Ladies and gentlemen, welcome to our media conference today. You remember half a year ago, we had buses stuck in the snow, today it's hot. It's hot in the buses. I thought, why not move our financial year by half a year to give us better weather for the media conferences. We're here today to talk about a successful semi-annual closure of financial figures. René Zahnd is here. Markus Meier is here. Oliver Hofmann cannot be here. All the other gentlemen from the subsidiaries, the Cornerstone subsidiaries are here. Let's begin with the highlights. Over to René Zahnd.
Good morning, ladies and gentlemen. Let's get started with my presentation. It's easy to give a presentation when the half-year results are as good as they are. It's fair to say they are good.
Let me go through the items, give you some figures at the beginning, then more detail, in particular about the real estate core business. Let's begin with the real estate portfolio. An increase in 5.4% to CHF 10.8 billion. CHF 10.8 billion has to be achieved in the first place. If you take the difference to the first half 2017, then deduct revaluation to the tune of around CHF 63 million, we have CHF 500 million left, we generated in terms of growth, be it by acquisitions or project development or realization and completion of building projects. Operating income growth of 10.3% to CHF 585 million. Rental income, a very important figure. After all, we're a limited company in real estate with real estate as a core business, up 4.2% to CHF 241 million, EBIT is up 7.9% to CHF 233 million. Moving on to profit. There's an increase of 15.4%.
This is profit without revaluations of deferred taxes, profit of CHF 151 million. Let's move to the bottom. Of course, profit is decisive for distribution to the shareholders. This profit gives us a current state of CHF 2.11 of earnings per share, CHF 2.11. Let me remind you that last year's dividend for 2017 was at CHF 3.80. Equity ratio, there's a slight decrease down to 41.2%, the net asset value rose by 1% to now CHF 65.25. Bear in mind, please, that the segment of services related to real estate includes book values only. Moving on to the details on our core real estate business. New and renewed leases in the first half year, we totaled almost 100,000 sq m of space. 100,000 sq m. Well, Prime Tower is always the reference point.
It's 2.5 times the surface of the Prime Tower, in terms of francs, what does it mean in terms of francs? It's CHF 21.5 million of rental income that we have secured again. Moving on to acquisitions on the investment property, check the slides. We've got the Iseli site at Regensdorf from the one hand, however, not relevant to the first half year of 2018 yet, as closing has only occurred in July 2018, is the office building at Beethovenstrasse in Zurich, fully leased. We've got acquisitions in the project development pipeline. One of them is a lot in Monthey, which is fully leased. The Tertianum will be the tenant. Monthey is in the canton of Valais. The other one is acquisition of the West-Log project in Zurich, Altstetten, completed by 2020.
There will be an additional rental income of around CHF 10 million of these projects combined. Moving on to divestments. You know that we do not wish to divest investment properties, but parts of our development projects, which we did this year by selling Weltpost Park to Allianz Suisse, with all the confirmations coming in before the end of June. Part of it went into the first half financial figures. Construction process at Stücki, for instance, we'll be coming back to this, and we have the foundation stone laid for Espace Tourbillon Plan-les-Ouates, and topping out ceremony at Yond in Zurich, just before the summer break. For the acquisitions here, we've got two appealing ones, the Iseli on the right-hand side, Regensdorf. Why is this exciting?
We are expecting a future change of the regulations on the zone there in Zurich, and we are expecting to wait with the development steps to get to the right point in time. On the left-hand side, we've got the acquisition of the Beethoven-strasse, Zurich. Highly flexible building. Why flexible? Why is this building flexible? First of all, architects among us would say, "Well, it's got an excellent access situation, a reasonable static concept, and reasonable facade." All this means that this can not only be let to different tenants, but it would also allow for a single tenant. This is why this acquisition is very important to us, because we think there is substantial value to this property. For project acquisitions, let's get started on the left-hand side. West-Log at Zurich Altstetten. It's pre-leased to the tune of 85%.
It's a logistics building, a city logistics building, we are convinced that this segment is going to develop nicely. Logistics providers want to be as close to city centers as possible, which is the case in this location. From those locations, fine-tune distribution will be made to the city centers. We will cede on the yield. We booked it as a project. We didn't develop it ourselves. It was a fully developed project we bought from Implenia, but we couldn't show it under investment properties because it's not even built yet. It's a hybrid, really. I'll be coming back when talking about the figures. On the right-hand side, we've got a project acquisition on behalf of Tertianum, a new residential care center at Monthey, with a total of 50 care beds and 30 to 40 apartments.
This allows me to announce how we distinguish between the investment foundation, managed by Swiss Prime Site Solutions and the Swiss Prime Site as far as which portfolio the Tertianum buildings go. When there is more surface for care to be considered a service, then it's for Swiss Prime Site. If there are more apartments, then it's residential living, and it's a project for the investment foundation. Project sales. I won't talk about Plan-les-Ouates, the two sales we had to Hans Wilsdorf Foundation last year. I won't dwell on that anymore. Let's focus on the left-hand side, the residential property in Bern that we sold to Allianz Suisse in Bern at an appealing price, it's fair to say. Why did we develop that at all? It's only a residential building.
We owned the piece of land, and the City of Bern only allowed for residential purposes, so it was clear for us to develop this building and sell it rather than transfer it to our own portfolio. On the left-hand side, in summary, you can see that we had, again, revaluation gains of CHF 35 million, which is more or less in line with the CHF 37.4 million last year. Four-fifths of this is due to development properties and one-fifth on the investment properties. You can also see that net property yield was held at 3.7%, although we carried out acquisitions or developments or construction to the tune of CHF 500 million. The vacancy rate is currently 4.7%, very appealing compared to 5.2% at least, which we posted at the end of last year. Moving on to details for buildings under construction.
You can see NZZ-Areal One, and this is NZZ-Areal Two at Schlieren. The project under construction is the building as it stands today, and the second one will be a project where we can add additional volumes on the site. That is why we divided it into what we're having under construction today on the one hand, and what is going to be in development. When you see Stücki Park one and two in Basel, we are referring not to the remodeling of the shopping center, which is going on already, but we are referring to the new construction of the four buildings between the shopping center and the existing building, and you will see a picture later on. The project development pipeline is still very appealing. It's around CHF 2 billion. We're going to invest in it further.
Whenever we sell something, we've got to add new material to benefit from future developments. This is the summary of the pipeline. Let me focus on the column on the right. You can see under construction, the yields, gross and net, 5% and 5.7%, and 4.7% and 4.53% for in development. Those who've followed the charts will see that the real differences to the last presentation, that's very clear because we are not building the same projects. We're not having the same projects in development. We are trying to update this slide all the time. Question that always arises is why are you lower in development than under construction? My answer is always the same. In development, you have some unknowns. Especially the question of how you can at what level you can actually carry out construction.
Net yield, once the projects will be moved from development to under construction, will be increased. Let me also summarize the project development business. It makes us independent from the investment property market. The yields are more appealing compared to the rest of the portfolio, and we've got additional growth in rental income, CHF 92 million, that we're showing already. Fourth, it's interesting because parts of the developments can be sold, as we did in Plan-les-Ouates and Weltpost Park in Bern, to realize additional gains. Fifth, the development business is interesting for reevaluation. Sixth, and last but not least, development skills are crucial for modernizing the properties on the portfolio and for lowering the vacancy rate. For the project sold at the bottom here, you are familiar with the figure.
We are expecting from the two sales of project, the two buildings of the possible five buildings in the Espace Tourbillon Weltpost Park, around CHF 100 million of pre-tax profit in the years 2017-2021. We're trying to smoothen this by percentage of completion so that we are not taking in the entire profit in a single year but can distribute it over several years, which will be a reasonable presentation of figures. Just a few words about some selected projects. This is this new construction, the Four Finger Docks we talked about. Investment volume of total of CHF 188 million, and at the same time, we are modernizing the Stücki Shopping Center. We are creating 1,700 workplaces in a segment that we can only build in Basel, more or less. It's a combination of office and lab space.
This is certainly an interesting project that fits wonderfully in this location and in the history of this place. This is a relatively current picture of the large building site at Espace Tourbillon. This is no office space, but commercial space. There will be basements for lorries to have direct access to the building. Certainly unique, and that will make this project successful. You are familiar with this picture, that's Yond. It's the buildings where we managed to get a building permit from the city of Zurich to allow for both commercial and services use. We can switch between commercial and services purposes without having to reapply. Finally, the Pont-Rouge project at an interesting place, interesting location. We worked on the surfaces and on the ground plans.
If you remember the last slide, by the end of the year, the yield that we posted was 4.0%. We're now at 4.3%. How did it grow? It's part of the development business, and we managed to use the most profitable surface areas, the ones that you will be able to sell. It's not a technical area, but where your bed will be stand on. We've managed to work on that. We generated more surface area inside the same volume, and we reduced the staircases, and this produced an additional 0.3% of yield even before applying for the permit. Before submitting the project to the future provider will erect it. Much on our core business, and we always show this slide on the services segment. Let me just focus on the highlights.
First of all, Wincasa, the highlight certainly is the CHF 67 billion assets under management, a new record high. The other highlight is transformation of this unit into a more digital one, digitalized one with various projects going on CVC, Customer Value Center, at the Roter Turm in Winterthur. What is it meant to achieve? It's meant to achieve that we can assign our best people to where they can produce the highest benefit with customers. The CVC is to handle routine questions. Much on Wincasa. You will have seen in EBIT that the figure is in line with our expectations. We're on course there. Jelmoli generates great sales per customer and per articles per ticket. This is positive news. These two growth parameters compensated somewhat to a decrease in footfall, which usually occurs in the first half year.
Jelmoli has its best period of business from September to December. That will be the crucial four months. We're convinced that we will be within our budget by the end of the year. With the new ladies department, we hope to be creating a new level of quality in Zurich. In the men's world, the men's department that we refurbished last year, revamped last year, we are setting a new standard, and we want to achieve the same for the ladies. If we compare the figures between the men's and the women's department, we can see that the men's department is doing very well. Tertianum, successful introduction of the SAP system in the German and Italian-speaking parts in Switzerland. It will be introduced from 2020 in the French-speaking part of Switzerland.
We are now active in 77 sites, 3,050 beds in apartments, 1,800 apartments, which of course requires a great deal of personnel. It's an interesting business. Those who are trying to extrapolate EBIT figures through the end of the year, I'll have to say that end of year figures will be better than that. We opened four new Tertianum businesses last year. This is ramp-up cost, where you have to provide the personnel but have no revenue yet. This will be compensated by the end of the year, and the second half year has more days, as simple as it may sound. If you have more days to calculate your services for, you'll end up with higher figures. Last but not least, Swiss Prime Site Solutions, CHF 1.5 billion of assets under management on behalf of the investment foundation.
It's worth mentioning here that we have reinforced the entire team. We've got a new team, really, that will take care of the services part. We hired a seasoned executive. It will be for the investment foundation to announce who it is, and you will then receive the name in due course. In the services segment, we had an increase in operating income of 7.2% and an increase of 15.5% on EBIT. Let me hand over to our CFO, Markus, at this point.
Thank you very much, ladies and gentlemen. I would now like to talk to you about the financial details of the successful year financial figures 2018 first half. We had an increase in rental income and profit from sales of properties from real estate developments. The POC method, that means according to percentage of completion. Tertianum has grown strongly due to the projects that we have and the implementation of new operations. Wincasa is above the previous year due to higher management fees, construction management fees. Jelmoli has certainly been weathering the difficult market environment and are still at the same level as last year in terms of sales. Finally, asset management solutions is also above the previous year. Let's start with rental income at group level, which have risen by 4.2% to just over CHF 240 million.
As you can see here, at the center, we have the sales and finished projects. A total of CHF 6.3 million come from that area. That's very positive. These are the Iseli site, the development site, which is already generating yields, and the acquisition in Winterthur of the end of last year of Mäander. That's on the Roter Turm site. We've been able to bring all the red bricks together and bring together what should be together. The developments that are responsible for the increases of finished projects are in particular Motel One in Zurich and the mixed property in Meyrin, near Geneva, and a project on assisted living at the project Eselgut in Wollishofen. In terms of changes to various existing properties, like-for-like, added up to CHF 3.5 million.
This is, on the one hand, due to the improved rental contracts for offices, OBOS at the Zug train station at the Stücki Business Park. This is the existing property, a mixed-use, laboratories and offices. Which we've been able to rent out again, and also rental increases in main retail spaces in Geneva and Lausanne. CHF 3.5 million also included some burdens in terms of retail space rental at shopping center A1 in Oftringen, which we are deconstructing to realign it as a specialist retailer, which was the original intention of the project anyway. It is now totally vacant, and in the second half of 2018, it's going to be realigned and refurbished as a specialist retailer. We already have a long-term rental contract with a specialist retailer. There was also slight general pressure on retail rents in the medium price category in medium quality locations.
On average, our level has been stable in terms of retail space rental. We lost CHF 1.8 million from rented property in assisted living segment. This is mainly due to the refurbishment of the former Stücki Shopping Center, where 20,000 are at the moment unusable and not rentable. This, of course, is a loss. CHF 1.8 million increase from rented properties in the assisted living segment. Tertianum has certainly boosted our growth rates here. Top line, you can see on the left-hand side an increase of just over 10% compared with last year. In the middle, you can see the EBIT distribution according to segments. As far as services are concerned, you can see again, a division.
Top line, 10% growth in both areas, accumulated in real estate, as you can see in dark here, growth which was driven by the sales in POC projects according to progress of construction. That's quite a considerable number, particularly because in the last half year, we never had these sales. We sold two properties at the Plan-les-Ouates site in Geneva in the second half of 2017. These sales were not recorded until the second half of 2017 accordingly. We also saw growth in terms of rents and lower vacancy rates. As far as services growth is concerned, CHF 25 million, 7%, mainly comes from assisted living. That's CHF 18 million. These are additional sales growth and CHF 2 million additional in rental income.
The remaining CHF 5 million is increased income from the area of real estate services, Wincasa and Innovaris in the consultancy sector. The composition of the EBIT according to segment shows that 93% is from the core business of real estate, which is not surprising, and services are split as follows. Tertianum, we can see an EBIT growth which does not correspond to the top-line growth, which is very strong. This is due to the fact that four new operations are currently in ramp up. That means that the cost base in terms of staff, depreciations, is already ongoing, but we're still waiting for these sales to come up to speed. This is an overproportional cost share, which is going to normalize again once the whole thing is up and running. Wincasa has a very strong EBIT rise compared with last year.
Let me just say that in the second half of the year of 2018, we're expecting slightly higher cost base due to investments in IT services. At Jelmoli, we're below the EBIT of the previous year. Clearly, even though we have done relatively well in terms of sales, we have shown good results in the segment of men's fashion, men's shoes, as well as food and gastronomy. We're very happy here with the result. However, women's fashions and accessories have stayed behind expectations in the first six months. We've taken measures here, and we are going to be able to improve this situation. Solutions are showing strong growth in terms of EBIT compared with last year. Here you can see the group profit and loss account. The 10% increase in terms of operating income that we mentioned earlier is shown here.
Revaluation, CHF 35 million at previous year's level. Once again, the distribution is very one-sided here in terms of prime sites. The 10 major positive value adjustments added up to CHF 50 million. These include sites such as the Prime Tower, where we are now. The office buildings in Bern, Espace Post, and also rental increases in Zug in rental offices. We also had some positive revaluation adjustments in high street retail properties in Geneva and Zurich. The project development business has also made an important contribution, in particular, the Espace Tourbillon Geneva. There are three buildings that we still own. Two have been sold, and three were retained, and they were able to achieve a revaluation gain. The average real discount rate fell by five base points at the end of 2017 to 3.3%. This corresponds to a nominal discount rate of 3.82%.
The successful sale of investment property is CHF 6.3 million. It is difficult to compare to last year. This is the first phase of the sale of a Bern property, the Weltpost Park. The property was sold at the end of June in 2018. In the first phase, we sold the land and the project, which generated the profit mentioned. In future, we are still going to continue construction. Until the project completion in 2020, we are going to have sales in line with the construction process. Operating expenses went up considerably by CHF 80 million from property value developments. The other half that was mainly generated by the strong growth of Tertianum Assisted Living, mainly personnel costs, but also depreciations and expenses for goods and property. Compare on the 13th of June 2017, we had 4,600 full-time equivalents compared with 4,900 full-time equivalents this year.
The financial expenditure was reduced once again. We were able to benefit from the low tax rates in the financing market. Less financing expenditure despite a slightly higher financing basis. Tax rate, tax expenditure also rose due to the sales of properties in Geneva, which are subject to higher tax than the remaining business. A profit of CHF 152 million before revaluation effects and all deferred taxes. At the moment, the sales are only calculated at deferred taxes, and once the taxes become payable, these will be deducted. This shows that the property portfolio rose to CHF 186 million or 1.8%, and this was mainly from investments, 85%. In fact, around one-third from acquisitions and two-thirds from investments in existing properties and real estate projects. This of course, also includes the revaluation effects.
Investments in reconstructions, modernization, and projects have generated an increase of almost CHF 80 million, such as Schönburg in Bern. These are rental apartments with hotels and retail space in a prime location in Bern. The Tourbillon Plan-les-Ouates project are three properties that are already under construction. Acquisitions. Here, Regensdorf, the Iseli project stands out and the new logistics project in Zurich West, and an additional project in Monthey. Investments in existing properties were CHF 60 million net. Here we should mention the prime properties in Zurich, Geneva, Bern, and Zug, as well as the mall at the Stücki Business Park. We also sold a project, including the land, the project Weltpost Park in Bern, and also a relatively small office unit. Here's equity.
You can see here that we have a very good dividend payout, which was carried out in April, which leads to a solid equity basis of CHF 4.7 billion, with an equity ratio of 41%. Financing structure, we are going to continue to seize opportunities in these markets, as we did at the beginning of this year, where we issued a seven-year convertible bond of CHF 300 million with a 0.325% coupon. The special characteristic of that bond is that if the conversion takes place, we will be fully flexible by being able to choose between redeeming them either in cash or as a registered share. That's a very attractive option for us, which we can use in order to meet our needs.
In July, we took the opportunity offered by the market to issue a six-year straight bond of CHF 115 million with a 1% coupon. This results in a reduced interest rate of 1.4% and average maturity of 4.4% interest rate by volume. These are the financing figures, and I would now like to hand over back to René Zahnd.
Thank you, Markus. In conclusion, ladies and gentlemen, I'll move on to the economic outlook. Beginning over on the right-hand side with politics. There's a positive thing, positive news to announce for our industry. You will all have heard that Lex Koller will not be reinforced. In the extreme case, it would've been impossible for foreign shareholders to invest in real estate companies. I think I'm speaking on behalf of the entire industry that we're very happy that this is off the table. Whether a referendum will be launched to bring this back, we cannot know. It also ties in with population growth. You know that positive net migration, immigration has reduced down from 80,000 positive net immigration to around 40,000. It has reduced by almost half.
Of course, things are much more complex than that, but the issue is no longer as delicate as it used to be. The reduction of increase in population will certainly help us. Immigration will no longer be as hot a topic as a year ago. As for geopolitical risks, I'm not going to make any statements there. It's very difficult, but you don't really know on any single day what to expect at political level for the next day, and we have no control over this. We try and do our job as well as possible. For the capital market, what is important for our segment is that we expect for interest rates to remain low or only to rise moderately. If they rise, we are convinced they are going to rise very slowly. There won't be any sea change to it.
That's the way we see it by the end of 2018 and going into 2019. Fundamentally, the Swiss economy seems to be robust, which means there will be more consumption of space, which is a positive thing for us. Let's talk about the segments of use. I'll be pleased to do that. What is our take on the residential market? Although we're not in the residential market, but Swiss Prime Site Solutions is, as an asset management service provider and for the Swiss Prime Investment Foundation. You will all have read that there's too much construction in the wrong places. Add to this, that if investors don't know what to build, they'll build three-and-a-half room apartments across Switzerland. People are not really dealing with the real need that the population will have for residential buildings in future.
It may work in the current situation of immigration and with a high divorce rate of around 50%, but it's gone down. Why is this important? Because the number of households is the key figures. Households produce consumption of space. If you have to build more households, you need to build more apartments. Not only three-and-a-half room apartments, you have to have perfect knowledge of demand. Three-and-a-half rooms will be too expensive for many singles households, for instance. You will need more smaller apartments. Much on the residential segment. Moving on to office space. There's certainly been a relaxation of the situation in the office surface market, especially in Zurich and Geneva. Positive for the CBD district in Zurich and Zurich West, not only because we're located here, but we're seeing that there is real demand for office space.
Somewhat more reserved, we are personally about Zurich North, where we're not really active. This is to do with the current construction, Andreasturm at the Oerlikon station. The circle will be completed by 2020. This will have a positive effect in Jelmoli, if we can move in there, and the circle will also offer office space. I'm convinced that at the end of the day, it will all be leased, because after all, it's the airport. As a result, the office landscape there will be split between the airport and the Oerlikon station location. Everything in between, such as Oerlikon, Glatt, the Glattzentrum, will be in a more difficult situation, but it's positive for Zurich. Moving on to Geneva, I love to quote Peter Lehmann, who always talks about a factor of four. I mentioned it before with the new buildings at Pont-Rouge.
We expect for office landscape, to move away from CBD to this new sub-center at Pont-Rouge, because it's just a great location. Why the factor of four? You will pay half the rent compared to the CBD district and have double the space available. You can have twice as much personnel there, which happened in Zurich. There's only a slight lag in Geneva, the CBD district will be subject to transformation and you will have a reasonable office space investment in the CBD district in Geneva and in Pont-Rouge. For the Basel market, we're convinced of the Basel market because it's special because of the chemical industry supporting that market. That is why we are investing in Basel. We're also investing in logistics properties.
It's not a huge segment for us, for city logistics, it's interesting and it's something that is not tackled by everyone. It is interesting. Last but not least, the question for retail space. Yes, it continues to be a challenge. This business we're set up very well with Jelmoli, we are aware that reasonable quality at cheap prices works, and what no longer works is the middle range. Eight of 12 months at sale doesn't work anymore. We're well equipped, I think, and we had a headache at A1 Center at Oftringen and Stücki Park in Basel. We launched modernization initiatives, and we're convinced that the new concepts will be successful. The new shopping center at Basel has been leased to the scope of 81%. It's going through modernization.
We're certain that once modernization is completed, it will be fully leased, and we will have done our job in due course. Much about the market, the way we see it, certainly a positive outlook, at least to the end of 2018, which is confirmed by expectations. This is more or less what we presented to you in February 2018. On the financial year of 2017, we expect top line growth, which is not worth much if there is no growth in EBIT before revaluations and tax. We will grow in terms of profitability, and we expect further growth on the portfolio by project realization or further acquisitions. Finally, about vacancy management. Those who compare it to the February presentation, there's a slight change. We forecast in February a vacancy below 5%.
We are already below 5%, and we asked ourselves, "What shall we say here?" I think we're talking about stabilization of the vacancy rate below 5% by the end of 2018. That's our forecast. Thank you very much. We are now open to answer your questions and our Chairman, as usual, Hans-Peter Wehrli, is going to guide you through the question and answer session.
Thank you very much for your presentations, dear colleagues. We'll be happy to take your questions.
Hello, I'm from Zürcher Kantonalbank. The first question to Mr. Wehrli. In the board, you have been looking at the strategic options for Tertianum. Maybe you could give us a little bit of an insight. We can't comment on that at the moment. The second question concerns Wincasa. Last year you mentioned that due to transaction fees being a little seasonal, somewhat seasonal, we were to expect more sales in the second half than in the first. Does that apply to this year, too?
It doesn't apply this year.
As I mentioned, or as Markus mentioned, we have a budget for Wincasa, and we're going to stay within it, but we are expecting a higher cost factor at the end, in the second half of this year, as Markus Meier mentioned. It is correct that the service business that looks into sales is seasonal, but that does not just affect the first or the second half of the year. It happens whenever it happens. We expected higher transactions last year. That's why we had those expenses. Thank you very much.
I have another question concerning Jelmoli. The first question is, how strong was sales growth in the men's section in terms of surface areas and retail space? Second question is, we keep hearing that the retail market is difficult, where you're trying to hold your ground by various measures which need to be supported with investments.
You have plans to expand in Circle. Do you think that this is the right strategy in terms of seeing the difficult environment? If yes, why? Circle is an idea that implies that we have one day that we have Sunday as opening. We often hear about the optimum size of operations, and that implies that you can generate economies of scale if you have the right structure. That is why the Circle is an interesting property, because it's close, it's well-known. People know what it can do or what it can offer. That is just good for our structure. It's a strategic challenge. We set conditions, and they have been met. Can I maybe just add to that, in addition to the advantages from our president, from our Chairman, we're also expecting different customer segment, additional customers who shop at the weekend.
It'll be interesting to watch that. This is 10% additional retail space in addition to what we had at the House of Brands. It's not like doubling the space, if we can still generate some economies of scale here, not just in the Circle, but also at the airport, particularly on the airside space, we will be able to have some spaces. This means that we have a much better bargaining or position with the large brands. It took quite a long time for large brands to be convinced to sell at the House of Brands. If we can also offer retail space at the airport, I think that will strengthen our position, our negotiating position. Thank you for the question. I think positioning is important, premium luxury or discount. Onto your question.
In men's and men's shoes, we have a two-digit growth over the last year and fewer sales spaces. With the ladies, we won't be able to generate two-digit growth, but we're hoping for one-digit growth. We're hoping for the entire property operations to be that successful. You have CHF 152 million in profits, there's some adjustments here. The reevaluation profit. How high are the deferred taxes on these profits? Calculating the earnings per share, that's what it's all about, is not the measure for the dividend payout. We calculate without reevaluation effects and all deferred taxes because both of these are non-cash items. If we just look at the CHF 35 million of reevaluation effects, you can say approximately CHF 10 million are deferred taxes. Thank you. Yeah, it's always about a third. Yep. Okay. Microphone borrow.
The microphone here, please. Thank you. I have two question. The first about the OVS effect. I think you're doing well filling your existing properties again. Can you give us an update? The second question on the changes in reevaluation for [fifth] from development projects. These are the largest projects that drive it, CHF 7 million in existing projects. Can you tell us how the subsegments of office and retail have been doing? Yes. We have approximately up to CHF 1 million in loss until the new tenants will start paying their rent. We already have new contracts for all of these spaces and, or are negotiating them. This CHF 1 million is going to be a one-time effect. We'll be able to proceed as before with even higher income as before.
These are 8 sites that OVS took with an annual volume of CHF 4 million in rental income. Okay. In revaluations, you could say that in particular, the triple A properties office spaces such as the Prime Tower, the Maaghof, and the properties in Zug and Bern were valuated with a slight decrease in discount rates, which led to a slightly higher valuation. Premium sites are still growing, also due to the rising demand. However, the shopping centers did not fare so well, mostly Stücki in Basel, that is just a marginal phenomenon for us because we are transforming it. We're doing well here. Out of 50,000 sq m in the old shopping center, we have already been able to rent out 40,000, that is 6 months ahead of opening. We're very optimistic here.
Valuation reductions were calculated on the shopping center in Oftringen in the first building. We're also transforming this, and Bauhaus is going to be the new tenant. We also have a slight valuation decrease in the shopping center in St. Gallen, even though, as Mr. Schäfer explained last year, they're doing well and have even shown some increases compared with last year. Thank you. Are there any more questions? Over here. Cantonal Bank. Cantonal Bank. On the Zukauf in Beethoven-Straße. The acquisition at Beethoven-Straße, this was quite expensive at low discount rates. What's the rationale for buying such prime locations, prime properties at such a relatively high price at this peak point in time? We have a clear idea of what our conditions are. We also have an idea that there are some properties that are just unique.
We believe that the location at the center of a town is always the best. You can always think about Zurich West or the surroundings, but the core business is at the core of the city, at the center of the city, and that's the same everywhere in the world, and that's the way it's going to stay. We have to decide what conditions we accept for buying these kinds of properties. There were discussions on the board, not just about this property. We do have these discussions, but there is a compulsive argument in favor of spending that money, and this is ideal to help us create a structure. It's not a complicated building. Peter? I would like to mention something concerning the peak that you just mentioned.
We spoke about the peaks 10 years ago and five years ago, and maybe in five years we'll have another peak. I've been working for this company for 12 years, and when I joined, there were seven people on the board. Today, we have 4,900 employees, and a banker said that the interest rate was rising, and it hasn't risen. Do you know what I'm saying? Of course, we should have control over the world, but we don't believe that this is a peak. We believe that there will be changes also in the residential sector, but we also believe that our focus is a good one. You can see that on page 16 or when you look at the Stücki. We have created a great deal of potential. Can I just pick up on that? You said that we're not at the peak.
It's not a peak for us. Now we have 3.3% in discount rates. As well, I don't think about discount rates. I think about the future. When I was a student, I was told by my sports teacher, he said, "You should learn languages. Being able to do numbers is more of a coincidence." That's maybe just to tell you that we shouldn't try to read the future too much. Maybe, Peter, you can say something about the future? No, I can't. We are dealing in scarce commodities, and prime sites are scarce commodities. There is only one center of town of Zurich, and there's only one St. Moritz. In all of those locations, prices have gone up over the last even 40 years. I dare say that this will probably continue in the future. That's one point of view.
The other formulation was the core city. There are elements that just are. If you look at Singapore, and the water levels rise, then a third of Singapore will be submerged. There are now companies in the world that are trying to work out what will happen, how much of the city will survive rising sea levels. We don't have to deal with rising sea levels, fortunately. I think our market is stable. Of course, we're cautious in terms of very expensive properties, but we have also have a clear idea of these developments. These developments are going to happen in the centers, not in St. Gallen, for example. Okay. Are there any more questions? In that case, I would like to thank you very much indeed for being here.
As always, we would like to invite you upstairs to join us upstairs for some snacks. We look forward to the second half of the year, very optimistic, as I said. I wouldn't say that we've earned the dividend yet, but we will earn it. I hope you still enjoy the summer with a little bit of a cooler night, hopefully.