Continued growth and sustainable added value

With EBITDA of CHF 44.5 million (2018: CHF 40.8 million), Division Development achieved a very good result for 2019. In addition, land in attractive locations was purchased for a total of CHF 53.2 million. The intended spin-off of half of Implenia's development portfolio should deliver attractive added value for existing shareholders and for Implenia.

Improved performance

The 2019 result is heavily influenced by the successful sale of the development project KIM inno-living to life insurance company Swiss Life. This development of over 200 residential units is built of solid wood in accordance with the highest sustainability standards. In addition, we sold numerous other owner-occupied residential projects in the Zurich region (including Lokstadt’s project “Krokodil”and project “sue &til”, both in Winterthur), as well as in Fribourg, Geneva and Ticino. The market for owner-occupied homes remains very stable thanks to a continuing favourable interest rate environment and attractive products. Owner-occupied residential property remains a central pillar of the Division’s business.

“Based on our strong position as an innovative and integrated property developer, we are ready for the next important step, the planned spin-off, which will generate added value for our shareholders and for Implenia.”

Adrian Wyss
Head Division Development

In terms of land acquisitions, we were able to grow our portfolio by around CHF 53.2 million. This increase included the cancellation of a buyback option in Unterfeld Baar, a plot in Suhr, an existing property with further potential for development in Zurich, and a large site in Kloten.

We started to grow our development business in the German market in 2019, building up a team in Frankfurt and making some initial acquisitions. We came first in an investor/designcompetition for the 30,000 m2 Marienplatz project in Darmstadt, for example, making this our first project success in Germany.

 

Crystallisation of the development portfolio’s value

Experience has shown that we operate with a successful business model in Division Development: the yields are attractive, and promising projects in outstanding locations are driving demand. From this position of strength we have decided to transfer half of our attractive development portfolio, with a current market value of around CHF 300 million, into a new real estate company. This will create an interesting investment opportunity for our shareholders. It also allows us to extend our value chain for the long term and expand our real estate development business.

To do this we plan to found a new company, Ina Invest Ltd., in which Implenia Ltd. will participate as a significant minority shareholder. The parent company, Ina Invest Holding Ltd., will be listed. With its real estate services unit, Implenia will offer project, portfolio and asset management services to Ina Invest. This extension of the value chain will allow us to generate continuous earnings in the medium term instead of selling ready to build and approved development projects as we have done previously. At the same time, we will continue to apply our traditional business model to Implenia’s remaining development portfolio as a classic property development company. This portfolio remains attractive.

Return on invested capital

in %

28.4(2018: 26.3)

Further increase in profitability.

Sold homes

as at 31.12.

364(2018: 289)

Successful sales, especially of one major project and of owner-occupied homes in the Zurich region.

Homes in development

as at 31.12.

2,873(2018: 4,191)

Decrease due to successful completion and sale of projects.

Mitarbeitende

Employees (FTE)

as at 31.12.

76(2018: 64)

The new development team in Germany gives the division greater geographical reach.

Development portfolio

in CHF million, at historical cost

1892019
1852018

CHF 53.2 million invested in plots of land in attractive locations.

EBITDA

in CHF m

44.52019
40.82018

Good EBITDA as a basis for further profitable growth.

Division profile

From idea through to completely developed site. Division Development specialises in value-oriented development of properties and sites. Implenia already has a leading position in this area in Switzerland, and is already expanding beyond its home market. The division will be adding to its range of services in future by developing innovative, scalable, real estate products and comprehensive real estate services.