Ladies and gentlemen, welcome to Investis h one two twenty five 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 and 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 and a. Details on that process will be explained at the later stage. I will now hand over to Stephan Bover, CEO of Investis.
So ladies and gentlemen, good morning, and welcome to the presentation of Investis Holdings first half twenty five results. Thank you for your continued interest in our company. Today, I'm joined by our CFO, Rene Hesler and by Laurence Bienz from Investor Relations. The agenda will be as follows: I will start with the highlights and a short market overview, then Rene will present the financials before I conclude with the outlook and the Q and A session. So 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 38,800,000.0.
At the same time, we maintained a very conservative LTV ratio of around 30%, providing us further firepower for future growth. Secondly, we achieved a significant evaluation gain of more than 70,000,000 These gains are essentially the result of very attractive acquisitions made since 2023. At the moment, when interest rates were still high, our strategic anticipation allows us to benefit from favorable pricing after selling a €400,000,000 portfolio in 2022 at excellent condition and divesting our Service division in 2024. As a result, Investisse is now a focused vehicle with a strong presence in Lake Geneva region, primarily in the residential real estate sector with mid market trends. Our risk profile remained very low, with leverage far below that of our peers.
So now let me briefly comment on the market environment. In twenty twenty three-twenty twenty four, acquisitions were easier due to less competition. However, since this spring, we have seen a return of many institutional players, such as pension funds and real estate funds, who are again active buyers. As a result, in the first half we acquired only three properties, and in July, we added the fourth, the latter representing additional annual rental income of £800,000 Including this acquisition, our gross rental income now stands at around million, with relatively low indebtedness. The window of opportunity for lucrative acquisitions has narrowed faster than anticipated.
And 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 eight 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. Also, interest rate returned to zero in June and could turn negative by '26. I am not convinced that funding costs will fall significantly over the next twelve months.
Investors' expectations for margins remain high, reflecting the current volatile macroeconomic and geopolitical landscape. Therefore, 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. So 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. So highlight '25, I spoke about the rental income increase.
Now our portfolio increased by 2,100,000,000 the first time over £2,000,000,000 in the history of Investis. The EBIT achieved an excellent number of 95,700,000.0 and of course the strong gain revaluation of 71,000,000 increased the NAV per share excluding deferred tax So overall, this is a compelling performance consistent with our strategy to focus on residential in Lake Geneva region, with mid market trends and a low risk balance sheet. So 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 lease are significantly cheaper than the new ones that limit of course the tenant turnover, and this conducts also to an affordable housing shortage, which of course is worsening. And due to all these elements, the rental growth is projected to continue in 2025 and particularly in Geneva. So 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 demographic, for the first half year, Continent Of Geneva population increased by 4,360 inhabitants and this growth is concentrated in urban centres.
That's exactly where we are invested. The second element, construction activity, supply remains far behind demand. In Q1 twenty twenty five, Geneva added three forty five units and for Q2 only five seventy. So this is 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. So Geneva is a tenant market with low ownership and a severe shortage of affordable rentals.
Regulation, still the same economically. Geneva is still very attractive due to the corporate tax regime and keeps growing companies reinforcing the demand. But 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 markets, as same as what I said during my introduction, as expected, policy rates returned to 0% in June, but macro geopolitical uncertainty has pushed risk premium and spread higher. We expect spreads to remain elevated over the next twelve months, but Switzerland remains a safe haven, so real estate stays attractive and investment demand should remain strong.
So now I'm going through some slides. The first one is the democratic perspective. Population growth in Geneva and Vault is expected to remain steady, driven by the migration from abroad. But smaller households and an ageing population will grow the fastest reinforcing during the next years we can see it on the graph even till the next twenty five years, the demand for small and medium sized units, the core of our portfolio positioning. Next slide, the vacancy rate.
Of course, vacancy rates keep falling. They stand at very low levels in both Compton, Geneva and Vaux. And as said before, the shortage is worsening. Rental supply is the most constrained segment and properties for sale are only rising slightly. The tightness supports rent levels and like for like growth potential.
And as we explain always, the like for like growth is a little bit the business model of Investisse. Next slide, the construction in Geneva. We can see that over the last six years, activity has remained on the level of around 8,000 units, but the vacancy rate has kept below 0.5 and the market absorption in the content remains very quick, of course, due to the strong underlying demand fed by internal demographic pressure and immigration. So next slide, the rent index. So 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. This limits turnover, keeps supply tight and supports steady rent reversion when units do change hands. Then 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 spreads compressed sharply during twenty twenty two-twenty twenty three 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 reinforces the relative attractiveness of Geneva Residential versus the risk free rate. So next slide is our business model. We have a buy and hold strategy, and it shows that this buy and hold strategy delivers over time. The building shown on this slide has been so it's Rue Du Nordhorn has been shown since the IPO, And its rental income increased from $623,000 in 2015 to $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, rent step up and value compounds. So maybe to conclude my first part intervention, Investis is uniquely positioned in Switzerland, especially in the Lake Geneva region. We operate where under supplied 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. So at this point, I hand over to Rene for the financial overview.
Thank you Stefan. 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 Stefan elaborated, we walked the talk, we delivered on what we announced on the June 24, 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 '23, where we had an EBITDA of 50,000,000 including the services, or '24 where we had half year the service in, we had 49,000,000 and 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. So delivery and execution is present. Now the figures, very solid income statement, rental income increased as projected to €39,000,000 That includes both derivative and organic growth. Organic growth at 1.9 and the remaining part from the acquisitions executed in the last eighteen months. Vacancy rate decreased as expected to 1.4%, even so June we have normally slightly lower vacancy rates than at year end, But I think we can keep this level going forward.
EBITDA margin, for that reason we have added a column without service for 2024 and 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 head counts, now we are down to 11.2 full time equivalents compared to 17.8 a year ago. Total EBIT came to 96,000,000 including the revaluation gains.
I will come back to that on the later slide. Financial expense 2,500,000.0 for the six months, a drop an important drop against the last year 3,500,000.0 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, but nevertheless we could cash in on that strategy as well. Income tax normal level again 14%, leaving then net profit at 80,000,000 or excluding revaluation effects, the 20,000,000 that you see on the bottom line. So as Stefan 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 development over the last forty years from '21 the semester income, total revenue income grew until 2022 when we sold a portfolio of 11 buildings for roughly or almost 400,000,000, then of course rental income decreased until low level in the '23, where we again start to acquire and then launch the portfolio and it grew that from 26 or 27,000,000 to now 9,000,000 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 like for like rental growth of one to 2% and despite this rental increases we still have 12% rent potential in our portfolio, I. E. CBRE, our valuation expert is estimating these rent potential and the result is 12%.
Would the rental 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 promptly to the reference rate. And 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'll see Geneva we are at 0.9%, VO 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, And 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. One to three room apartments. That is the characteristic of our portfolio.
Coming back to the revaluation gains of 71,000,000, you see here that we had a little dip in 2023 when interest got up. We had to account 48,000,000 of revaluation losses. At the time we were hit probably a little bit harder in the Lake Geneva region than the rest of Switzerland, but that also gives us potential to compensate and as you see last year and this year we could again profit from lower discount rates, but also the increased cash flows contribute to that result. And last but not least, the attract acquisitions that we executed this year contributed as well strongly to that performance of 71,000,000 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 '24 and '25 we now acquired again a lot of properties and this results in a portfolio of 2,100,000,000.0 as we speak. All that important information from the income statement, but 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. Of course, portfolio on the one side is financed with $639,000,000 financial debts.
We have some deferred taxes that probably will not be paid in the next couple of years, so 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 1,400,000,000 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 $640,000,000 of debts, you see 60% is financed with short term bank loans that gave us the possibility profit from the decreasing interest rates. We have some private placements and as well two bonds outstanding with maturity next year '26 and the other one in '28.
So this was the short summary on the financial figures. Thank you very much and then I hand over to Stefan.
Well, thank you, Rene. So now regarding the outlook. Looking ahead, our outlook remains very positive. In July, we completed another acquisition, adding $3,800,000 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 a vacancy low.
We don't see any change there. And given the acquisition of the last eighteen months, we anticipate substantial rental income growth for full year 2025 and are confident we will clearly exceed the twenty one percent 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. And as we explained before, our dividend is fully covered by recurring income with potential to increase over time. So thank you very much for your attention and now we will be happy to take your questions.
Okay. I have here a question from Rolf Kultz. Could you please give some more details on the July acquisitions, like what kind of building yields, letting levels, net rent potential?
Yeah, I mean the rents potential or the rent, the full occupancy rent is 3,800,000.0 as stated. The purchase price of that building was 50,000,000. It's a commercial building that we can transform easily into residential and 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, but, 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 two seventy parking places which are not let nowadays, but we will use them once we transform them into apartments.
So having these parking places even vacant today is not a concern to us.
The next question is from Mr. Renald Hugo. In terms of acquisition strategy, are you considering also 100% commercial properties or would you focus only on residential?
So 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 truly a pure office building fully let for the next twenty years, so we have no interest. Now the last acquisition in Versoir that we did in July is already the former owner. He started the process to convert in apartments, and there we're going to finish it. So that's the strategy, actually.
I have an additional question from Philippe Zugger. How many potential purchases are currently still blocked by the municipality rights of first refusal for Calfsreicht? 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 a forty days more or less a deadline to opt in and purchase. On all our acquisitions we had in the past, we had only twice the municipality 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 moment there are no questions. There was a try from Mathieu 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 Sefan Bonwei for the closing remarks.
Okay. So then thank you for your continued interest in Investis. And of course Laurence or Rene or myself we are always available for direct questions. So 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!