Ladies and gentlemen, welcome to our media conference today. You will remember half a year ago, we had buses stuck in the snow. And today, it's hot. It's hot in the buses. And I thought why not move financial year by half a year to give us better weather for the media conferences.
So we're here today to talk about a successful semiannual closure of financial figures. Rene Zand is here. Markus Mayer is here. Oliver Hoffmann cannot be here. All the other gentlemen from the subsidiaries, the Cornerstone subsidiaries are here.
And let's begin with the highlights. Over to Rene Zandt. 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 and then more detail, in particular, about the Real Estate core business. Let's begin with the real estate portfolio, an increase in 5.4 percent to €10,800,000,000 €1,000,000,000 has to be achieved in the 1st place. If you take the difference to the first half twenty seventeen and then deduct revaluation to the tune of around €63,000,000 We have €500,000,000 left that we generated in terms of growth, be it by acquisitions or project developments or realization and completion of building projects. Operating income growth of 10.3 percent to €585,000,000 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 EUR 241,000,000 and EBIT is up 7.9 percent to EUR 233,000,000. Moving on to profit. There's an increase of 15.4%. This is profit without revaluations of deferred taxes, profit of €151,000,000 And let's move to the bottom. Of course, profit is decisive for distribution to the shareholders.
So this profit gives us a current state of CHF2.11 of earnings per share, CHF2.11. Let me remind you that last year's dividend for 2017 was at CHF3.80. Then equity ratio, there's a slight decrease down to 41.2%, and the NESAT asset value rose by 1% to now CHF65.25. 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 square meters of space. 100,000 square meters. Well, prime tower is always the reference point. It's 2.5x the surface of the reference of the prime tower. And in terms of francs, what does it mean in terms of francs?
It's €21,500,000 of rental income that we have secured again. Moving on to acquisitions on the investment property and check the slides. We've got the Isaly site at Reagan's store from the one hand and however, not relevant to the first half year of twenty eighteen yet as closing is only occurred in July 2018 is the office building of the Beethovenstrasse in Zurich fully leased. Then we've got acquisitions in the project development pipeline. 1 of them is a lot in Monte, which is fully leased.
Terjeannen will be the tenant. Monte is in the Canton of Valais. And the other one is acquisition of the Westlog project in Zurich, Alsteten completed by 2020. There will be an additional rental income of around €10,000,000 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 Weltos Park to Allianz Suisse.
With all the confirmations coming in before the end of June. So part of it went into the first half financial figures. Then construction process at Stuckey, for instance, be coming back to this and we have the foundation stone laid for Espasturb, beyond Clarnier, I'm topping out ceremony at the at Yond in Zurich just before the summer break. For the acquisitions here, we've got 2 appealing ones, the Isaly on the right hand side, the Dragonsdorf, 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.
And on the left hand side, we've got the acquisition of Beethovenstrasse 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. And all this means that this cannot only be let to different tenants, but it 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. Westlog at Zurich Alstatten, it's pre leased to the tune of 85%. It's a logistics building, a city logistics buildings. 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. And from those locations, fine distribution, fine tuned distribution will be made to the city centers. We will see it on the yield. We booked it as a project. We didn't develop it ourselves.
It was a fully developed project we bought from Implania, but we couldn't show it under investment properties because it's not even built yet. So it's a hybrid really and I'll be coming back when talking about the figures. And on the right hand side, we've got a project acquisition on behalf of Taussi Arnhem, a new residential care center at Monte 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 Side Solutions and Swiss Prime Side as far as which portfolio the Tarsionum buildings go. When there is more surface for care, care to be considered a service, then it's the Swiss private side and if there are more apartments, then it's residential living and it's a project for the investment foundation.
Now project sales, I won't talk about bluntly what the 2 sales we had to Huntsville store foundation last year. I won't dwell on that anymore. But 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 residential building.
Well, 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 €35,000,000 which is more or less in line with the €37,400,000,000 last year. 4 5ths of this is due to development properties and 1 5th on the investment properties. And you can also see that net property yield was held at 3.7%, although we carried out acquisitions or developments of construction to the tune of 500,000,000, the vacancy rate is currently 4.7 percent, very appealing compared to 5.2% at least, which we posted at the end of last year.
Now moving on to details for buildings under construction. When you can see Anzet site 1, and this is Anzet site 2 at Schlieren. So 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. And when you see Stuckey Park 1 and 2 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, the 4 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 €2,000,000,000 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 now 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 4,753 for in development.
Those who follow the charts will see that the real differences to the last presentation clear that's very clear because we are not building the same projects. We're not having the same projects in development. So we are trying to update this slide all the time. Question that always arises is why are you lowering development question of how you can actually at what level you can actually carry out construction. So net yield, once the projects will be moved from development to under construction, will be increased.
Now 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, €92,000,000 that we're showing already. And 4th, it's interesting because parts of the developments can be sold as we did in Poulan Euwate and the Welpost Park in Bern to realize additional gains. And 5th, the development business is interesting for reevaluation.
And 6th, and last but not least, development skills are crucial for modernizing the properties on the portfolio and for lowering the vacancy rate. Now for the projects sold at the bottom here, you are familiar with the figure. We are expecting from the 2 sales of project, the 2 buildings of the possible 5 buildings in the Espaas II, beyond Bell Postbank, around €100,000,000 of pretax profit in the years 2017 to 2021. And 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 4 finger docks we talked about. Investment volume of total of €188,000,000 And at the same time, we are modernizing the earlier shopping, Schuylkill Shopping Center. We are creating 1700 workplaces in a segment that we can only build in Basel more or less. It's a combination of office and lab space, and 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 buildings under Espaustour beyond.
This is no office space, but commercial space. And then 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 so we can switch between commercial and services purposes without having to reapply. And finally, the Port Rouge project at an interesting place, interesting location.
We worked on the surfaces and on the ground plans. And 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. And before submitting the project to the future, a provider will erect it.
So much on our core business and we always show the this slide on the services segment, let me just focus on the highlights. First of all, Wincarcer highlights certainly is the €67,000,000,000 assets under management, a new record high. And 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 Rotertum in Wintertow. 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.
And the CVC is to handle routine questions. So much on Wincasa, you will have seen in EBIT and that the figure is in line with our expectations. So 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 decrease in footfall, which is usually occurs in the first half year. Jelmauli has its best period of business from September to December. That will be the crucial 4 months. So we're convinced that we will be within our budget by the end of the year. And 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. Then Tercianum, successful introduction of the SAP system in the German and Italian speaking parts in Switzerland and it will be introduced from 2020 in the French speaking part of Switzerland. We are now active in 77 sites, 3 1,050 beds in apartments, 1800 apartments, which of course requires a great deal of personnel.
But it's an interesting business and 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 4 new Tocionum businesses last year. This is ramp up costs 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. And if you have more days to calculate your services for, then you'll end up with higher figures.
And last but not least, Swiss Prime Size Solutions, CHF 1,500,000,000 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 these services part. We hired a seasoned executive, and it will be for the investment foundation to announce who it is, and you will then receive the name in due course. And in the Services segment, we had an increase in operating income of 7.2% and an increase of 15.5% on EBIT now.
Let me hand over to our CFO, Marcus, 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. Terceania has grown strongly due to the projects that we have and implementation of new operations.
Wind cars is above the previous year due to higher management fees, construction management fees. And Yalmalie has certainly been weathering the difficult market environment and is still at the same level as last year in terms of sales. And finally, Asset Management Solutions is also above the previous year. So let's start with rental income at group level, which have risen by 4.2% to just over CHF 240,000,000. As you can see here, at the center, we have the sales and finished projects.
A total of £6,300,000 come from that area. That's very positive. These are the easily site, the development site, which is already generating yields and the acquisition in winter Tour of the end of last year of Meander, that's on the quarter tour side. We've been able to bring all the red bricks together and bring together what should be together. And the developments that are responsible for the increases of finished projects are, in particular, Motel 1 in Zurich and the mixed property, Uyen Poisson in Meran, near Geneva and project on assisted living at the project Eitelgud in Wallischofen.
In terms of changes to various existing properties, like for like added up to CHF 3,500,000,000. This is, on the one hand, due to the increased rents the improved rental contracts for offices, Orbos at the Zug train station at the Stukke 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. CHF3,500,000 also included some burdens in terms of retail space rental, shopping center A1 in Offeringen, which we are deconstructing to realign it as a specialist retailer, which was the original intention of the project anyway. So it is now totally vacant.
And in the second half of twenty eighteen, 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. So on average, our level has been stable in terms of retail space rental. We took one we lost CHF 1,800,000 from rented property in assisted living segment.
This is mainly due to the refurbishment of the former Stuki Shopping Center, where 20,000 are, at the moment, unusable and not rentable. And this, of course, is a loss. And CHF 1,800,000 increase from rented properties in the assisted living segment, Tertionum has certainly boosted our growth rates here. And 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.
And as far as services are concerned, you can see, again, 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 2 properties at the Plant Duarte site in Geneva in the second half of twenty seventeen. And so these sales were not recorded until the second half of the year twenty seventeen. Accordingly, we also saw growth in terms of rents and lower vacancy rates.
As far as services, growth is present, CHF 27,000,000 CHF 25,000,000 CHF 7%, mainly comes from assisted living, and that's CHF 18,000,000. And these are additional sales growth and CHF 2,000,000 additional in rental income. And the remaining CHF 5,000,000 is increased income from the area of real estate services, Wincarza and Innovares 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: Tertionum, 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 for new operations are currently in ramp up. And that means that the cost base in terms of staff, depreciation is already ongoing, but we're still waiting for these sales to come up to speed. So this is an over proportional cost share, which is going to normalize again once the whole thing is up and running. Munkaza has a very strong EBIT rise compared with last year. And let me just say that in the second half of the year of twenty eighteen, we're expecting slightly higher cost base due to investments in IT Services.
In at the Elmore, 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 segments 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 1st 6 months. But 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. Now 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, €35,000,000 at previous year's level. Once again, the distribution is very one-sided here in terms of prime sites.
And I'd say the 10 major positive value adjustments added up to CHF 50,000,000, and these include sites such as the prime tower, where we are now the office buildings in Bern, Esbach 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 Espaste Tourbillon Geneva. There are 3 buildings that we still own. 2 have been sold, and 3 were retained, and they were able to achieve a revaluation gain.
The average real discount rate fell by 5 basis points at the end of 2017 to 3.3%. This corresponds to a nominal discount rate of 3.82%. The successful sale of investment properties, €6,300,000 is difficult to compare to last year. This is the first phase of the sale of a Bernd property, the Welpost 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. And in future, we are still going to continue construction. And until the projected completion in 2020, we are going to have sales in line with the construction process. Operating expenses went up considerably by CHF18 million from property developments. And 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. Compared on the 13th June 2017, we had 4,600 full time equivalents compared with 4,900 full time equivalents this year. The financial expenditure the financial expenditure was reduced once again. 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. And then tax rates, tax expenditure also rose due to the sales of properties in Geneva, which are subject to higher tax than the remaining business, which all leads to a profit of CHF152,000,000 before revaluation effects and all deferred taxes.
So the cash is So this shows that the property portfolio rose to CHF186 1,000,000 or 1.8 percent. And this was mainly from investments, 85 percent, in fact, around onethree from acquisitions and twothree from investments in existing properties and real estate projects. And this, of course, also includes the revaluation effects. Investments in reconstructions, modernization and projects have generated an increase of almost CHF 80,000,000 such as Schonburg and Bern. These are rental apartments with hotels and retail space in prime location in Bern.
And the Tourbillon Plondez Wates projects are 3 properties that are already under construction. Acquisitions, here, Regenstaffe, the Isola project stands out and the new logistics projects in Zurich West and an additional project in Monte. Investments in existing properties were CHF 60,000,000 net. And here, we should mention the prime properties in Zurich, Geneva, Bern and Zug as well as the mall at the Istuku Business Parks. We also sold a project, including the land, the project with Forsbergenbeeren and also relatively small office units.
Now 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 1,000,000,000 with an equity ratio of 41%. Financing structure, we are going to continue to use seize opportunities in these markets as we did at the beginning of this year where we issued a 7 year convertible bond of CHF 300,000,000 with a 0.3 25% coupon. And 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 registered share. So that's a very attractive option for us, which we can use in order to meet our needs.
Also, in July, we took the opportunity offered by the market to issue a 6 year straight bond of CHF 115,000,000 with a 1% coupon. This results in a reduced interest rate of 1.4% and average maturity of 4.4% interest rate by volume. And so these are the financing figures. And I would now like to hand over back to Rene Sandd.
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 heard that Legg's collar will not be reinforced.
In the extreme case, it would have been impossible for foreign shareholders to invest in real estate companies. And 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. But 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.
So it has reduced by almost half. And 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. It will no longer 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 in 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. And 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 in to 2019. And 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 Side Solutions is as a asset management service provider and for the Swiss Prime Investment Foundation. And you will all have read that there's too much construction, too much construction in the wrong places. And add to this that if investors don't know what to build, they'll build 3.5 room apartments across Switzerland. So 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 my 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. And if you have to build more households, you need to build more apartments, but not only 3.5 room apartments, you have to have perfect knowledge of demand and 3.5 rooms will be too expensive for many singles households.
For instance, you will need more smaller apartments and so much on the residential segment. Moving on to office, 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 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 Andreas Tower at the Erlikon station.
The circle will be completed by 2020. And this will have a positive effect in Ielmoli if we can move in there and the circle will also offer office space. And I'm convinced that at the end of the day, it will all be leased because after all, it's the airport. So as a result, the office landscape there will be split between the airport and the Oerlikon station location, everything in between such as Ophicom, Glut. The Glut Centrum will be in a more difficult situation, but it's positive for Zurich.
Moving on to Geneva. And I love to quote Peter Lehmann, who always talks about a factor of 4. I mentioned it before with the new buildings at Bon Rouge, we expect for office landscape moving to move away from CBD to this new subcenter at Pont Rouge because it's just a great location and why the factor of 4, 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.
So 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 Bonn Rouge. Now 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, but for City Logistics it's interesting and it's something that is not tackled by everyone.
So it is interesting. And last but not least, the question for retail space. Well, yes, it continues to be a challenge. This business, we are set up very well with the El Moli and we know that we are aware that reasonable quality at cheap prices works and what no longer works is the middle range and 8 of 12 months at sale doesn't work anymore. So we're well equipped, I think.
And we have a headache at A1 Center at Ofstringen and Stuckey Park in Basel, but 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% is going through modernization. We are certain that once modernization is completed, it will be fully leased and we will have done our job in due course. So 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. And we will grow in terms of profitability and we expect further growth on the portfolio by project realization or further acquisitions. And finally, about vacancy management, those who compare it to the February presentation, there's a slight change. We forecast in February 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 Wehle, is going to guide you through the question and answer session.
Thank you very much for your presentations, dear colleagues. And now we'll be happy to take your questions. Hello. I'm from Zuget Kanten Ibank. The first question to Mr.
Vieli. In the board, you have been looking at the strategic options for Tesiorum. Maybe you could give us a little bit of an insight. We can't comment on that at the moment. And the second question concerns Vincasa.
I think last year you mentioned that due to transaction fees being a little seasonal somewhat seasonal, you were to we were to expect more sales in the second half than in the first. Does that apply to this year, too? No, it doesn't apply this year. As I mentioned as Max 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 Mayer 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. But we expected higher transactions last year. That's why we had those expenses. I have another question concerning Elmerly.
The first question is how strong was sales growth in the men's section in terms of surface areas and retail space? And 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. But you have plans to expand in a circle. Do you think that this is the right strategy in terms of the seeing the difficult environment? And if yes, why?
Well, circle is an idea that implies that we have one day that we have Sunday 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. And 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. And that is just good for our structure.
So 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 are also expecting a different customer segment, additional customers who shop at the weekend. It'll be interesting to watch that.
And
so this is 10% additional retail space in addition to what we had at the House of Friend. It's not like doubling the space, but if we can still generate some economies of scale here and not just in the circle, but also at the airport, particularly on the air side space, we will be able to have some spaces. And 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. And if we can also offer retail space at the airport, and I think that will strengthen our position, our negotiating position.
So thank you for the question. I think positioning is important, premiumluxury discount. Now on to your question in men's and men's shoes, we have a 2 digit growth over the last year and fewer sales phases. But with the ladies, we won't be able to generate 2 digit growth, but we hope we're hoping for 1 digit growth. And we're hoping for the entire property to operations to be that successful.
Now you have EUR 152,000,000 in profits, and so there's some adjustments here. The revaluation profit, so how high are the deferred taxes on these profits? Well, calculating the earnings per share, and that's what it's all about, is not the measure for the dividend payout. We calculate without revaluation effects and all deferred taxes because both of these are noncash items. And if we just look at the just at the CHF 35,000,000 of revaluation effects, you can say approximately CHF 10,000,000 are deferred taxes.
Thank you. It's always about onethree. Over the microphone here, please. I have two questions. The first about the MS effect.
I think you're doing well filling your existing properties again. Can you give us an update? And then the second question on the changes in revaluation for 5th from development projects. So these are the largest projects that drive it and €7,000,000 in existing projects. Can you tell us how the subsegments of office and retail have been doing?
Well, yes, we have approximately up to €1,000,000 in loss until the new tenants will start paying their rent. We already have contracts, new contracts for all of these spaces and or are negotiating them. So this is going to be this million is going to be a onetime effect. And then we'll be able
to
proceed as before with even higher income as before. These are 8 sites that OBS took with an annual volume of €4,000,000 in rental income. In revaluations, you could say that, in particular, the AAA properties, office spaces such as the prime tower, the Maghof and the properties in Zug and Bern. Were evaluated with a slight decrease in discount rates, which led to a slightly higher valuation. So premium sites are still growing also due to the rising demand.
However, the shopping centers did not fare so well, mostly Schuky and Baase. But that is just a marginal phenomenon for us because we are transforming it. And so we're doing well here. Out of 50,000 square meters in the old shopping center, we have already been able to rent out 40,000.
And
that is 6 months ahead of opening. So we're very optimistic here. Also, valuation reductions were calculated on the shopping center in Offlingen in the first building, but we're also transforming this. And Bauhaus is going to be the new tenant. And we also have a slight valuation decrease in the shopping center in St.
Gallen, even though as Mr. Schafer 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.
Canton On the Zukaufen in Beethovenstrasse, the acquisition of Beethovenstrasse, this was quite expensive at a low discount rate. So what's the rationale for buying such prime locations, prime properties at such a relatively high price at this peak point in time? Well, we have a clear idea of what our conditions are, But we also have an idea that there are some properties that are just unique. And we believe that the location at the center of a town is always the best. You can always think about Zurich West or 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. And so we have to decide what conditions we except for buying these kinds of properties. And there were discussions on the Board, not just about this property. So we do have these discussions, but there is a compulsive argument in favor of spending that money. And this is an ideal to help us create a structure.
It's not a complicated building. Peter? Maybe just something I would like to mention something concerning the peak that you just mentioned. Well, we spoke about the peaks 10 years ago and 5 years ago. And maybe in 5 years, we'll have another peak.
Well, I've been working for this company for 12 years. And when I joined, there were 7 people on the Board today. And today, we have 4,900 employees. And a banker said that the interest rate was rising, and it hasn't risen. So 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 Stuki, we have created a great deal of potential. Can I just pick up on that? Who said that we're not at the peak?
Well, it's not a peak for us. So now we have 3.3% in discount rates. And as well, I don't think about discount rates. I think about the future. So 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. But that's maybe just to tell you that we shouldn't try to read the future too much. But maybe, Peter, you can say something about the future? No, I can't. But this we have 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. And in all of those locations, prices have gone up over the last even 40 years. And I dare say that this will probably continue in the future.
That's one point of view. And the other formulation was the core city. There are elements that just Well, if you look at Singapore and the water levels rise, then a third of Singapore will be submerged. But so 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. But we don't have to deal with rising sea levels, fortunately.
And so I think our market is stable. And of course, we're cautious in terms of very expensive properties, but we have also have a clear idea of these developments. And these developments are going to happen in the centers, not in Vilnius and Gallen, for example. Are there any more questions? In that case, I would like to thank you very much indeed for being here.
And as always, we'd 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. And so I hope you still enjoy the summer with a little bit of a cooler night hopefully.