Ladies and gentlemen, welcome to Investis H1 2025 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 live stream 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. I will now hand over to Stéphane Bonvin, CEO of Investis.
Ladies and gentlemen, good morning, and welcome to the presentation of Investis Holding first half 2025 results. Thank you for your continued interest in our company. Today, I'm joined by our CFO, René Häsler, and by Laurence Bienz from Investor Relations. The agenda will be as follows. I will start with the highlights and a short market overview. René will present the financials before I conclude with the outlook and the Q&A sessions. As you have seen from this morning's publication, our results are excellent. There are two main takeaways I would like to underline. First, the strong revenue growth. We have executed a major strategic shift by focusing on our property portfolio and divesting our service division. The challenge was, of course, to replace the lost EBIT as quickly as possible through organic growth and acquisition.
We have clearly achieved this with rental income growing by 38% to reach CHF 38.8 million. At the same time, we maintain a very conservative LTV ratio of around 30%, providing us further firepower for future growth. Secondly, we achieve a significant evaluation gain of more than CHF 70 million. These gains are essentially the result of very attractive acquisition made in 2023. At the moment when interest rates were still high, our strategic anticipation allows to benefit from favorable pricing after selling a CHF 400 million portfolio in 2022 at excellent condition and divesting our service division in 2024. As a result, Investis is now a focused vehicle with a strong presence in Lake Geneva region, primarily in the residential real estate sector with mid-market rents. Our risk profile remain very low with leverage far below that of our peers.
Now let me briefly comment on the market environment. In 2023, 2024, acquisition were easier due to less competition. However, since this spring we have seen a return of many institutional players such as pension fund and real estate funds, who are again active buyers. As a result, in the first half we acquired only 3 properties, and in July we added the 4th, the latter representing additional annual rental income of CHF 3.8 million. Including this acquisition, our gross rental income now stands at around CHF 85 million with relatively low indebtedness. The window of opportunity for lucrative acquisition has narrowed faster than anticipated. Given the current level of transaction price, the expansion of our portfolio will be slowed down as we do not want to dilute the profitability.
Let me recall that since our IPO in 2016, we have multiplied the size of our portfolio by more than 2.5 times, while reducing our LTV by 8 percentage points. A clear sign of our ability to navigate market cycles and anticipate trends. As we have repeatedly said, our priority is to create long-term value for our shareholders, and we are committed to achieving this. Interest rate returned to zero in June and could turn negative by 2026. I'm not convinced that funding costs will fall significantly over the next 12 months. Investor expectation for margins remain high, reflecting the current volatile macroeconomic and geopolitical landscape. We will maintain a prudent position while continuing to create value through active asset management, including renovation, rooftop extension, redevelopment opportunities, while keeping a low risk profile.
Importantly, our dividend is well covered by recurring income with potential for future growth. With all that, let me now guide you through a few key figures for the first half of the year before giving you some more market insight. Highlight 25, I spoke about the rental income increase. Our portfolio increased by CHF 2.1 billion, the first time over CHF 2 billion in the history of Investis. The EBIT achieved an excellent number of CHF 95.7 million. Of course, the strong gain revaluation of CHF 71 million increased the NAV per share, excluding deferred tax to close of CHF 122. Overall, this is a compelling performance consistent with our strategy to focus on residential in Lake Geneva region with mid-market rents and a low-risk balance sheet. Now let's speak about the market trends.
What are the main developments in this first half year? Low vacancy rates persist. The strong demand persists. Inflation stays low. The rents continue to rise. We have still the locked-in effect. Older leases are significantly cheaper than the new ones. That limits, of course, the tenant turnover. This conducts also to an affordable housing shortage, which of course is worsening. Due to all these elements, the rental growth is projected to continue in 2025 and particularly in Geneva. Market drivers. As you know, when we assess the market, the main metrics we track are demographics, construction activity, regulation, and capital markets. For the first one, migration and demographics. For the first half year, Canton of Geneva population increased by 4,360 inhabitants, and this growth is concentrated in urban centers. That's exactly where we are invested.
The second element, construction activity. Supply remains far behind demand. In Q1 2025, Geneva added 345 units, and for Q2 only 570. This is roughly 1,800 per year versus nearly average 6,000 new inhabitants annually in Geneva. This year, due to the strong growth on the first six months, 4,300 should be more. Geneva is a tenant market with low ownership and a severe shortage of affordable rentals. Regulation, still the same. Economically, Geneva still very attractive due to the corporate tax regime and keeps growing companies reinforcing the demand. On the real estate side, restrictive construction rules create high barriers to entry and hold supply down, making it harder to catch up with the demographic growth.
Regarding capital market, as same what I said during my introduction. As expected, policy rates returned to 0% in June, macro geopolitical uncertainty has pushed risk premium and spread higher. We expect spreads to remain elevated over the next 12 months. Switzerland remains a safe haven, real estate stays attractive and investment demand should remain strong. Now I'm going through some slide. The first one is the democratic perspective. Population growth in Geneva and Vaud is expected to remain steady, driven by the migration from abroad. Smaller households and an aging population will grow the fastest. Reinforcing during the next years, we can see it on the graph even till the next 25 years. The demand for small and medium-size unit, the core of our portfolio positioning. Next slide, the vacancy rate.
Of course, vacancy rates keep falling. They stand at very low level in both canton, Geneva and Vaud. As said before, the shortage is worsening. Rental supply is the most constraining segment, and properties for sale are only rising slightly. The tightness supports rent levels and like-for-like growth potential. As we explain always, the like-for-like growth is with the business model of Investis. Next slide, the construction in Geneva. We can see that over the last 6 years, construction activity has remained on the level of around 8,000 units. The vacancy rate has kept below 0.5%, and the market absorption in the canton remains very quick, of course, due to the strong underlying demand fed by internal demographic pressure and immigration. Next slide, the rent index.
We observe a two-speed rental market because of the locked-in effect. Tenants keep existing leases for longer as new lease levels are materially higher. These limits turnover, keep supply tight and support steady rent reversion when units do change hands. Shortly, the slide regarding the prime yield versus the bond spread. One indicator we have followed for a long time in the spread between the Swiss ten years government bond and prime yields for property in Zurich and Geneva. We've seen that the spread compressed sharply during 2022/2023 rate hike cycle and has widened again since. For Geneva, the spread is currently around 2%, and we expect it to remain around this level. This reinforce the relative attractiveness of Geneva residential versus the risk-free rate. Next slide is our business model.
We have a buy and hold strategy. It shows that this buy and hold strategy delivers over time. The building shown on this slide has been, so it's Rue du Nant, has been shown since the IPO. Its rental income increased from CHF 623,000 in 2015 to CHF 816,000. This is a 31% rise, equivalent to 2.7% per year. As I just said before, this is our business model in action. With time and tenant turnover, rents step up and value compounds. Maybe to conclude my first part intervention. Investis is uniquely positioned in Switzerland, especially in the Lake Geneva region. We operate where undersupply is chronic and vacancy is consistently low. We focus on mid-market residential, not luxury. Demand is strong and sustained.
Rent growth is significant, and our average asking rents per square meter are among the leaders. Fundamentals are sound, and our portfolio is built to benefit. At this point, I hand over to René for the financial overview.
Thank you, Stéphane. Good morning, ladies and gentlemen, also from my side. Before I head into the very pleasing figures, just also highlighting the two main changes compared to the past. On the one side, as Stéphane elaborated, we walk the talk. We delivered on what we announced on the 24th of June last year when we announced the disposal of the real estate service segment. We replaced their operating profit by solid and recurring profits from the portfolio. Whether you look at the financials 2023, where we had an EBITDA of CHF 50 million, including the services. 2024, where we had half year the service in, we had CHF 49 million. If I look at the current performance into six months and we double that simply, we would again land at the same level of operating profits.
Delivery and execution is present. Now, the figures, very solid income statement. Rental income increased as projected to CHF 39 million. That includes both derivative and organic growth. Organic growth at 1.9%. The remaining part from the acquisitions executed in the last 18 months. Vacancy rate decreased as expected to 1.4%. Even so, June, we have normally slightly lower vacancy rates than at year-end. I think we can keep this level going forward. EBITDA margin. For that reason, we have added a co-column without service for 2024. There you see we had a margin of 55% against turnover, and this we could improve and increase to 63% in 2025.
Expecting that this level of EBITDA margins can be kept going forward. Workforce. We are rather a small company nowadays. Before we had over 2,400 headcounts. Now we are down to 11.2 full-time equivalents compared to 17.8 a year ago. Total EBITDA came to CHF 96 million, including the revaluation gains. I will come back to that on a later slide. Financial expense, CHF 2.5 million for the six months. A drop, an important drop against the last year, the CHF 3.5 million, and all that with a much higher level of debt. That was possible due to our financing strategy going short as we predicted that interests will come down. Maybe they came down a little bit faster than we thought.
Nevertheless, we could cash in on that strategy as well. Income tax, normal level, again, 14%, leaving then net profit at CHF 80 million. Excluding revaluation effects, the CHF 20 million that you see on the bottom line. As Stéphane said, I would like to confirm that on both levels, looking at FFO or at this net profit, excluding revaluations, dividend will be earned comfortably. Some more details on the now only business that we have is the portfolio. On the left you see illustrative the development over the last four years. From 2021, the semester income or total revenue income grew until 2022 when we sold a portfolio of 11 buildings for roughly or almost CHF 400 million.
Of course, rental income decreased until a low level in the second half of 2023, where we again started to acquire and enlarge the portfolio, and it grew that from CHF 26 million or CHF 27 million to now CHF 39 million of rental income. The like for like rental growth over the last five years, 2.1% on the higher end of our predicted range. We confirm that going forward, we expect a rent like for like rental growth of 1%-2%. Despite these rental increases, we still have 12% rent potential in our portfolio, i.e. CBRE, our valuation expert is estimating this rent potential, and the result is 12%. Would the rent be higher if we could rent all our apartments at market level?
All that is a result of, on the one hand, the rental contracts being indexed to CPI and not predominantly to the reference rate. We still have 11% turnover despite this locked-in effect that we elaborated before. What is the characteristic of our portfolio? First of all, a very low vacancy rate. You see Geneva, we are at 0.9%. Vaud, 1.2%. That is up against the very low level that we had before we acquired certain buildings with strategically some vacancy, and we did not pay for that. On commercial, we are also very low at 2.4%. We are residential, we are Lake Geneva region, and we are in smaller apartments, i.e. 1 to 3 room apartments. That is the characteristic of our portfolio.
Coming back to the revaluation gains of CHF 71 million, you see here that we had a little dip in 2023 when interest got up. We had to account CHF 48 million of revaluation losses. At the time, we were hit probably a little bit harder in the Lake Geneva region than the rest of Switzerland. That also gives us potential to compensate. As you see, last year and this year, we could again profit from lower discount rates, also the increased cash flows contribute to that result. Last but not least, the attractive acquisitions that we executed this year contributed as well strongly to that performance of CHF 71 million of revaluation gains. Of course, market rents follow the trend. That is also positive and gives us additional rent potential going forward. Yeah. An easy slide.
You see the development of the portfolio with the growth strategy until 2021 when we decided to sell part of it to get rid of a big part of our financial debts executed in 2022. 2023 was a year of transition. Before 2024 and 2025, we now acquired again a lot of properties, and this results in a portfolio of CHF 2.1 billion as we speak. All that important information from the income statement. We should not forget that there is also a balance sheet, a very solid and strong balance sheet. You might say it's boring, but it's also important that we don't have risks on the balance sheet going forward. Portfolio on the one side is financed with CHF 639 million financial debts.
We have some deferred taxes that probably will not be paid in the next couple of years. They are not discounted, but the value of them would be much lower. Leaving then, as per June 25, a strong equity of 62% or CHF 1.4 billion on this level. Financial debts. We said always we are comfortable with a leverage of 40%. We are still far away from this 40%. At June, we had CHF 640 million of debts. You see 60% is financed with short-term bank loans. That gave us the possibility to profit from the decreasing interest rates. We have some private placements, and as well, two bonds outstanding with maturity next year, 2026, and the other one in 2028. This was the short summary on the financial figures.
Thank you very much. I hand over to Stéphane.
Well, thank you, René. For now, regarding the outlook. Looking ahead, our outlook remains very positive. In July, we completed another acquisition, adding CHF 3.8 million of annual rent. Demand in the Lake Geneva region remains strong, as I explained before, thanks to the good demographics and the area's international appeal, with construction remaining insufficient, keeping vacancy low. We don't see any change there. Given the acquisition of the last 18 months, we anticipate substantial rental income growth for full year 2025 and are confident we will clearly exceed the 21% full year guidance issued in March. At the same time, we will remain prudent, focused on value add asset management, and keep our risk profile low. As we explained it before, our dividend is fully covered by recurring income with potential to increase over time.
Thank you very much for your attention. Now, we will be happy to take your questions.
Okay. I have here a question from Rolf Kunz. Could you please give some more details on the July acquisition? Like what kind of building yields, letting levels, net rent potential?
I mean, the rent potential or the rent, the full occupancy rent is CHF 3.8 million, as stated. The purchase price of that building was CHF 50 million. It's a commercial building that we can transform easily into residential. That is the reason why we purchased that building. At the moment, it's almost fully let with offices and partly already transformed into residential. There are still commercial rental contract in there. We have a 15% vacancy. That is not a concern for us. In fact, it's an asset because that building, 10,000 square meter of offices, they have 270 parking places which are not let nowadays. We will use them once we transform them into apartments.
Having these parking places even vacant today is not a concern to us.
The next question is from Mr. Renaud Bentégeat. In terms of acquisition strategy, are you considering also 100% commercial properties, or would you focus only on residential?
We bought quite a lot of office building. We are still considering it, but of course, only if we can transform it in residential. If it's really a pure office building fully let for the next 20 years, so we have no interest. Now, the last acquisition for Investis that we did in July already the former owner started the process to convert in apartments, and there we're gonna finish it. That's the strategy actually.
I have an additional question from Philippe Züger. How many potential purchases are currently still blocked by the municipality rights of first refusal, Vorkaufsrecht? What is the scale of these purchases? What is their intended use, and when will they be completed?
It's rather easy. At the moment, we have no signed acquisition contracts or the purchase agreements. Therefore, we have no acquisitions under review by the authority. As a remaining additional information, normally the community and the canton, they have both 40 days, more or less a deadline to opt in and purchase. All our acquisitions we had in the past, we had only twice the municipality.
Yeah.
That, opted in. All the other acquisitions, we got clearance within these deadlines.
Okay. Thank you. I have no more written questions. Any oral questions, operator?
At the moment there are no questions. There was a try from Matteo Lindauer. If you want to give it another one, I will unmute you. But at the moment there are no more written questions and no one in the audio waiting line.
Okay. Well, in that case, if there are no more questions, I'll hand over to Stéphane Bonvin for the closing remarks.
Okay. Thank you for your continued interest in Investis. Of course, Laurence or René or myself, we are always available for direct question. I wish you all a very good day. Thank you.
Thank you very much for attending this event, which will now be closed. Have a great day.