I n the future, health-conscious people won’t just be keeping a close eye on the food they eat; increasingly, they’ll also be looking at the spaces in which they have to spend time. So it’s time to ensure that both living spaces and offices promote health and productivity. Due to the pandemic, such aspirations are gaining traction among everyone, from real estate owners, tenants and users to public authorities and policy-makers. The issue also has economic relevance. According to a study by Harvard University, healthy buildings can significantly lower rates of employee absenteeism and health costs for employers.

Our goal is to place people at the heart of what we do and enhance their well­being through our real estate.

Making people the focus

Our goal is to place people at the heart of what we do and enhance their wellbeing through our properties. To do this, we need intelligent technologies as well as personal services customised to the user. According to the Healthy Building Network knowledge platform, the focus is on achieving an optimal indoor climate, ventilation and lighting quality, acoustics and invigorating interior design. Some early examples in Zurich and Basel show how office properties might be designed with these features.

First impressions count

In future, all properties will be entered via an automatic sliding or revolving door. Sanitiser will be offered as standard in the entrance hall. As you walk through the entrance, your body temperature will be taken. If this is within the appropriate range, you can proceed into the rest of the building, by scanning your hand. A lift concept that interacts with the overall system, like the one that has long been a feature of the Prime Tower in Zurich, carries the individual – identified by the system – straight up to their desired floor. The lifts are equipped with air purifiers that maintain the air quality within the lift.

Interaction and transit areas will be much more spacious in future.

Promoting health and productivity

Interaction and transit areas will be much more spacious in the future, so that employees can move more flexibly and meet each other to exchange ideas. The lighting system will be based on human-centric lighting technology. This will ensure optimum mental and emotional wellbeing and will stimulate productivity. All of the materials used will be free from substances that could have a negative impact on wellbeing, such as volatile organic compounds. Quite the opposite, in fact: they will be treated with a permanent antimicrobial and odour-neutralising coating.

Better air means a better «climate»

The Messeturm in Basel was renovated in 2020/21. Measurements show consistent improvements in air quality. This is also aided by plants that act as humidifiers and natural acoustic insulation. These changes have also helped to reduce stress. The air conditioning system is part of the «healthy building ecosystem» and distributes the purified interior air by zone, at the right temperature for each zone. This is made possible by sensors that monitor heat, cold, pressure and the CO₂ content of the indoor air on an ongoing basis and trigger control commands if the readings stray from the optimum.

For the users’ wellbeing

On-site services such as fitness, relaxation and catering options that promote good health and specially designed colour schemes and furnishing concepts also address new needs. In this age of employer branding and wider social awareness of healthy living, the human feel-good factor in a «healthy building» will be hugely instrumental in boosting the value and appeal of real estate. For the benefit of users, tenants and property owners.

I n real estate, around 68% of emissions can be attributed to the use phase. To decarbonise a property portfolio, it is essential to understand the components of a carbon footprint and where to source reliable information. The monitoring of energy and carbon emissions implemented at Swiss Prime Site formed the basis for the development of the Company’s CO₂ reduction pathway in 2019. The data gathered from this will ensure that we can become a climate-neutral business by 2040 and will serve to monitor our progress along the way.

The goal is clear, but the strategies required are often complex and multi-faceted. The Company’s efforts are focused on the reduction of emissions that can be directly influenced during the use phase of properties. This involves implementing instruments and processes that ensure the supply and production of renewable energy. In addition to reducing CO₂ emissions within our own value chain, we must not disregard indirect emissions. Around 30% of these emissions occur during the production of raw materials, along the supply chain and in the materials cycle. It is therefore important to ensure transparency along the supply chain and within our building stock. This is also an area where we can link goals with a reduction strategy.

However, the circular economy goes beyond technical and environmental cycles. The changing climate requires a profound transformation and innovation of our current linear economic system. For real estate companies, this means questioning the existing business model and developing it further with new innovative methods, cycle-oriented processes and new forms of collaboration. The key to success lies in a new mindset, reflected in our values and corporate culture. Achieving this depends on continuously raising awareness, sharing knowledge and strengthening our expertise in sustainability.

Why did Swiss Prime Site purchase this site?

Gianfranco Basso: The former newspaper printing site of the Neue Zürcher Zeitung offers great opportunities for property developers. High ceilings, a long and meaningful history and potential for identification with the space make existing industrial buildings and offices ideal for major projects. These were probably the decisive arguments in favour of purchase back in 2015 – and they still apply today.

Strictly speaking, the location of the site is not exactly «prime». Would you agree?

GB: Schlieren overall, and that area in particular, is very popular with a range of industries. On top of that, the product that we are now developing is extremely attractive and unique in this form. So very much prime!

What makes this kind of property special?

GB: It’s the interaction of various factors. On the one hand there’s the architecture, with its bricks, concrete, steel and plenty of light, which creates possibilities for unique meeting spaces and ensures exceptionally good visual communication. On the other hand, you’ve also got the industrial charm, the large spaces, high ceilings and load capacities, which allow for unusual uses of the space as well. The question of sustainability also plays an important role. Instead of tearing down the existing buildings and replacing them with a new build, we have preserved, renovated and converted the structure. This saved considerable resources.

«It’s the openness of the site, the mixture of internationalism and urban character, and the positive blend of history and modernity we’ve been able to generate.»

What were Swiss Prime Site’s initial plans for the site?

GB: Even back then, the vision was to create an «innovation location» on the site. We soon started discussions with our first anchor tenant, Zühlke. The consultancy firm was based on the other side of the railway tracks and was looking for a new location.

Let’s go back a step for a moment. How do you approach a project like this?

GB: We went through a classic product development process. Part of that was a strong focus on what we call the «customer journey» and asked ourselves first and foremost who needs spaces like these and what kinds of things should happen on the site. Over the years a real biotech locale has developed in Schlieren, right next to our site. This was also something that appealed to our first anchor tenant, Zühlke.

Why didn’t you simply put up an office tower?

GB: If we’d been developing the project for a large individual tenant, that might have been an option. But an office tower wouldn’t have done justice to this unique site. Our target tenants for the area are looking for surroundings that reflect who they are and inspires them. The question of location and infrastructure is hugely important in attracting the right employees.

That brings us back to the idea of the «prime product».

GB: Exactly. And this product is made up of all kinds of values and qualities. The modern spaces, the generous and attractive indoor and outdoor meeting zones, the tenant mix and in particular the diversity on the site are all important if you want to achieve impressive results with this kind of project.

Specifically, what are the success factors for the JED project?

GB: It’s the openness of the site, the mixture of internationalism and urban character, and the positive blend of history and modernity we’ve been able to generate. When you carry out projects like this, there’s a certain phase that signals to the property developer that they’re on the right track.

What phase is that?

GB: I call it the «tenant gets tenant» phase.

Were there any restrictions or obstructions from the authorities, that is, from the town of Schlieren?

GB: The town was very pleased that we were seeking dialogue with them. A project like JED is excellent for promoting the area. The location of the former printing works used to be hermetically sealed. Through our project, we’ve opened up the premises, made the site accessible, created attractive public spaces and significantly raised the quality of the location.

Looking to the future, what is still to come at JED?

GB: We still have our new building project on the land reserve that we want to use. At the same time, we plan to strengthen the innovation, knowledge transfer and entrepreneurship cluster further.

Mr Hoffmann, you recently received FINMA approval for a new real estate investment vehicle. Was it a rocky road leading up to this?

Maximilian Hoffman: I wouldn’t say rocky, but it definitely called for perseverance. A FINMA application essentially consists of two parts: applying for authorisation as a fund management company, and applying for product approval for the real estate fund. When assessing applications for a licence, FINMA checks whether the organisation and people meet the legal and regulatory requirements, and whether the capital requirements and appropriate corporate management are in place. In particular, the company must be sufficiently robust and the employees must have the necessary skills and experience. There are also strict requirements in terms of risk management, compliance and investor protection.

What were some of the main project milestones?

MH: Important milestones included strategic preparations for the product, discussions with FINMA, the preliminary review and the approval review itself. Other major steps included the submission of the final «Fund Management & Fund Product» licence application and the subsequent decision in September, plus the launch of the first fund at the start of November 2021.

Which segments are you focusing on with this first product?

MH: The investment strategy of the Swiss Prime Site Solutions Investment Fund Commercial aims to invest 40 – 60% in the office and commercial sector, 20–40% in retail and a maximum of 10–20% in specialised real estate such as logistics and industry. It could also include building land. The plan is to diversify across Switzerland. Properties will be directly held.

«Environmental aspects are considered in all phases of the investment process.»

What are the goals of the investment fund?

MH: With a secured seed portfolio of about CHF 140 million and an additional pipeline of about CHF 180 million, we have already achieved our first goal. We are now aiming to meet the medium-term target volume of CHF 1 billion through growth of about CHF 300 million per year in line with our strategy. The intention is to list the fund on the SIX Swiss Exchange within three to five years.

And how would you describe the investment strategy?

MH: We are pursuing what’s called an «AB-BA» strategy, which means our investments are focused on A towns with B locations and on B towns with A locations. Through an active management approach, we aim to generate stable cash flows while keeping vacancy rates low.

How are you planning to expand the portfolio?

MH: The seed portfolio has an excellent gross yield of 5.1%, a very low vacancy rate of 1.3% and an average unexpired lease term of 6.1 years. These are very good figures. Our main focus is on achieving growth in line with the strategy. Acquisitions are continuously assessed in terms of their effect on the fund’s overall performance, which helps us stay within the dividend yield target range at all times.

Can you tell us more about the target yield?

MH: The dividend yield on the seed portfolio is approximately 3.9%, assuming external financing at the typical market level of about 25%. The medium-term target range for investment returns is between 4.5% and 5.5%.

«We are pursuing what’s called an «AB-BA» strategy, which means our investments are focused on A towns with B locations and on B towns with A locations.»

What makes this fund attractive?

MH: With our fund, investors benefit from an entry opportunity with no premium at the net asset value. Furthermore, the secured seed portfolio gives investors access to a highly stable, balanced real estate portfolio with an attractive risk-return profile and high product stability right from the start. They also benefit considerably from our dynamic and volume-based fee model. Another advantage is that as the subscription volume increases, the issue commission decreases.

Sustainability is an important issue for investors. Where does Swiss Prime Site Solutions stand on this?

MH: Environmental aspects are considered in all phases of the investment process. The fund generally adheres to the same standards as the Swiss Prime Site Group and applies the same criteria. The long-term goals include aligning the fund with national and international sustainability programmes.

What is the process for purchasing shares in the fund?

MH: We’ve put together a responsive team just for investors and interested parties. A personal discussion provides opportunities to exchange information and align expectations and goals. Units are subscribed using a custodian bank. After the initial issue, units can be traded over the counter daily. They are also held on a secondary market.

T he demand for flexible office and commercial spaces has been growing for years. With development projects like YOND in Zurich, Swiss Prime Site has created properties that meets these demands. Tenants there are able to adapt spaces according to their business needs or those of the market. But as well as the supply of flexible spaces that are let in the traditional way, there is a big future for office space required at short notice – along co-working lines. This resulted in our collaboration with providers such as Regus in Stücki Park, Basel, and a partnership with FlexOffice, which now has six locations across Switzerland. Changes in working hours, mobile work and the increase in working from home means that office spaces are viewed and «consumed» as just one of many services. Moreover, companies want to be able to manage co-working spaces flexibly if bottlenecks occur or to accommodate employees’ needs.

The trend – «space as a service»

The market trend for more and more flexibility in rental spaces continues. As a result, options for various other types of use have emerged. For example, in collaboration with Wincasa, Swiss Prime Site has entered into a partnership with memox. The start-up provides spaces for meetings and workshops in prime locations. These spaces are fully furnished so that tenants can get to work immediately. Swiss Prime Site sees great potential within their real estate portfolio of almost 200 properties, as does Wincasa in their customers’ properties. With regard to greater flexibility and the trend towards «servitisation», Swiss Prime Site has gone a step further at Stücki Park in Basel, where the self-developed «ZIP» platform was launched in mid-2021. ZIP works on a «plug and work» principle, that is to say: move in and get to work. Fully fitted out offices and meeting rooms are on offer for teams or smaller companies. They can be furnished to a high standard on request and come with state-of-the-art infrastructure, plus many services and facilities on site. The spaces are generally rented for several months. The immediate surroundings of ZIP are urban and have a lot to offer: the largest fitness centre in the region, shops, bars, restaurants, a hotel, cinemas and a bowling alley. The next domino in terms of greater flexibility for different types of use is already emerging: laboratory spaces.

Changes in office and commercial spaces were only the beginning. Now, the market demands ultraflexible and modern spaces for research and laboratories auf nächste Zeile.

The hot topic – «lab as a service»

Traditionally, Switzerland is the top location for life sciences companies, and there is a correspondingly high need for research and laboratory spaces. At various locations in Switzerland, start-ups or even established companies will one day be able to start their research and work on the first day of their rental contract. This will save tenants both time and money, which they are then able to invest mainly in their core business – research. Those interested can choose between various levels of fit-out, and can also decide on the individual level of service quickly and easily. As with other spaces that have experienced an increase in flexibility, the needs of the end user are the primary focus. When finding locations, proximity to existing «clusters» or «ecosystems» in the life sciences sector plays a major role. Based on its history, the Basel region, for example, with its prominent pharmaceutical industry, is extremely well suited. The Zurich region is the focus of the second location. The city on the Limmat is home to the Federal Institute of Technology (ETH Zurich) and numerous national and international technology companies. Laboratory spaces are therefore in high demand.

The future – flexible and customer-focused

Developments in the real estate market are making great strides. Changes in office and commercial spaces were only the beginning. Now, the market demands ultra-flexible and modern spaces for research and laboratories. As in all areas, it is clear that a flexible business model and customer focus are decisive factors in companies’ future viability. With its existing partnerships and development projects, Swiss Prime Site is steadily moving forward on the successful path it has forged.

I n addition to the major construction projects that have been completed in the logistics real estate sector throughout Switzerland in recent years, various investment vehicles and investment groups have emerged to take advantage of this exciting opportunity. These days, almost every real estate company includes «logistics» at least as an additional use type in their portfolio. Credit Suisse summarised the dynamics at play in its logistics real estate report: «The flow of goods to be handled is enormous and continues to grow at an above-average pace. […] Online trading, urbanization and digitalization are the megatrends characterizing the development of this market.» The fact that this flow of goods has driven demand for corresponding properties in recent years is backed up by figures from a study of the Swiss market. Between 2006 and 2019, the logistics market volume in Switzerland grew continuously by around 2% per year.

Of the 184 or more properties, 9% currently fall into the category of logistics and infrastructure.

Projects in Geneva and Zurich

Swiss Prime Site’s property portfolio currently has a market value of around CHF 12.8 billion. Of the 184 or more properties, 9% currently fall into the category of logistics and infrastructure. Two major projects in this area have been partially completed in the past 24 months and transferred to the portfolio. The West-Log property is dedicated to city logistics. It is located next to the Zurich Altstetten railway station, near a tram line into the city centre and Switzerland’s main motorway, the A1. The first two floors have extra-high ceilings and house various automated storage facilities, retail spaces and showrooms. The upper levels have been designed for use as office space. Like West-Log in Zurich, the Espace Tourbillon development in Geneva is located on the outskirts of the city. The five flexible commercial buildings are ideally suited to high-tech firms, biotechnology, cleantech and R&D companies, as well as commercial, retail and service companies. To meet the current needs of industry, trade and retail, the three underground floors serve as a logistics platform, with infrastructure for lorries and other modes of transport.

According to various studies, logistics will continue to be a rewarding use category for real estate investors in Europe.

Use of reserves in the portfolio

In its existing portfolio, Swiss Prime Site Immobilien has many promising properties that meet the criteria for successful logistics hubs. One of these is the Iseli site in Regensdorf. This commercial site near the city of Zurich has an area of around 25 000 m² and boasts eight multipurpose halls that are home to specialist skilledtrade and service businesses from the construction and engineering sector. The Regensdorf location will become even more attractive in the coming years with the completion of the Bahnhof Nord development zone and the expansion of the Gubrist Tunnel. The site, which is intended for commercial use, has its own rail link and offers considerable potential for logistics and higher density development.

Swiss Prime Site Immobilien believes it is well-equipped for an even more global, highly digitalised and mobile future.

Acquisition of attractive new locations

In early 2020, Swiss Prime Site Immobilien acquired two logistics properties in a central location in the canton of Basel-Land. Proximity to the city of Basel, good accessibility from the A2 and A3 motorways, and nearby border crossings to Germany and France offer attractive conditions and additional development potential. Another logistics property was subsequently purchased in the Zurich region (Buchs). This has an area of around 20 000 m² and is situated in a logistically important cluster. The most recent significant acquisition in this area was completed in spring 2021. This was a key plot in an easily accessible location, close to the Zurich-Altstetten train station and only a stone’s throw from the existing West-Log property. The warehouse and distribution building perfectly complements the development pipeline in the city of Zurich.

Swiss Prime Site Immobilien believes it is well-equipped for an even more global, highly digitalised and mobile future.

Where are you working from right now?

Andrea Schaller: We’re talking over Teams, but I’m actually in the office.

Macarena Concha: I’m working from home, but I had to do the digital equivalent of running to get to the meeting ...

Why are you working from the office and why from home? And why were you in such a hurry?

AS: There are certain parts of my job that are hard to do from home. I often need direct, personal contact with colleagues, which is why I regularly work on site at Prime Tower.

MC: I spend around half my time at home and half in the office. I was just in a lawyer’s meeting – we had to give a project the final legal once-over.

«There’s a lot of variety in what I do. Every day is different and raises new problems that need solving.»
Andrea Schaller

Describe your job in a few sentences.

MC: Essentially, I spend a lot of time on construction sites. I drive our many real estate projects forward and am responsible for keeping them on schedule. My aim as a developer is to bring excellent products to market that will satisfy our customers.

AS: I’m also working with a lot of things that are «under construction» at the moment, but in a more figurative sense [laughs]. I’m responsible for communications at Swiss Prime Site Solutions and the Swiss Prime Investment Foundation. My job covers traditional and digital communications, branding and storytelling.

What do you like best about your job?

AS: There’s a lot of variety in what I do. Every day is different and raises new problems that need solving. There’s very little in the way of «daily business», and I take care of it very much as I go. I can get stuck in and make a difference every day.

MC: It’s the same for me when it comes to variety. I absolutely love how flexible my job is. What’s more, at Swiss Prime Site, people listen to you and your opinion matters. I really appreciate that.

«I hear the song «Try» by Pink in my head. In many ways, it’s a song about holding onto your dreams and desires.»
Macarena Concha

Why have you chosen to do the job you do rather than anything else?

AS: I’m an open, communicative person. I always try and see the bigger picture and understand things from a wider perspective. And that’s exactly what I do in my job.

MC: I love architecture. I need freedom and the opportunity to contribute my ideas and be creative. The same as Andrea, I like to see the wider context and help shape it. That’s why I’m at Swiss Prime Site.

You both have children. How have you handled things in terms of your home life?

AS: It was – and in some ways still is – a very unusual situation. I’m a single mother and so it took a bit of manoeuvring to make sure both I and my school-age daughter could continue doing what we needed to do. Fortunately I have family and friends who helped as much as they could. To be honest, I was delighted when we were able to return to work more or less as normal last summer, and I was able to see my colleagues on a more regular basis. Sometimes I feel like there need to be four of me just to be able to get everything done and give everyone around me what they need.

MC: I have to say the same as Andrea. It was a difficult time. My husband and I had to organise our lives and our children around our work. We don’t have any family nearby who can help us with the kids, which makes things harder. We have encountered a few issues, especially when they get sick. The flexibility of my job really helps, though. I’ve sometimes spent the afternoon looking after the children and then done my work later in the evening.

What’s the best thing and the worst thing about your day-to-day work?

MC: What I like most about my job is that I almost always get to start with a blank canvas. This flexibility is a huge source of energy and creativity. What I really hate are long meetings without a clearly defined goal.

AS: Absolutely. Since we’ve had to move to digital meetings, there have been more of them and they take considerably longer, because you need a lot more coordination. What I love about my job is the fact that I can bring a lot of creativity into the corporate reporting, and into my general communications work. Nothing’s off the table as long as it adds value and you can justify it.

What song comes to mind when you think of your work?

AS: For me, definitely «I’m Still Standing» by Elton John! Just to clarify, that’s because I started my job in lockdown, which meant a 

lot of things were very hard work to begin with. But in the end, it’s all okay!

MC: I hear the song «Try» by Pink in my head. In many ways, it’s a song about holding onto your dreams and desires, even though many things in life aren’t easy and it means taking certain risks in order to achieve what you want to achieve.

Swiss Prime Site is aware of its responsibility when it comes to climate protection and has been committed for quite some time to contributing towards the 1.5-degree goal of the Paris Climate Accord and the Swiss Federal Council’s climate neutrality goal for 2050. To that end, in 2019 the Company developed a CO₂ reduction pathway for the entire property portfolio and strengthened it further in the reporting year. Swiss Prime Site is using active management principles to implement a reduction pathway well below the 1.5-degree scenario. By 2040, around CHF 650 million will have been invested in achieving climate neutrality over that period for the whole property portfolio. In addition to investments in renewable energies, the majority of the expense will be in building renovations. At the same time, resources will be invested in measures to replace heating systems. In this way, the Company is taking its own steps to reduce emissions as far as possible. Where there are the anticipated unavoidable emissions, we will evaluate additional measures outside the property portfolio to achieve its climate neutrality by 2040.

More about the reduction pathway

The Akara Group was founded in 2016 and has since evolved into a FINMA-regulated fund provider with a focus on residential and commercial real estate. The group employs around 50 real estate specialists and offers real estate services in the areas of development, realisation, management and marketing. The real estate assets under management, amounting to around CHF 2.3 billion, comprise a real estate fund for tax-exempt pension funds, a private equity product for qualified investors, and a development pipeline of more than CHF 240 million.

The plan is to integrate the Akara Group into Swiss Prime Site Solutions during the course of the 2022 financial year and to merge the two fund management companies. Through the planned merger, Swiss Prime Site Solutions will grow into one of the leading Swiss real estate asset man­agers, with real estate assets under management (including development pipeline) of more than CHF 6.5 billion and an expected EBIT contribution of CHF 27–28 million in 2022. The acquisition will enable Swiss Prime Site Solutions to increase its customer base considerably and to expand the existing investment platform with additional product and fund categories, such as real estate private equity investments.

More about the AkARA Group

Under the UN’s 17 Sustainability Development Goals, SDG 11 focuses on cities and communities. These should be inclusive, safe, resilient and sustainable, with a balance between social, economic and ecological sustainability. Swiss Prime Site is further developing the Maag site with these aspects in mind. «maaglive» will complement the existing office spaces on the site with living and cultural spaces. The intention is to open up a significant proportion of the flexibly usable spaces for cultural activities. The three buildings will also be arranged around a tree-lined square. Together with other green spaces, this will contribute to heat reduction in Zurich-West. This goes hand in hand with Swiss Prime Site’s climate goal of reducing emissions to net zero by 2040.

More about «maaglive»

Madaster is an online registry for materials and products used in construction. The documentation, registration and archiving of the materials used in buildings and construction projects promotes intelligent designs, avoids waste and makes it easier for them to be broken down and recycled. The partnership with Madaster is consistent with Swiss Prime Site’s sustainability goals and measures. One excellent example of an innovative circular project as part of a total renovation is the new site for Google in Zurich (Müllerstrasse 16/20). Construction work started in July 2021 and aims to transform the 24 000 m² building into an ultra-contemporary space with the highest sustainability standards. After completion at the end of 2023, the building will be certified in accordance with SNBS and Minergie standards.

More about Madaster