Annual Report 2020
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Growing with values. Annual Report 2020 peachproperty.com 2 Annual Report 2020 of Peach Property Group AG Key Figures Peach Property Group AG is a real estate investor with its investment focus on residential real estate in Germany. Our tenants are at the center of our activities. With innovative solutions for modern living needs, we offer clear added value. Our portfolio comprises high yielding investment properties, typically in German Tier II cities in the commuter belt of metropolitan areas. In addition, we are developing selected projects to be sold as condominiums. Our services span the entire value chain, from location evaluation and acquisition to active asset management and the rental or sale of our properties. We have our registered office in Zurich; our German headquarters are based in Cologne. The shares of Peach Property Group AG are listed on the SIX Swiss Exchange. Peach Property Group (consolidated) Dec 31, 2020 Dec 31, 2019 Operating income in CHF thousands 213 584 160 734 EPRA like-for like rental income in % 4.7 4.5 Operating result in CHF thousands 178 563 129 827 Result before tax in CHF thousands 153 354 109 675 Result after tax in CHF thousands 127 282 91 004 NAV IFRS in CHF thousands 754 862 389 564 NAV Market Value in CHF thousands 762 459 401 298 Equity ratio (IFRS) in % 33.9 32.3 Equity ratio (NAV market value) 1 in % 34.2 32.9 Real estate portfolio at market values (incl. right-of-use assets) 1 in CHF thousands 2 112 450 1 130 696 Number of FTEs 119 78 Number of shares (nominal value of CHF 1.00 each) 12 494 751 6 601 474 Share capital in CHF thousands 12 495 6 601 Diluted earnings per share in CHF 14.30 12.06 Diluted FFO II per share 2 in CHF 0.60 -0.35 NAV IFRS per share 3 in CHF 50.70 43.34 NAV market value per share 1,3 in CHF 51.31 45.11 EPRA NTA per share in CHF 57.29 50.63 Share price as of December 31 in CHF 46.00 39.50 Market capitalization as of 31 December 4 in CHF thousands 574 497 260 719 1 NAV market value based on the independent appraisal of Wüest Partner incl. assets held for sale. 2 Excluding the dilutive effect in the current and previous year. 3 Excluding hybrid capital and non-controlling interests. 4 Excluding treasury shares. 3 Content Editorial 4 Business Model 8 Milestones 2020 – Focus on digitalization 10 Milestones 2011 - 2020 12 Sustainability Report 15 Highlights 2020 27 Portfolio 28 Interview with Management Team 34 Investor information 37 Corporate Governance and Remuneration Report 45 Section 1 - Corporate Governance 46 Section 2 - Remuneration Report 64 Report of the statutory auditor on the remuneration report 72 Consolidated financial statements 75 Consolidated statement of income 76 Consolidated statement of comprehensive income 77 Consolidated statement of financial position 78 Consolidated statement of cash flows 80 Consolidated statement of changes in shareholders’ equity 82 Notes to the consolidated financial statements 86 Report of the Statutory Auditor on the Consolidated Financial Statements 147 Report by the independent appraisal expert 152 EPRA Reporting 156 Individual financial statements 165 Statement of financial position 166 Statement of income 168 Notes to the financial statements 169 Proposed appropriation of retained earnings 181 Report of the Statutory Auditor on the Financial Statements 182 Contact / Events / Imprint 187 4 Annual Report 2020 of Peach Property Group AG Reto A. Garzetti Dr. Thomas Wolfensberger Chairman of the Board of Directors Chief Executive Officer Dear shareholder, Due to the prevailing extraordinary circumstances, 2020 CHF 127.3 million speaks for itself. We maintained the suc- proved to be challenging for all of us, yet it was a very cessful trends of recent years while accelerating momen- successful year for Peach Property Group AG from a bu- tum. Against this backdrop and with an additional, active, siness standpoint. We consistently implemented our stra- and strong anchor shareholder at our side, we believe we tegy as a highly digitized, tenant-centric, and high-growth are ideally positioned for our next growth steps. real estate Group, achieving record business results in the process. A 40 percent increase in profit after tax to Digital platform as success factor Our digital platform has once again proven its efficiency. mented SAP S/4HANA in the Group, a uniform and integ- During this financial year, we acquired around 10 800 new rated system for rental accounting, financial accounting, apartments in Germany and integrated them smoothly. and CAPEX management. We further increased our ad- By expanding our residential portfolio by 87 percent to ded value with continued insourcing. In 2020, Peach Pro- 23 200 units, while overhead costs rose by only 14 percent, perty Group has thus once again demonstrated, under we converted economies of scale into an above-average extraordinary circumstances, that digitalization, increased contribution to earnings. Accordingly, we further impro- efficiency, and tenant-oriented actions can be a fruitful ved our operating margin from around 73 percent to 75 symbiosis in the German real estate industry. percent. During the financial year, we successfully imple- Editorial 5 Portfolio expanded to a market value over CHF 2 billion – vacancy rate down despite COVID-19 As planned, we dynamically increased our residential port- In line with our strategy, the focus of Peach Property folio over the financial year. As a result of two large-volu- Group‘s growth in 2020 was on locations where we alrea- me acquisitions, we expanded our total floor space by 82 dy had a presence. We formed clusters, leveraged syner- percent to around 1.5 million square meters. At just under gies, and generated economies of scale. The new portfo- CHF 2.1 billion, the market value of our real estate portfo- lios are located primarily in the Rhine-Ruhr metropolitan lio as of December 31, 2020 was 86.3 percent higher than region. We were able to significantly expand our number one year before. As a result, we were able to achieve our of residential units in the Kaiserslautern area as well. medium-term goals of portfolio value and the number of residential units, which we set only during the year, alrea- Our portfolio generated net rental income of CHF 54.7 dy by the end of the year. We did not need to compromise million in 2020, an increase of 40.7 percent over the on our return targets even in the context of accelerated same period last year. The residential units acquired over growth, as illustrated by a gross return of 5.0 percent, the course of the year contributed to the increase, as did very attractive by industry standards. Our portfolio volu- prudent rent increases, aligning with market levels and a mes allowed us to reach new levels of attention among reduction in vacancies. On a like-for-like basis, our ren- investors and transaction partners and allowed us access tal income grew by 4.7 percent. Despite the COVID-19 to international investors. Against this backdrop, we are pandemic we reduced vacancies by about a quarter, from also reporting selected key figures according to the EPRA 9.3 percent at the end of 2019 to 7.0 percent at the end of standard for the first time for the 2020 financial year. 2020, by means of active asset management and inten- sive leasing activities, many of them digital. The portfolios newly acquired at the end of the year had an average va- cancy rate of 8.6 percent at the time of acquisition. Financial figures once again significantly improved In addition to the aforementioned increase in our net Group. At the same time, we almost doubled our equity profit, we were able to significantly improve our result to CHF 754.9 million within 12 months and further increa- before tax by 39.8 percent to CHF 153.4 million. At CHF sed our equity ratio at market values from 32.9 percent to 0.59 per share, FFO I was significantly higher than the over 34 percent – despite the significant increase in total negative figure for the previous year. The NAV per share assets. As announced, we have further reduced our leve- at market values of CHF 51.31, an increase of around 14 rage and, with an LTV of 57.8 percent (previous year 59.6 percent compared to the previous year, also illustrates the percent), we are on course to further improve our rating. value-creating business development of Peach Property 6 Annual Report 2020 of Peach Property Group AG Additional major shareholder and strong financial basis accompany growth As in previous years, we have built our growth on a tion joined the company as a new anchor shareholder, solid financial basis with a balanced mix of equity with a stake of around 30 percent. The Extraordinary and debt, attracting strong interest from internatio- General Meeting also elected Klaus Schmitz, Managing nal investors. In addition to issuing an unsecured Euro Director of Ares Real Estate Group, to the Board of Di- corporate bond of EUR 300 million, we successfully rectors of Peach Property Group AG. With this financial- carried out a capital increase through the issuance of a ly strong and extremely well-connected partner by our mandatory convertible bond for CHF 230 million. In this side, we are optimally positioned for further growth. context, the global investor Ares Management Corpora- Sustainable focus and tenant-centered philosophy We see our focus on the needs of our tenants and sustain- sive multi-channeled tenant communication: a personal able management as important prerequisites for success visit to one of our Points, telephone, email, WhatsApp, that will last for many decades and years.