Allreal reports flat earnings despite a decline in rental income

2026-02-20 15:02:20

Investing.com – Swiss real estate company Allreal (SIX:ALLN) announced on Friday that full-year earnings for 2025 are flat, in line with market expectations, despite rental income declining more than expected due to renovations and rising vacancy rates.

The company’s rental income decreased by 8% year-over-year to 204 million Swiss francs, below UBS’s estimate of 212 million Swiss francs and the market consensus of 210 million Swiss francs. The vacancy rate rose to 3.4%, an increase of 50 basis points compared to the first half of 2025.

Despite rental income falling short of expectations, net profit excluding revaluation gains remained flat at 122.1 million Swiss francs, consistent with market consensus. This result was driven by increased development activity income and lower financial and tax expenses.

Allreal’s development and realization income grew 23.6% year-over-year to 52.9 million Swiss francs, demonstrating continued growth momentum in the second half compared to 26 million Swiss francs in the first half.

The company’s order backlog increased from 667 million Swiss francs in 2024 to 837 million Swiss francs, with further improvement in gross profit margin.

The company’s loan-to-value ratio decreased from 47.5% in 2024 and 49.5% in the first half of 2024 to 45.8%. Allreal maintained a dividend of 7.0 Swiss francs per share, in line with expectations.

Total valuation gains amounted to 125 million Swiss francs, exceeding UBS’s estimate of 118 million Swiss francs, indicating a slight decline in second-half earnings compared to 70 million Swiss francs in the first half of 2025. Including revaluation gains, net profit reached 219.3 million Swiss francs, 6% higher than UBS’s estimate of 207 million Swiss francs.

Looking ahead to 2026, Allreal expects rental income to rise, vacancy rates to decline, development profits to increase, and construction volume to grow slightly.

The company anticipates improved operating profit and expects the sale of investment properties in the first half of 2026 to contribute to earnings. Although financing costs have slightly increased, balance sheet data is expected to remain stable.

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