Stories

«We’re feeling the synergy between the two segments even more.»

2023 proved to be one of the most challenging years in the real estate sector in a long time – rising interest rates, far fewer transactions, and valuation corrections were just some of the headline issues. In spite of this, Swiss Prime Site ended the year with a strong operational result. René Zahnd, Swiss Prime Site CEO, looks back on the financial year.

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New Work at Swiss Prime Site

Since spring 2022, Swiss Prime Site employees have been enjoying not just a unique work location, but also new office spaces that epitomise the spirit of New Work. The return of floor space by a tenant in the Prime Tower offered the rare opportunity to move closer together and to merge and redesign two adjacent storeys. In an interview with Emilia Nenakhova, we learn more about the planning, modification and occupation of the new spaces, and the positive outcomes for company culture.

Swiss Prime Site

We meet Emilia Nenakhova in the expansive meeting area on the 33rd floor of Prime Tower. After a quick coffee, we settle into a corner, take in the view of the city skyline and chat about this quite exceptional project. 

What was special about this modification?
For me, what was most unusual about this project was that I had two hats on. On the one hand I was part of the project management and on the other, the future user. To approach the project with a neutral, needs-based mindset, I had numerous discussions with my colleagues to garner their input and expectations, and took them into account wherever possible. 

What are the stages in an office planning project like this?
That varies in each case. The starting point has to be analysing the status quo and understanding the goals – the vision. Then you have to develop a budget and a schedule. Later, you dive into the advanced project planning. That stage is about requirements, selecting stakeholder groups, holding workshops and the preparation of detailed area and materialization studies, as well as the coordinated scheduling and relocation planning. In the implementation phase, coordinating and monitoring the schedule are key. And lastly, it’s a question of adhering to deadlines and – most critically – the budget.

That sounds a bit like a moving target. How did you go about it?
The most important thing by far was to get my colleagues on board, so we put together a team of ambassadors. Every department in the company was represented. Regular dialogue with our «sponsors» higher up was also vital. It was in this context that we reached decisions on issues raised by the team of ambassadors. 
 

«It’s important to make sure you always keep an eye on the schedule and build in a buffer for contingencies and unexpected challenges. Basically, that you expect the unexpected.» 

And how much say did employees have?
We held numerous workshops to capture requirements. In some instances, we used grass-roots democracy and took a vote on certain things. Sometimes there were ordinary consultative meetings, with a few longer ones now and again. 

What stakeholder groups were involved?
Internally, we had individual representatives from management, our «sponsors», and the team of ambassadors – the staff representatives. Externally, we had invaluable support from a workspace consultant and our furniture supplier. Their professionalism and creativity helped us a great deal, and their pragmatic approach was perfect for us.

What were the challenges or hurdles that you encountered?
Supply times and punctuality are the two most significant. And then, of course, the budget control that goes along with that. Construction issues such as delivery and fire protection also played a key role.

How did you maintain an overview?
Disciplined time management. It sounds very painstaking. And it is. But without it we would probably still be working on it today! That’s why it’s important to make sure you always keep an eye on the schedule and build in a buffer for contingencies and unexpected challenges... basically, that you expect the unexpected. Good planning also reduces stress. And it helped that the «construction site» was only a few metres from my workspace, so I could be on site quickly. At the same time, this was also a challenge that directly affected us, as we were rebuilding on the 34th floor during ongoing operations.

Can you build sustainability aspects into this kind of project?
Of course! Sustainability was one of the requirements from the start. Our goal was to create office space that aligns with the healthy building approach. For example, our air quality was already high, but we thought about how we could improve it even more. We found a special mineral paint that not only looks good on our walls, but also has air-purifying characteristics. Another example is the acoustics. We use a variety of materials to ensure we can focus on our work. A lot of it is Cradle to Cradle certified, by the way. Optimal greenery with all sorts of plants makes a great finishing touch. 

What flexible elements did you use to enhance the new office landscape?
We wanted to create an environment that allows for a variety of activities and forms of work. For example, you can book a regular office workspace online for a half day or full day if you need to. But for short visits to Prime Tower, there are numerous flexible work areas where you can sit and really concentrate on your work. And for smaller tasks in between there are sofa corners and standing desks. After a little more than six months, we can see that this concept is working very well.

Do you think that the new office environment also influences company culture?
That was one of our sub-goals. So far, feedback has been extremely positive. The elements I’ve mentioned were intended to get employees talking to each other and to strengthen the internal flow of information. 

What else do you hope the new work environment will achieve?
I hope that the new offices help our colleagues to work more efficiently and experience more variety in their working day.

One final question: what is or was your greatest wish in connection with the project?
I hoped we would create a working environment where, come Sunday night, people will be looking forward to Monday. When I look around, I have the feeling that we’ve come pretty close to achieving that [laughs].
 

A career within the Swiss Prime Site Group?

Setting an example of sustainability

As the largest real estate company listed on the stock exchange in Switzerland, we lead by example and are aware of our responsibilities towards our employees, customers, the environment and society as a whole. Our vision is to generate value and create sustainable living spaces. For us, this means a comprehensive, multidimensional business concept in which non-financial aspects are taken into account as well as financial goals.

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New Work at Swiss Prime Site

Since spring 2022, Swiss Prime Site employees have been enjoying not just a unique work location, but also new office spaces that epitomise the spirit of New Work. The return of floor space by a tenant in the Prime Tower offered the rare opportunity to move closer together and to merge and redesign two adjacent storeys. In an interview with Emilia Nenakhova, we learn more about the planning, modification and occupation of the new spaces, and the positive outcomes for company culture.

Swiss Prime Site

We meet Emilia Nenakhova in the expansive meeting area on the 33rd floor of Prime Tower. After a quick coffee, we settle into a corner, take in the view of the city skyline and chat about this quite exceptional project. 

What was special about this modification?
For me, what was most unusual about this project was that I had two hats on. On the one hand I was part of the project management and on the other, the future user. To approach the project with a neutral, needs-based mindset, I had numerous discussions with my colleagues to garner their input and expectations, and took them into account wherever possible. 

What are the stages in an office planning project like this?
That varies in each case. The starting point has to be analysing the status quo and understanding the goals – the vision. Then you have to develop a budget and a schedule. Later, you dive into the advanced project planning. That stage is about requirements, selecting stakeholder groups, holding workshops and the preparation of detailed area and materialization studies, as well as the coordinated scheduling and relocation planning. In the implementation phase, coordinating and monitoring the schedule are key. And lastly, it’s a question of adhering to deadlines and – most critically – the budget.

That sounds a bit like a moving target. How did you go about it?
The most important thing by far was to get my colleagues on board, so we put together a team of ambassadors. Every department in the company was represented. Regular dialogue with our «sponsors» higher up was also vital. It was in this context that we reached decisions on issues raised by the team of ambassadors. 
 

«It’s important to make sure you always keep an eye on the schedule and build in a buffer for contingencies and unexpected challenges. Basically, that you expect the unexpected.» 

And how much say did employees have?
We held numerous workshops to capture requirements. In some instances, we used grass-roots democracy and took a vote on certain things. Sometimes there were ordinary consultative meetings, with a few longer ones now and again. 

What stakeholder groups were involved?
Internally, we had individual representatives from management, our «sponsors», and the team of ambassadors – the staff representatives. Externally, we had invaluable support from a workspace consultant and our furniture supplier. Their professionalism and creativity helped us a great deal, and their pragmatic approach was perfect for us.

What were the challenges or hurdles that you encountered?
Supply times and punctuality are the two most significant. And then, of course, the budget control that goes along with that. Construction issues such as delivery and fire protection also played a key role.

How did you maintain an overview?
Disciplined time management. It sounds very painstaking. And it is. But without it we would probably still be working on it today! That’s why it’s important to make sure you always keep an eye on the schedule and build in a buffer for contingencies and unexpected challenges... basically, that you expect the unexpected. Good planning also reduces stress. And it helped that the «construction site» was only a few metres from my workspace, so I could be on site quickly. At the same time, this was also a challenge that directly affected us, as we were rebuilding on the 34th floor during ongoing operations.

Can you build sustainability aspects into this kind of project?
Of course! Sustainability was one of the requirements from the start. Our goal was to create office space that aligns with the healthy building approach. For example, our air quality was already high, but we thought about how we could improve it even more. We found a special mineral paint that not only looks good on our walls, but also has air-purifying characteristics. Another example is the acoustics. We use a variety of materials to ensure we can focus on our work. A lot of it is Cradle to Cradle certified, by the way. Optimal greenery with all sorts of plants makes a great finishing touch. 

What flexible elements did you use to enhance the new office landscape?
We wanted to create an environment that allows for a variety of activities and forms of work. For example, you can book a regular office workspace online for a half day or full day if you need to. But for short visits to Prime Tower, there are numerous flexible work areas where you can sit and really concentrate on your work. And for smaller tasks in between there are sofa corners and standing desks. After a little more than six months, we can see that this concept is working very well.

Do you think that the new office environment also influences company culture?
That was one of our sub-goals. So far, feedback has been extremely positive. The elements I’ve mentioned were intended to get employees talking to each other and to strengthen the internal flow of information. 

What else do you hope the new work environment will achieve?
I hope that the new offices help our colleagues to work more efficiently and experience more variety in their working day.

One final question: what is or was your greatest wish in connection with the project?
I hoped we would create a working environment where, come Sunday night, people will be looking forward to Monday. When I look around, I have the feeling that we’ve come pretty close to achieving that [laughs].
 

A career within the Swiss Prime Site Group?

Contributions in kind – the ideal solution for property owners

Direct property investment can be challenging for property owners. The kind of ­detailed knowledge of regional markets and specific real estate expertise that Swiss Prime Site Solutions offers is essential. Many different factors need to be ­considered in an existing portfolio, such areas as sustainability, vacancy reduction, ­renovation backlogs and utilisation of potential, as well as regulatory and political ­challenges. Economies of scale are also an important consideration here.

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Direct property investment can be challenging for property owners. The kind of ­detailed knowledge of regional markets and specific real estate expertise that Swiss Prime Site Solutions offers is essential. Many different factors need to be ­considered in an existing portfolio, such areas as sustainability, vacancy reduction, ­renovation backlogs and utilisation of potential, as well as regulatory and political ­challenges. Economies of scale are also an important consideration here.

The contribution of real estate to an ­investment vehicle is defined as a contribution in kind. In return, the owner receives shares in the investment vehicle (investment foundation and/or investment fund). The tax-optimised contribution in kind allows the property owner to transfer their directly held property portfolio to an indirect real estate investment. A contribution in kind also gives small and medium-­sized pension funds and institutional investors access to larger real estate investment volumes that are professionally and efficiently managed.

«Our decision to enter into a transaction with the Swiss Prime Investment Foundation was influenced not only by the investment group’s strong portfolio, but also by its professional approach.»
Antonio Sacco, Managing Director of the Ringier Group’s pension fund

Diversification is of central importance in optimising the risk-return profile of a property portfolio. Since direct real estate investment by pension funds has historically grown regionally, contribution-in-kind transactions allow greater geographical and use-specific diversification. Furthermore, the considerations around sustainability are crucially important.

Implementing a contribution in kind is a multi-step process which usually comprises five key milestones. Firstly, the owners need to be willing to sell the properties. The fund management company or investment foundation then checks whether the property is suitable for acquisition, while the custodian bank verifies the eligibility of the investors. The third step involves a thorough inspection of the property, in which the purchase price is determined by a valuation expert, and a purchase price indication is given. The fourth step involves the payment of the purchase price, which is made in the form of share certificates and, if applicable, cash. In the fifth and final step, the previous property owner becomes the new investor with shares.

Swiss Prime Site Solutions has demonstrated its expertise with contributions in kind several times over recent years. We have successfully completed five such trans­actions with a value of about CHF 400 million. For example, we were able to take over 33 properties for the Swiss Prime Investment Foundation as part of a contribution in kind from the Ringier Group’s pension fund. «Our deci­sion to enter into a transaction with the Swiss Prime Investment Foundation was influenced not only by the investment group’s strong portfolio, but also by its professional approach», says Antonio Sacco, managing director of the Ringier Group’s pension fund.

We support our clients throughout the entire contribution-in-kind process with our extensive experience and through access to our nationwide network of experts. Our innovative process for execution of contributions in kind serves as an exemplar.

Benefits of in-kind ­contributions

Better performance

­Efficient use of capital, potential ­revaluation gains, tax advantages for investors, asset optimisation

Less risk

Greater diversification effect, stable cash flow, maximum transparency

Optimisation of resources

Assignment of operational property management, efficiency gains, ­freeing up of resources, succession planning, expertise of Swiss Prime Site Solutions

Greater flexibility

Timing of the contribution in kind ­independent of issuance windows, greater fungibility (possible trade­ability of shares), more decision-­making freedom

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