very soon in March at a gross yield of 4.7%.
Thank you. I now see that Mr. Kaluscher is unmuted. Mr. Kaluscher, the floor is yours.
Thank you very much. Good morning, and thank you for taking my questions. I would like to go back to something you said earlier in the presentation where you referred to that the financial assets you have currently on the balance sheets are more or less covering your deferred taxes or deferred tax liabilities, which implies on the one hand side that you see that there's much more value. My question is about, do you have a timeframe on realizing that additional value? How can that be? Because as far as I know, these are mainly shares in a private health company. I don't know exactly about the liquidity, but maybe you have a put option or something like that in place. Can you elaborate on this kind of topic?
We do not communicate about this, but as I said, the three main assets, financial assets we have is PHM. You know that we invested CHF 50 million in the company. Of course, if there comes a liquidity event, an opportunity, we are going to analyze it, and we are going to elaborate if it is a good time to exit. The second one is NEO. Everyone knows NEO is an online broker, which is doing very, very well. We have actually record results on this company. There is actually also for us, it was a long-term investment. The last one is Taurus. It is this technology that allows the bank to hold digital assets, and they are signing large contracts with all the biggest banks, custodians, etc.
For now, what I said is, in my view, the valuation of all these three assets would offset the deferred tax. I maintain this, but I cannot give more detail as we are not active to sell these assets for now. Okay. Thank you. Thank you, Mr. Kaluscher. I will move you to visitors again. If you have another question, just raise your hand. With that, we are switching back to the board. There is another question from Philip Züller, Zürcher Kantonalbank. Do you want to develop the commercial property at the Place de la Navigation yourself, or do you only want to sell it?
No, actually this is a hotel, and we started to work to develop it now since one month, and it's going to become apartments.
We are doing it ourselves, and we don't have the view. The income will increase quite a lot.
Thank you. There is another question on the board from Philip Zoller, Zürcher Kantonalbank. Can you give us an update on renting out the free space in the Geneva Business Center? What's the vacancy rate at the End of the year compared to the vacancy rate when you bought it?
Thank you for this question. The Business Center has a vacancy at year-end of 8.3%. It's twofold. We have the data center, which is unchanged, partly vacant. And we had, at the End of the year, one tenant just closing the rental contract, not reviewing. In the meantime, we have found a replacement, so that vacancy will go away in the upcoming months.
Thank you. I will move to the next question from the board, which is also from Philip Züller, Zürcher Kantonalbank. What's the usage mix you are aiming for?
You want to go to 90-10, or do you want to increase the commercial exposure going forward?
I think we elaborated on that already. The 19% commercial that we see at the moment in the portfolio should not grow. That is our internal mindset limit. So, we are investing into residential, and that figure through the mix effect would then decrease again. Thank you. There is one more question from Philip Zoller, Zürcher Kantonalbank. It is concerning the revaluation effects of CHF 105 million. Can you provide a split between residential and commercial? Yes. I thought I answered that question already. The split is more or less 50-50, a little bit higher in the commercial part. Thank you. By the way, I do not want to put the blame on Philip Zoller from Zürcher Kantonalbank for repeating questions.
He partially put those questions in at the very beginning, but I wanted to clear out the question board.
No, it's all fine. I was not specific on residential and commercial, but now it's explained. With that, we actually cleared the questions board. If there are more questions that want to be asked verbally, that would be the time. At the moment, I don't see anyone raising his hand. There is a last opportunity for you to do that or put the question into the question board, but we don't have to extend this session without any reason. With that, I'll hand over to Stefan Wummer for closing remarks.
Thank you for participating in our conference call. It's truly appreciated. Of course, we remain at your disposal for any question you may have, and we wish you all an excellent day. Thank you. Thank you.
I see you soon. Bye-bye.
Thank you very much for attending this event, which will now be closed. Have a great day.