Almost exactly a year ago, a challenging time began for us all. In the middle of lockdown, I became Chairman of the Swiss Prime Site Board of Directors. The social and political uncertainties brought about by COVID-19 have not made it easy to weather the crisis. For the management and Board of Directors, the wellbeing and safety of our employees and customers was our priority. Despite not being physically together, we created momentum and successfully coped with this extraordinary year. Swiss Prime Site ends the year with a positive operating result of CHF 762.3 million. Profit was CHF 610.4 million. The Board of Directors will propose to the 2021 Annual General Meeting a dividend of CHF 3.35.
At the beginning of the crisis, the entire Board of Directors held a weekly conference call with the management team. In early summer, we adjusted the pace in view of the slightly more relaxed situation. Swiss Prime Site’s management has successfully guided the core Real Estate business and the group companies Swiss Prime Site Solutions, Wincasa and Jelmoli through this period.
In the second half of 2020, the Board of Directors tackled Swiss Prime Site’s key strategic topics, taking into account the change in market conditions. They looked at issues around corporate structure, portfolio size and profitability as well as hurdles and opportunities for the business. Together with management, they developed a strategy based on the two strong company pillars – Real Estate and Services.
We are not seeking to materially change the size of the property portfolio from its current CHF 12 billion. However, we do want to increase profitability through targeted initiatives. This resulted in four strategic priorities. Firstly, the attractive project pipeline will continue to be implemented. This includes leveraging the potential of densification and land reserves as well as divesting projects, or parts of them, by way of «capital recycling». Secondly, the composition of types of use in the portfolio will be adjusted. The objective is to minimise risks and remain agile in the face of market changes. Thirdly, the portfolio will be actively optimised. This includes developing real estate or divesting properties and sites in less optimal locations in order to release capital. Fourth, vacancies will continue to be kept at a low level. These initiatives will make a substantial contribution towards further increasing the net yield of the core business and increasing the resilience of the portfolio in question.
After the successful divestment of Tertianum, the Services business will look at further honing its profile. The most important strategic decision here will relate to the group company Swiss Prime Site Solutions. The real estate asset manager will expand its business model to include fund products, thereby significantly extending its range of services. This strategy will result in significant growth. Wincasa will continue to press forward with the transformation towards a digital business model and will be able to significantly increase profitability once again in the medium term. At Jelmoli, a range of strategic options have been reviewed and measures defined to enable the group company to achieve a break-even result by 2023.
Five years ago, Swiss Prime Site started a process of renewal within the Board of Directors. My nomination and election, like that of other colleagues on the Board, has been the result of this process, which is still ongoing. We are pleased to propose to the shareholders at the forthcoming Annual General Meeting that Barbara A. Knoflach be accepted onto the Board as a replacement for Rudolf Huber.
I am thrilled to have been Chairman of such a dynamic and innovative company for the last year. It fills me with particular confidence that Swiss Prime Site is so committed to sustainability and is embedding this principle across different levels of the value-added process. An excellent example of this is the green bond, launched in autumn 2020. Both our business areas provide us with good long-term potential and a robust business model that remains resilient even in difficult times, such as those we have experienced in 2020. I therefore look to the future with optimism and confidence.
I would like to thank you, our valued shareholders, customers and partners, for your trust and support. My thanks also go to all employees and the management across the entire Swiss Prime Site Group.