Peach Property : Halbjahresbericht 2023 (Englisch) (23.08.2023, 7.2 MB)

Semi-annual report 2023

Growing with values

2 Semi-annual report 2023 of Peach Property Group AG

Key Figures

Peach Property Group AG is a real estate investor with an 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 letting 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)		Jun 30, 2023	Dec 31, 2022	Jun 30, 2022
Rental income	in EUR thousands	59 848	116 497	57 393
EPRA like-for-like rental income growth	in %	5.9	5.0	3.6
Funds from operations I (FFO I)	in EUR thousands	9 541	19 207	8 784
Result before taxes	in EUR thousands	-92 054	-19 967	61 166
Result after taxes	in EUR thousands	-76 125	-15 031	45 602
NAV IFRS	in EUR thousands	1 084 989	1 107 822	1 151 689
Equity ratio (IFRS)	in %	40.1	39.6	40.6
Real estate portfolio at market values	in EUR thousands	2 570 133	2 663 089	2 721 045
(incl. right-of-use assets) 1
Number of employees		232	233	219
Number of shares		20 740 918	16 882 373	16 882 373
Nominal value in CHF		1	30	30
Share capital	in EUR thousands	19 095	455 597	455 597
Diluted earnings per share	in EUR	-3.60	-0.97	2.45
Diluted FFO I per share	in EUR	0.47	1.14	0.52
NAV IFRS per share 2	in EUR	48.62	60.17	62.62
EPRA NTA per share	in EUR	51.88	64.88	69.82
Share price	in CHF	13.28	16.40	35.35
Market capitalization 3	in CHF thousands	275 429	276 688	596 397

1. NAV market value based on the independent appraisal of Wüest Partner incl. assets held for sale.
2. Excluding hybrid capital and non-controlling interests.
3. Excluding treasury shares.

Semi-annual report 2023 of Peach Property Group AG

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Content

Peach Property Group - Growing with values	2
Editorial	4
Portfolio	7
Investor information	15
Consolidated semi-annual financial statements	21
Consolidated statement of income for the period	22
Consolidated statement of comprehensive income....	23
Consolidated statement of financial position	24
Consolidated statement of cash flows	26
Consolidated statement of changes	28
in shareholders' equity

Notes to the consolidated semi-annual	32
financial statements
Review Report of the auditor on the consolidated	55
semi-annual financial statements
EPRA-Reporting	56
Contact / Events / Imprint	65

In the medium term, we will focus more on modernizing our property portfolio and progress on our decarbonization path. In doing so, we will play an active role in the real estate sector repositioning itself as ESG compliant.

4 Semi-annual report 2023 of Peach Property Group AG

Editorial

Dear shareholder,

The first half-year of 2023 was characterized by a continuation of rising interest and inflation rates, and unprecedented construction material price increases across the entire real estate sector. The operations of Peach Property Group were equally impacted by the prevailing macroeconomic challenges in the German real estate market, as is temporarily visible from our results

for the first half-year of 2023. Our robust business model of providing affordable housing in German Tier II locations means we supply a highly sought-after product to a market with strong and continuous demand. Higher borrowing costs resulted in an increased focus on our capital structure in order to rebalance our mix of debt and equity to the changed interest rate environment. In this regard, a mandatory convertible bond was issued in January 2023 that was fully converted into shares of the Company in April 2023. Addition- ally, a convertible bond was issued

in May 2023. Operationally, we reduced other operating expenses. A tenant-focused service approach and efficiency in asset management practices represent our DNA. Therefore, we see ourselves well positioned in the market, also in challenging times.

In the medium term, we will focus more on modernizing our property portfolio and progress on our decarbonization path. In doing so, we will play an active role in the real estate sector repositioning itself as ESG compliant.

Continued high demand for affordable housing: increased rental income, stable vacancy development, increase in FFO I

Total rental income increased compared to the previous period due to rental charge adjustments backed by continued strong demand for affordable housing in the German residential real estate market. Rental income after collection losses increased to EUR 59.8 million, following EUR 57.4 million in the previous period. The vacancy rate

decreased to 7.2 percent as of June 30, 2023, following

7.6 percent as of June 30, 2022. Compared to December 31, 2022, the vacancy rate increased by 0.3 percent, with the number of units entering the renovation phase before re-letting increasing with a similar number. FFO I increased by approximately 9 percent compared to the previous pe- riod, to EUR 9.5 million.

The continuous rise in borrowing costs and high inflation rates created uncertainties in the German real estate market which resulted in real estate prices falling fur- ther. These factors also impacted the valuation of our property portfolio, where we recorded a non-cash devaluation charge of around EUR 98 million, or 3.8 percent of the portfolio value during the first half-year of 2023.

The total value of our real estate portfolio was around EUR 2.5 billion as of June 30, 2023, following EUR 2.6 billion as of December 31,

2022. The operating result was EUR -70.2 million, following EUR 101.0 million for the comparative period. The result before taxes was EUR -92.1 million, following EUR 61.2 million for the first half-year of 2022.

Successful refinancing of the first Euro bond, issuance of a convertible bond, cost efficiency and reduced other operating expenses

We focused on our capital structure and the related financing and capital costs during the first half-year of 2023, to rebalance our mix in line with the significantly changed interest rate environment. In January 2023, we issued a mandatory convertible bond with a nominal value of CHF 112.4 million (EUR 113.9 million). We repaid a Euro bond due in February 2023 early at the end of January 2023 with the proceeds from the mandatory convertible bond. In order to strengthen our equity mix, we issued an additional convertible bond of CHF 50 million (EUR 51.1 million) and an interest coupon of 3.0 percent p.a. in May 2023. Our equity ratio was 40.1 per-

Semi-annual report 2023 of Peach Property Group AG

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Reto Garzetti	Thorsten Arsan
Executive Chairman of the Board of Directors	Chief Financial Officer

cent as of June 30, 2023, following 39.6 percent as of December 31, 2022. Although the LTV ratio was, at 55.0 percent as of June 30, 2023, slightly higher than the 54.7 percent as of December 31, 2022, we remain committed to reducing the LTV ratio in the medium term.

Other operating expenses decreased by more than 15 percent in the first half-year of 2023 compared to the previous period, showcasing our efficiency gains. Over- all, the adjusted EBITDA margin improved by around 3.7 percent compared to the previous period to 53.7 percent.

Focus on digitalization, improved service delivery to tenants and high tenant satisfaction

In the first half-year of 2023, we achieved a strong tenant satisfaction rate of more than 79 percent across all tenant feedback received through our digital ticketing platform. We successfully closed over 81 545 tickets in the first half- year of 2023, with the majority of the reported matters closed with the first interaction leading to a "one-touch rate" of 91.7 percent. Our digital ticketing platform enables

us to resolve tenant matters such as a damage reports in a timely and effective manner. We launched our digital rental agreement project in 2022 and rolled out the digitalized functionality in the first half-year of 2023. This innovation promotes more efficient handling between us and new tenants and increases flexibility as tenants can newly sign rental agreements online, without time or location con- straints. This innovation decreases the time required to let vacant apartments while the efficiency gains translate into cost savings.

Progress on ESG strategy, focus on modernization measures, high political relevance of energetically renovated apartments

Higher construction and financing costs resulted in a lower capital expenditure budget for the first half-year of 2023. Despite a significantly lower budget, we continued to modernize our properties with a focus on less capital-intensive measures that will still generate significant energy savings. Among other things, we launched a project to expand the smart meter infrastructure in our