4 Notes to the consolidated balance sheet
4.1 Investment real estate
Residential real estate | Commercial real estate | Investment real estate | Total investment real estate | |||||||||||||
CHF million | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||
Acquisition costs | ||||||||||||||||
As at 1 January | 559.2 | 558.4 | 3 048.9 | 2 671.4 | 27.2 | 54.2 | 3 635.3 | 3 284.0 | ||||||||
Purchases | 0.0 | 0.0 | 112.0 | 329.0 | 0.0 | 0.0 | 112.0 | 329.0 | ||||||||
Investments | 4.9 | 0.6 | 7.3 | 16.5 | 18.3 | 29.4 | 30.5 | 46.5 | ||||||||
Capitalised building loan interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.2 | 0.4 | 0.2 | 0.4 | ||||||||
Disposals | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Reclassification as revaluation | 0.0 | 0.2 | 0.1 | 0.1 | 0.0 | 0.0 | 0.1 | 0.3 | ||||||||
Reclassifications | 39.2 | 0.0 | –40.6 | 31.9 | 1.4 | –56.8 | 0.0 | –24.9 | ||||||||
As at 31 December | 603.3 | 559.2 | 3 127.7 | 3 048.9 | 47.1 | 27.2 | 3 778.1 | 3 635.3 | ||||||||
Revaluation | ||||||||||||||||
As at 1 January | 259.2 | 247.4 | 63.9 | 27.8 | –1.8 | 15.3 | 321.3 | 290.5 | ||||||||
Higher revaluations | 49.0 | 17.5 | 76.1 | 48.8 | 15.2 | 5.4 | 140.3 | 71.6 | ||||||||
Lower revaluations | –2.1 | –5.5 | –76.6 | –44.4 | –1.0 | 0.0 | –79.7 | –49.8 | ||||||||
Disposals | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Reclassification of | 0.0 | –0.2 | –0.1 | –0.1 | 0.0 | 0.0 | –0.1 | –0.3 | ||||||||
Reclassifications | 1.4 | 0.0 | 0.0 | 31.8 | –1.4 | –22.5 | 0.0 | 9.3 | ||||||||
As at 31 December | 307.5 | 259.2 | 63.3 | 63.9 | 11.0 | –1.8 | 381.8 | 321.3 | ||||||||
Balance sheet value = market value on | 818.4 | 805.8 | 3 112.8 | 2 699.2 | 25.4 | 69.5 | 3 956.6 | 3 574.5 | ||||||||
Balance sheet value = market value on | 910.8 | 818.4 | 3 191.0 | 3 112.8 | 58.1 | 25.4 | 4 159.9 | 3 956.6 | ||||||||
of which pledged or subject to restricted disposability | 812.0 89.2% | 768.8 | 2 704.7 84.8% | 2 387.4 | 0.0 0.0% | 0.0 | 3 516.7 84.5% | 3 156.2 |
The purchase refers to the commercial property at Freiburgstrasse 130 in Bern, acquired as at 10 December 2018. It will be reported in the income statement with effect from the 2019 financial year.
The value-enhancing investments relate to the yield-producing properties Limmataustrasse 2–8/Limmatstrasse 9–11/Engstringermatte, Schlieren ZH (CHF 4.8 million), Schiffbaustrasse 2, Zurich (CHF 2.2 million), Grüngasse 27–31/Badenerstrasse 119–133, Zurich (CHF 1.9 million), Vulkanstrasse 106, Zurich (CHF 1.7 million), and 13 other properties (CHF 1.6 million).
The reclassifications relate to two properties on the Grünhof site in Zurich (CHF 33.9 million), Hardstrasse 301 on the Escher-Wyss site in Zurich (CHF 6.7 million) and Fangletenstrasse 4–18 in Bülach ZH (CHF 39.2 million), which has been part of the residential properties since 1 October 2018.
4.2 Development real estate
Development | Buildings under | Completed real estate | Development real estate | |||||||||||||
CHF million | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||
As at 1 January | 78.3 | 101.6 | 29.9 | 8.3 | 8.3 | 55.8 | 116.5 | 165.7 | ||||||||
Purchases | 75.0 | 5.3 | 0.0 | 0.0 | 0.0 | 0.0 | 75.0 | 5.3 | ||||||||
From construction activity/development | 2.2 | 9.1 | 21.4 | 13.0 | 0.0 | –2.2 | 23.6 | 19.9 | ||||||||
Earnings from sales Development | 1.0 | 0.5 | 4.1 | 0.0 | 0.4 | 11.3 | 5.5 | 11.8 | ||||||||
Impairment | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||||
Disposals/reclassification to contract assets | –20.3 | –29.7 | –44.0 | 0.0 | –8.7 | –56.7 | –73.0 | –86.4 | ||||||||
Reclassifications | 0.0 | –8.4 | 0.0 | 8.6 | 0.0 | 0.0 | 0.0 | 0.2 | ||||||||
As at 31 December = balance sheet value | 136.2 | 78.3 | 11.4 | 29.9 | 0.0 | 8.3 | 147.6 | 116.5 | ||||||||
of which pledged or subject to restricted disposability | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
The disposal of development reserves relates to the property on Grindelstrasse Bassersdorf ZH (CHF 20.3 million), disposals of buildings under construction relate to the projects Solistrasse Bülach ZH (CHF 27.1 million) and Kirschblütenweg Basel (CHF 16.9 million), and disposals of completed real estate relate to the Guggach project in Zurich (CHF 8.7 million). Due to the changeover to IFRS 15, disposals of buildings under construction and completed real estate in an amount of CHF 17.8 million were recognised directly through equity.
As at 31 December 2018, the portfolio of development properties comprised the following:
Location | Property | Acquisition/ | Site area | Register of | Book value | Estimated | Project status | Expected | ||||||||
Development reserves | ||||||||||||||||
Dielsdorf | Neuwisen | 2013 | 46 419 | no | 36.92 | 175.0 | in planning | open | ||||||||
Lucerne | Eggen | 2018 | 8 386 | no | 33.92 | 70.0 | in planning | open | ||||||||
Rümlang | Bäuler | 1987 | 30 278 | yes | 16.02 | 100.0 | in planning | open | ||||||||
Winterthur | Florenstrasse | 2016 | 11 582 | no | 21.02 | 55.0 | in planning | open | ||||||||
Zufikon | Alter Züriweg | 2017 | 3 806 | no | 5.92 | 17.0 | in planning | open | ||||||||
Zurich | Spiserstrasse | 2018 | 2 195 | no | 22.52 | 47.0 | in planning | open | ||||||||
Total development reserves | 136.2 | 464.0 | ||||||||||||||
Buildings under construction | ||||||||||||||||
Bülach | Solistrasse | 2011 | 18 586 | yes | 11.4 | 55.0 | in progress | 2019 | ||||||||
Total buildings under construction | 11.4 | 55.0 | ||||||||||||||
Completed real estate | ||||||||||||||||
0.0 | ||||||||||||||||
Total completed real estate | 0.0 | |||||||||||||||
Total development real estate | 147.6 | 519.0 |
1 Land and building costs
2 Book value includes acquisition costs for the land 100% owned by Allreal and accrued project costs of third parties
Solistrasse, Bülach ZH
Five new-build apartment buildings with a total of 73 condominiums and 78 underground parking spaces to Minergie-Eco standard with lettable floor space (100% residential) of 8,150 square metres. It is being built by the Projects & Development division and is scheduled for completion in 2019. As at 31 December 2018, contracts of sale had been notarised for 56 out of 73 residential units and 5 had been reserved, 0 of which with transfer of ownership.
Guggach, Zurich
Four new-build apartment buildings with a total of 197 condominiums and 219 underground parking spaces to Minergie standard with lettable floor space (100% residential) of 25,919 square metres. The project was built by the Projects & Development division and completed in 2016. As at 31 December 2018, 197 out of 197 residential units had been sold, 196 of which with transfer of ownership.
The book value (CHF 2.5 million) of the residential unit still pending transfer of ownership was reclassified as contract assets.
4.3 Other property, plant and equipment
CHF million | 2018 | 2017 | ||
Acquisition costs | ||||
As at 1 January | 6.1 | 5.9 | ||
Additions | 0.2 | 0.2 | ||
Disposals | –0.1 | 0.0 | ||
As at 31 December | 6.2 | 6.1 | ||
Accumulated depreciation | ||||
As at 1 January | 5.0 | 4.8 | ||
Additions | 0.1 | 0.2 | ||
Disposals | 0.0 | 0.0 | ||
As at 31 December | 5.1 | 5.0 | ||
Book value as at 31 December | 1.1 | 1.1 | ||
of which pledged or subject to restricted disposability | 0.0 | 0.0 |
Other property, plant and equipment comprises IT equipment (CHF 0.2 million) and works of art (CHF 0.9 million).
4.4 Financial assets
CHF million | 31.12.2018 | 31.12.2017 | ||
Prefinancing of tenant fit-outs | 125.3 | 133.2 | ||
Pension plan assets | 10.6 | 9.9 | ||
Financial assets | 135.9 | 143.1 |
In the Real Estate division, Allreal provided tenants with prefinancing of costs for interior fit-outs of business and commercial premises which will be repaid in full by the tenants over the term of their leases on an annuity basis. Final maturities for repayment of the prefinanced tenant fit-outs run until 2034, with interest rates at 1.00 to 5.55% per annum, depending on the individual contractual arrangements. Totalling CHF 109.5 million (31.12.2017: CHF 116.1 million), the largest individual positions for tenant fit-outs on the Toni site, Zurich, and on Zürcherstrasse, Winterthur, are with the Canton of Zurich as counterparty.
As at the balance sheet cut-off date, the prefinanced tenant fit-outs break down as follows:
CHF million | 2018 | 2017 | ||
Acquisition costs | ||||
As at 1 January | 135.5 | 139.1 | ||
Additions | 2.6 | 5.3 | ||
Disposals | –11.2 | –8.9 | ||
As at 31 December | 126.9 | 135.5 | ||
Accumulated depreciation | ||||
As at 1 January | 2.3 | 2.3 | ||
Additions | 0.0 | 0.0 | ||
Disposals | –0.7 | 0.0 | ||
As at 31 December | 1.6 | 2.3 | ||
Book value as at 31 December | 125.3 | 133.2 |
On the balance sheet cut-off date, pension plan assets (IAS 19) stood at CHF 10.6 million (2017: assets of CHF 9.9 million).
4.5 Intangible assets
CHF million | 2018 | 2017 | ||
Acquisition costs | ||||
As at 1 January | 0.4 | 0.2 | ||
Additions | 0.1 | 0.2 | ||
Disposals | 0.0 | 0.0 | ||
As at 31 December | 0.5 | 0.4 | ||
Accumulated depreciation | ||||
As at 1 January | 0.1 | 0.0 | ||
Additions | 0.2 | 0.1 | ||
Disposals | 0.0 | 0.0 | ||
As at 31 December | 0.3 | 0.1 | ||
Book value as at 31 December | 0.2 | 0.3 |
4.6 Contract assets
CHF million | 31.12.2018 | 31.12.2017 | ||
Order balances for sale of development properties | 21.4 | 0.0 | ||
Order balances for Projects & Development division | 26.9 | 0.0 | ||
Contract assets | 48.3 | 0.0 |
4.7 Trade receivables
CHF million | 31.12.2018 | 31.12.2017 | ||
Receivables Projects & Development division | 38.9 | 26.9 | ||
Order balances for Projects & Development division | 0.0 | 46.8 | ||
Receivables Real Estate division | 6.9 | 4.9 | ||
Trade receivables | 45.8 | 78.6 |
The CHF 6.9 million in receivables due to the Real Estate division include balances (not yet due) owed by property management companies.
The maturities structure for the non-value-adjusted receivables of the Projects & Development division was as follows as at 31 December:
CHF million | 2018 | 2017 | ||
Not due | 17.7 | 14.1 | ||
Overdue by up to 30 days | 17.1 | 4.6 | ||
Overdue by between 31 and 60 days | 1.9 | 0.0 | ||
Overdue by between 61 and 120 days | 2.2 | 8.2 | ||
Overdue by more than 120 days | 0.0 | 0.0 | ||
Receivables Projects & Development division | 38.9 | 26.9 |
The stated values are after deduction of prepayments made for each project which as at 31 December is under construction for third parties and has not yet been billed and paid.
CHF million | 2018 | 2017 | ||
Contract costs incurred | 382.8 | 452.1 | ||
Fee income booked | 38.6 | 44.6 | ||
Gains and losses booked | 22.4 | 24.3 | ||
Services provided | 443.8 | 521.0 | ||
less prepayments received | –448.2 | –494.9 | ||
Total project balances | –4.6 | 26.1 | ||
Of which with credit balance (recognised as contract assets / 2017: trade receivables) | 26.9 | 46.8 | ||
Of which with debt balance (recognised as contract liabilities / 2017: trade payables) | 31.5 | 20.7 |
4.8 Other receivables
CHF million | 31.12.2018 | 31.12.2017 | ||
Prepaid expenses and accrued income | 0.8 | 0.2 | ||
Receivables arising from WIR balances | 0.4 | 0.6 | ||
Receivables arising from value added tax | 0.2 | 0.1 | ||
Receivables arising from decontamination work | 0.4 | 0.4 | ||
Diverse other receivables | 0.5 | 0.6 | ||
Other receivables | 2.3 | 1.9 |
4.9 Cash
Of the cash amounting to CHF 40.6 million (31.12.2017: CHF 38.1 million), CHF 11.7 million is freely disposable in the form of current account balances and CHF 28.6 million can only be used for certain third-party construction projects of the Projects & Development division.
4.10 Share capital
On 20 April 2018, the annual general meeting of Allreal Holding AG voted in favour of lowering the share capital by reducing the nominal value of each registered share from CHF 50.00 to CHF 1.00 and using the amount of the reduction to repay CHF 6.25 per registered share to shareholders and to allocate CHF 42.75 per registered share to the reserves from contribution of capital. Accordingly, as at the balance sheet cut-off date, the share capital of Allreal Holding AG comprised 15,942,821 registered shares with a nominal value of CHF 1.00 each. Each share carries one vote and confers entitlement to attend the general meeting if entered in the share register.
Shareholdings developed as follows:
Number of shares | Shares issued | Treasury shares | Outstanding shares | |||
2017 | ||||||
As at 1 January | 15 942 821 | 12 000 | 15 930 821 | |||
Purchase of treasury shares | 164 174 | |||||
Sale of treasury shares | –146 144 | |||||
Share-based reimbursement | –502 | |||||
As at 31 December | 15 942 821 | 29 528 | 15 913 293 | |||
2018 | ||||||
As at 1 January | 15 942 821 | 29 528 | 15 913 293 | |||
Purchase of treasury shares | 228 316 | |||||
Sale of treasury shares | –199 596 | |||||
Share-based reimbursement | –1 193 | |||||
As at 31 December | 15 942 821 | 57 055 | 15 885 766 |
The average purchase price per treasury share stands at CHF 155.35 (31.12.2017: CHF 165.25).
The Board of Directors is authorised by the annual general meeting to increase the share capital – excluding the subscription rights of shareholders as applicable – until 20 April 2020 to acquire businesses, business units, participating interests or real estate through an exchange of shares, for financing or refinancing the acquisition of businesses, business units, participating interests or investment projects, or for the purpose of an international placement of shares worth up to CHF 1.0 million by issuing up to 1,000,000 registered shares each with a nominal value of CHF 1.00 (authorised capital).
For the purpose of issuing convertible bonds, warrant bonds or other financial instruments, the annual general meeting of 31 March 2006 created – excluding the subscription rights of shareholders – conditional capital of up to CHF 125.0 million through the issue of up to 2,500,000 registered shares with a par value of CHF 50 each. Bearers of the convertible and/or warrant bonds are entitled to subscribe to the new shares. This conditional capital decreased by CHF 0.2 million to CHF 124.8 million (as at 31 December 2018) following the conversion of convertible bonds into shares in previous years. The nominal value reduction to CHF 1.00 per share is also applicable to conditional capital, resulting in the latter amounting to CHF 2,495,763 as at 31 December 2018.
Further, Allreal Holding AG has conditional capital of CHF 200,000 (200,000 registered shares at a nominal value of CHF 1.00 each) at its disposal for the purpose of issuing options to the members of the Board of Directors and management.
The Board of Directors will propose to the Allreal Holding AG annual general meeting of 12 April 2019 a distribution of CHF 6.50 per share, corresponding to a total amount of CHF 103.6 million.
In 2018, CHF 99.3 million was distributed in the form of a nominal value reduction to shareholders (CHF 6.25 per share).
4.11 Borrowings
Maturity of liabilities at nominal values
CHF million | < 1 year | 1–3 years | 3-5 years | > 5 years | Total | |||||
As at 31.12.2017 | ||||||||||
Borrowings | 558.0 | 306.0 | 359.3 | 689.7 | 1 913.0 | |||||
Total in % | 29.2 | 16.0 | 18.8 | 36.0 | 100.0 | |||||
As at 31.12.2018 | ||||||||||
Borrowings | 520.0 | 301.0 | 361.3 | 890.0 | 2 072.3 | |||||
Total in % | 25.1 | 14.5 | 17.4 | 43.0 | 100.0 |
The financial debt of Allreal Group consists of bank loans secured by mortgage (fixed advances and fixed-rate mortgages) and bond issues. The bank loans in the form of fixed advances are extended on a rolling basis.
Bond issues with a total par value of CHF 1,080 million and a book value of CHF 1,079.6 million are recognised under borrowings. During the period under review, CHF 0.3 million was spent on the amortisation of the issuing costs.
4.12 Provisions
The provisions for construction guarantees cover existing risks arising from completed projects of the Projects & Development division. The other provisions comprise possible outflows of funds arising from pending litigation.
Short-term provisions
Construction guarantees | Other | Total | ||||||||||
CHF million | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||
As at 1 January | 4.1 | 4.2 | 0.9 | 1.6 | 5.0 | 5.8 | ||||||
Allocation | 0.9 | 4.5 | 0.0 | 0.0 | 0.9 | 4.5 | ||||||
Utilisation | –3.5 | –4.4 | 0.0 | –0.7 | –3.5 | –5.1 | ||||||
Write-back | –0.5 | –0.2 | 0.0 | 0.0 | –0.5 | –0.2 | ||||||
As at 31 December | 1.0 | 4.1 | 0.9 | 0.9 | 1.9 | 5.0 |
Long-term provisions
Construction guarantees | Other | Total | ||||||||||
CHF million | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||
As at 1 January | 1.5 | 1.8 | 0.5 | 13.4 | 2.0 | 15.2 | ||||||
Allocation | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
Utilisation | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
Write-back | 0.0 | –0.3 | 0.0 | –12.9 | 0.0 | –13.2 | ||||||
As at 31 December | 1.5 | 1.5 | 0.5 | 0.5 | 2.0 | 2.0 |
4.13 Contract liabilities
CHF million | 31.12.2018 | 31.12.2017 | ||
Order balances for Projects & Development division | 31.5 | 0.0 | ||
Contract liabilities | 31.5 | 0.0 |
4.14 Prepayments for development real estate
CHF million | 31.12.2018 | 31.12.2017 | ||||
Kirschblütenweg | Basel | – | 2.7 | |||
Guggach | Zurich | 0.0 | 1.1 | |||
Solistrasse | Bülach (ZH) | 0.2 | 1.2 | |||
Prepayments for development real estate | 0.2 | 5.0 |
4.15 Trade payables
CHF million | 31.12.2018 | 31.12.2017 | ||
Payables Projects & Development division | 22.3 | 33.5 | ||
Order balances for Projects & Development division | 0.0 | 20.7 | ||
Liabilities to property management companies | 0.7 | 0.0 | ||
Trade payables | 23.0 | 54.2 |
4.16 Other current liabilities
CHF million | 31.12.2018 | 31.12.2017 | ||
Diverse liabilities | 0.9 | 0.4 | ||
Accrual of staff holiday entitlements | 1.3 | 1.5 | ||
Accrued expenses and prepaid income | 12.7 | 15.1 | ||
Other current liabilities | 14.9 | 17.0 |
As at the balance sheet date, all holiday entitlement not yet utilised by employees is evaluated on the basis of individual rates of pay and is recognised as an accrual in the consolidated financial statements. As at 31.12.2018, this accrual amounted to CHF 1.3 million (31.12.2017: CHF 1.5 million).
Accrued expenses and prepaid income essentially comprise accrued interest expenses arising from financial liabilities, real estate expenses or operating expenses not yet settled and remuneration not yet paid to the Board of Directors and Group Management.