Business

Dear Share­holders, dear Readers,

The past year has shown just how well we can use our potential. With the further focussing of our portfolio and the acquisition of Fundamenta, we have undertaken important strategic steps to complement our two-pillar strategy – and achieved good results.

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The past year has shown just how well we can use our potential. With the further focussing of our portfolio and the acquisition of Fundamenta, we have undertaken important strategic steps to complement our two-pillar strategy – and achieved good results.

 «We can make use of more potential in our own portfolio,
design and market spaces more intelligently,
and plan and implement projects more ambitiously.»

A year of growth

In the 2024 financial year we achieved record rental income of CHF 464 million, which equates to an increase of 6% compared with the previous year. This success was due to our consistent focus on our core competency: the development and letting of real estate creating stakeholder value. Through new developments and sales, we have concentrated our portfolio on the major economic hubs and focused our company  consistently on real estate. This has made Swiss Prime Site more agile and had a positive effect on our results. We can make use of more potential in our own portfolio, design and market spaces more intelligently, plan and implement projects more ambitiously and, overall, deploy our valuable resources – personnel and capital – even more effectively. This meant that Swiss Prime Site achieved a significant increase in its operating result per share – measured against the key figure typical for the sector, funds from operations (FFO) – from CHF 4.05 in the previous year to CHF 4.22. This increase is even more impressive considering that we also carried out sales for around CHF 345 million and interest expenses increased markedly through refinancing after the negative interest rate environment – as they did for all real estate companies. Our strong financial position means we can propose a higher dividend of CHF 3.45 at the Annual General Meeting on 13 March 2025 (CHF 3.40 in the previous year).

Positive macroeconomic environment

The environment for real estate in Switzerland has improved considerably over recent months. We enjoy very stable political conditions, the multi-faceted economy is growing constantly at around 1% measured using GDP, and we continue to see immigration by highly qualified specialists who contribute to growth in a wide variety of sectors. Moreover, financing conditions are also improving thanks to the base rate reductions by the Swiss National Bank. At the same, lower returns from alternative asset classes mean that investment in real estate is once again becoming considerably more attractive to our investors and customers – the institutional investors. These are all factors from which Swiss Prime Site can profit as a real estate company. There is a particular increase in demand for commercial spaces in the metropolitan regions – and especially the centres – and for modern, resource-efficient buildings. In other words, in precisely those areas in which we have focused our portfolio. On top of that, people need places to live, which is the clear investment focus of our Asset Management segment.

Asset Management: complementary residential profile

The platform character of our two-pillar strategy – our own portfolio for commercial properties, and Asset Management which is oriented to residential properties – becomes evident in this economic environment. We are able to apply our expertise broadly, and that includes advising additional investors who wish to invest fresh capital. In 2024 we were able to raise over CHF 600 million in new capital, and we are investing this in attractive real estate acquisitions and project developments for our customers. In this context the acquisition of specialist asset manager Fundamenta in the first half of the year proved especially valuable, with investor interest currently higher than it has been for many years. At Swiss Prime Site we are now responsible for over CHF 26 billion in real estate assets – CHF 13.1 billion in our own portfolio and CHF 13.3 billion in Asset Management – making us the largest independent real estate company in Switzerland.

«We are able to apply our expertise broadly, and that includes
advising additional investors who wish to invest fresh capital.»

Strategic and operational milestones

In 2024 we achieved further key milestones. For example, the Jelmoli department store bid a dignified farewell to its customers under the motto «Merry Memories». The long lead time meant that, with very few exceptions, all employees have found new career paths. In parallel with this, we secured a tenant with a long-term orientation, Manor, which will continue to operate a department store at this historic site. With the building permit in hand, we can start redeveloping the iconic building in spring, so the people of Zurich will be able to enjoy an institution fit for the future. In the field of sustainable development, we are constantly setting standards for energy efficiency in operations and for resource use in new-build projects. Our CO2 reduction pathway continues to outperform the trajectory toward our net zero target for 2040. For the «JED Campus» new build in Zurich-Schlieren, which is targeted at the life sciences sector, we have reduced the use of primary raw materials by 75% and employed a new architectural concept that dispenses with heating and cooling systems. It is regarded as a showcase project for the circular economy.

We have maintained our conservative financing strategy with a high equity base, and have both financed our investments and reduced debt with our profitable sales totalling CHF 345 million. At the end of the year, our loan-to-value ratio (LTV) stood at 38.3%. This is well below our internal guideline, which allows us strategic flexibility for the future.

In the area of corporate governance, we have succeeded in continually strengthening the Board of Directors with new expertise in the areas of sustainability and international management, giving the Board an even broader foundation. The strategic transformation of Swiss Prime Site has shown how important an agile, well-balanced and independent Board of Directors is to the fulfilment of our shareholders’ mandate.

The Company was founded in 1999, and we were privileged to celebrate our 25-year anniversary last year in the presence of numerous partners and investors. Working for such an innovative and dynamic business with an expert, motivated team fills me with great pride. On behalf of the entire Board of Directors, I would like to thank you, our stakeholders, for your trust and collaboration. Together with our tenants, customers, employees and partners, we aim to continue creating sustainable value for stakeholders – with living spaces that meet the expectations of a modern society.

Ton Büchner
Chairman of the BoD

«Our strategy is bearing fruit.»

The positive market environment in 2024, significant rent increases and efficiency gains in the Real Estate area along with high investor appetite in Asset Management helped Swiss Prime Site close the year with very good results. The Executive Board with René Zahnd, CEO, Marcel Kucher, CFO and Anastasius Tschopp, CEO of Swiss Prime Site Solutions, share their perspectives.

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«Our strategy is bearing fruit.»

The positive market environment in 2024, significant rent increases and efficiency gains in the Real Estate area along with high investor appetite in Asset Management helped Swiss Prime Site close the year with very good results. The Executive Board with René Zahnd, CEO, Marcel Kucher, CFO and Anastasius Tschopp, CEO of Swiss Prime Site Solutions, share their perspectives.

Swiss Prime Site

René (RZ), how was the 2024 financial year from your view?

RZ: The market environment for real estate in Switzerland started the year on a solid footing and gradually improved as the year progressed. We can point to very good results with significant growth in earnings: Funds from operations per share (FFO I) increased by 4.2% to CHF 4.22. Many areas contributed to this result. We increased rental income by 6% to CHF 464 million with the first-time letting of several new buildings and also achieved growth of 3.3% on a like-for-like basis. In our own property portfolio, we achieved efficiency gains with our focussed building stock and further streamlined our portfolio with sales. The other strategic business area – Asset Management – was dominated by the acquisition of the Fundamenta fund assets of CHF 4.2 billion in the first half of the year. This was followed by major capital increases for various products, especially in the second half of the year. The renewed investment appetite on the part of investors has had an extremely positive effect on our range of products in Asset Management in 2024. In summary, I am very pleased to see that our two-pillar strategy is bearing fruit.

 

Marcel (MK), how do you gauge the market conditions in general?

MK: The Swiss National Bank implemented several interest rate cuts over the past year, which has made investments in real estate even more attractive. We anticipate that the popularity of real estate as an investment category will endure and even increase. Currently, yields on Swiss government bonds are not much more than 0%. Real estate continues to yield around 3% or more, depending on the location and category, and offers protection against inflation with linked rents. This differential makes the investment class attractive in two ways. First, as an investment class, real estate tends to attract yield oriented investors. Second, favourable external financing can further enhance real estate yields. This effect applies across all areas: pension funds and insurance companies buy more properties with their new assets, private investors can get better financing again and investors of all types are buying more indirect investment products.

 

And of course what’s always most important for real estate – we are experiencing solid economic growth with a growing population and close to full employment. This means that office space and residential properties are in demand.

 

A good segue: what does that mean for letting?
RZ: Basically, growing demand is meeting supply that is trending downward. We see this in particular in the number of new building permits in the country, which has been falling for a long time. If we look one level lower, we see that there is particular demand for very good locations and quality and/or modern buildings, while properties in outer areas with poor connections and lower quality are harder to let. In the retail market we have a more positive outlook than before; it seems to have reached a certain balance between online and offline sales, and areas frequented by the public are in demand once again. We also see this in the rise in turnover rent at our locations. Some people are even talking about a «retail renaissance», although personally I would not go quite so far. In our Infrastructure segment, where we let laboratories and production spaces primarily to the life sciences sector, the completed extensions on the Stücki Campus in Basel were a great success. The residential market, which we cover through our Asset Management business, continues to develop very well, with steady population growth in the metropolitan regions. In this area we are seeing that investment from pension funds in particular is on the up again, and they are looking for investment products.

 

What happens next, after the closure of Jelmoli?
RZ: Jelmoli will close its doors for good at the end of February 2025, and naturally we view this with mixed feelings. The closure of the Jelmoli department store after around 190 years brings an impressive business story to an end, which is emotionally challenging for its employees and loyal customers. We are very conscious of this. On the other hand, the spirit of Jelmoli, this department store steeped in tradition, with its long-term focus and sustainable repositioning, will be preserved. So we are very happy to have received the enforceable building permit for the building modification in November, following extensive planning and preparatory works. And if we look a little further into the future, we are delighted that the Manor Group will start moving into the new Jelmoli building in 2027 and will operate a flagship store of around 13 00 m², spread over three floors. With Manor, as well as ultra-modern office space, a fitness club and an inviting rooftop terrace, the Jelmoli building will become a magnet for Zurich, filling it with new life with an appeal that reaches far beyond the city limits. I am personally convinced that our project will make the city centre noticeably more attractive. And I am proud that we will be making a valuable contribution to the positive future development of the inner city.

René Zahnd, CEO Swiss Prime Site ©KEYSTONE/Gaetan Bally

«The renewed investment appetite on the part of ­investors has had an extremely positive impact on our range of Asset ­Management products in 2024.»

René Zahnd, CEO Swiss Prime Site

Jelmoli is probably the most prominent construction project. How are the other projects progressing?
RZ: As a major developer in Switzerland, we currently have a construction volume of around CHF 170 million planned for 2025. On top of that, we have a large project pipeline of an additional CHF 2 billion for subsequent years, which holds great potential. Last year we managed to complete Stücki Park in Basel and the JED new build in Schlieren, with ultra-modern spaces of 70 000 m2 and 15 000 m2 respectively, and handed them over to tenants. The construction project «Maaglive» on the Prime Tower site, with its residential and cultural focus, was somewhat drawn out due to appeals. However, we are confident that here too we will ultimately receive the enforceable building permit. There are major development projects in the wings for 2025 as well. In Zurich-Albisrieden, our goal is to deliver a new example for the development of a sustainably blended neighbourhood. We are creating two replacement new builds for service and commercial use in particular. In the near future, this campus will see social enterprises together with urban commerce and the food industry moving in and stimulating the economy of this neighbourhood within urban residential districts.

The office and retail areas continue to make up the bulk of the portfolio at Swiss Prime Site. Will that remain the case, or are you planning changes?
RZ: Our medium-term goal is for the office area to make up around 50% and retail spaces around 20% of our portfolio. Together with infrastructure, in particular city logistics, laboratories and retirement living, that covers the service-based Swiss economy pretty well. It provides us with a diversified mix, which on the one hand keeps overall risk low, and on the other hand allows us to realise further growth. Our strategy is to let modern office spaces in very good locations. In the coming years, we will be generating substantial stakeholder value with this strategy through developments, particularly in our own portfolio. We have major repositioning projects with a considerable portion of office space planned, for example the Jelmoli building in Zurich and the «Grand Passage» in Geneva.

Let’s talk about the transaction market. What’s your view there?
MK: Activity continually increased in the market in the past year, with the result that we sold 23 properties with proceeds of CHF 345 million. As far as finances are concerned, I can also report that this result was 3% over the last appraisal values – for me, a reassuring indication that the valuers assess the market fairly but conservatively. We must say that we ourselves were somewhat surprised at the momentum towards the end of the fourth quarter, when we had a sales volume of over CHF 200 million. We knew that many funds had sufficient capital after new capital increases and that buyers’ interest in the processes would increase sharply overall, but we had not anticipated the speed. From our perspective, the properties and transactions on offer are becoming larger – and so the buyer mix is changing in the direction of institutional investors. In 2024 we were once again a net seller in the market, and only purchased one very small property for consolidation purposes, as we fundamentally review acquisitions against strict requirements for yields and fit with the portfolio. But with the sustained activity on the transaction market, we have a more optimistic view of 2025 in relation to acquisition opportunities, which we will continue to review very selectively.

Anastasius (AT), let’s look at the Asset Management area. How has the business progressed overall, and in particular with the Fundamenta acquisition?
AT: I’m very satisfied with developments in the Asset Management area over recent years. With the acquisition of Fundamenta we became the largest independent real estate asset manager in Switzerland, by a considerable margin. As at the end of the year, we had CHF 13.3 billion in assets under management. Last year, income totalled CHF 71 million. Looking back, I think that with the interest rate cuts by the SNB, the Fundamenta acquisition was particularly well-timed. Strong investor appetite last year meant that we were able to secure customer funds of CHF 600 million by means of capital increases – with a strong increase in momentum in the second half of the year. The demand for our expertise and our offerings accelerated this.

How do you view the Swiss market for real estate asset managers?
AT: In recent years we have seen consolidation in the asset management landscape, and launching new real estate products has become more challenging. The challenges have increased significantly, particularly in the area of sustainability and from a regulatory perspective, coupled with more complex building permit processes. Our customers have correspondingly higher expectations in relation to professionalism. The rising interest rates in 2022 and 2023 also forced out a number of providers, as it had become harder to generate yields. It remains to be seen whether the latest interest rate cuts will give rise to new competitors again despite the hurdles.

Which products and services can investors at Swiss Prime Site Solutions benefit from?
AT: In comparison with the previous year, an even broader range of products as a result of the Fundamenta acquisition, which complemented our product range with pure residential products and bespoke developments. There are also real estate funds in Germany in our mix, providing Swiss investors with access to the German real estate market. We manage products that are regulated by FINMA or the OPSC1 and geared towards pension schemes. In addition, private investors – amongst others – have the option of making liquid investments in Fundamenta’s listed real estate company with almost exclusively residential properties, and qualified investors can participate in a fund with a commercial focus. But we don’t just offer investment products – we also offer investment-specific services such as advisory mandates for third-party clients.

With the acquisition of the Fundamenta Group, you now have a presence in Germany, as you mentioned. What are your near-future plans for this market?
AT: We have two products in Germany. One of these is also open to qualified Swiss investors. The German market is particularly interesting for investors after the interest rate turnaround and the correction, because Germany also has insufficient residential stock and has built far too little over recent years. So we aim to further strengthen this area of Asset Management and offer clients exciting opportunities.

René, from the group perspective, how will the two segments complement each other in future?
RZ: Following the demerger of the non-­strategic units Wincasa, Tertianum and the Jelmoli retail business and our accompanying focus on the core competency of real estate, we are now operating with a very streamlined structure. Moreover, we can offer our services efficiently and use synergies even better with economies of scale from the group – the keyword here is «platform». We know how the real estate market works, which property strategy is the best fit and how construction projects are implemented. And naturally this expertise is also shared internally between the two segments where it makes sense. We have gained additional expertise with our new colleagues at Fundamenta, who have already been successfully integrated. In the process we simplified infrastructure duplications, for example by maintaining just one joint location, and have already fully integrated the IT.

«We must say that we ­ourselves were somewhat surprised at the momentum towards the end of the fourth quarter.»

Marcel Kucher, CFO Swiss Prime Site

Marcel, let’s talk about the financing situation. How do you see it?
MK: Almost every day I remind everyone how important it was to move our financing strategy to an unsecured basis and to gear ourselves more towards the capital market. For our portfolio sales, we can proceed at twice the speed as we are not faced with complicated security transfers, and when it comes to new financing we have seen credit spreads widening at the banks. Swiss Prime Site can access a large number of financial instruments – from green bonds and privately placed loans to the classic loan. This means we can always optimise the conditions. Overall, the interest rate moves by the SNB have resulted in massive reductions in the cost for new financing. Here we are talking around a 1% point through the base interest rate alone. So the issue of debt has become a much lower priority for our investors and in the market as a whole. Independent of the market situation, we continue to abide by our targets. We have a resilient property portfolio and that is reflected on the liabilities side too, with a conservative loan-to-value (LTV) ratio of under 40%.

There is currently a lot of talk about a future population of 10 million for Switzerland. How do you view this development?
RZ: Population growth is a reality, and we have to make the best of it. Above all, we should be creating more supply for the increasing demand now. The real estate industry has been trying to do this for a long time by creating more living space through densification, further development, renovations, adding storeys and new builds. On the other hand, there are long-overdue issues that Switzerland needs to address as soon as possible. Along with better spatial planning that promotes blended districts with residential and commercial parts, we also need, for example, to standardise and shorten permit processes, radically rethink appeal options – today almost anyone can lodge an objection at no cost – and finally regulate noise protection under a uniform basic regulation, in which the legal decisions also follow a clear logic. It is only by improving these framework conditions that we will succeed in making adequate spaces for living, working and leisure available for a growing population. It is crucial for the whole environment to remain investor-friendly, because without investment there is no building – or at least not in the volume we need.

What sustainability results for its properties can Swiss Prime Site report for 2024?
RZ: Last year, we continued to consistently implement our sustainability strategy. In essence, the strategy consists of sustainable development and construction as well as the sustainable use and operation of properties. Circular economy in construction and climate neutrality in operation constitute the most important pillars here. A total of 97% of eligible spaces now have environmental certificates by external assessors, and we have managed to reduce the emissions intensity of our portfolio by a further 13%. Consequently we are now sitting at 7.7 kg CO2 / m2 adjusted for weather, which is well below the linear target pathway to net zero in 2040. Last year many tenants opted for green leases – that is, rental agreements with mutual obligations on climate-­friendly measures – meaning that we are currently at 76% of our total area. The target for the end of 2025 remains 100%. For 2025, we are planning further important projects based on circular principles. On the «YOND Campus» in Zurich, an existing building is deliberately being retained, and the building components and materials that arise from demolition are being stringently reviewed for reuse – on the site or elsewhere in the portfolio. We do that with all our projects, incidentally.

In summary, where are the opportunities and challenges for 2025 at Swiss Prime Site?
RZ: I anticipate that the Swiss economy will make further progress again in 2025, supported in particular by the domestic economy with services and consumption. For our broadly diversified portfolio with over 2 000 tenants, this means brisk demand for modern, high-quality office space in central locations, and also that our retail spaces will be well-frequented by consumers. We are efficiently structured and offer rental spaces and investment products in almost all areas of the real estate sector. This means we are well-positioned for 2025 – and for the years that follow.

In the medium term, at Swiss Prime Site we view the sustained population growth as an opportunity, not a problem. We offer spaces for living, working and leisure, and are committed to using the existing supply more sustainably by creating attractive living spaces for everyone where possible. That is our mission, and we are ideally positioned for it!

«I’m very satisfied with the progress of the Asset Management area over recent years.»

Anastasius Tschopp, CEO of Swiss Prime Site Solutions

1 Occupational Pension Supervisory Commission (OPSC)

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Continuous increase in earnings with strong momentum

Swiss Prime Site can look back on an extremely successful 2024 financial year. With significant growth in rental income, we achieved a marked increase in earnings despite higher financing costs. Success in letting our new developments and marked rental increases for renewed leases were the main drivers. In addition, we achieved efficiency gains in the property portfolio and further portfolio streamlining through the sale of properties. This enabled us to significantly reduce the expense ratio and further improve the portfolio. In Asset Management, we also profited directly from the marked increase in institutional investors’ appetite for real estate, with a range of capital increases together totalling around CHF 600 million. This segment is already generating almost 10% of consolidated EBITDA – and it is trending strongly upwards.

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Swiss Prime Site can look back on an extremely successful 2024 financial year. With significant growth in rental income, we achieved a marked increase in earnings despite higher financing costs. Success in letting our new developments and marked rental increases for renewed leases were the main drivers. In addition, we achieved efficiency gains in the property portfolio and further portfolio streamlining through the sale of properties. This enabled us to significantly reduce the expense ratio and further improve the portfolio. In Asset Management, we also profited directly from the marked increase in institutional investors’ appetite for real estate, with a range of capital increases together totalling around CHF 600 million. This segment is already generating almost 10% of consolidated EBITDA – and it is trending strongly upwards.

Over the past financial year 2024, our key priority was implementing our strategy of consistent focus on our core competency in real estate. We achieved a significant increase in the operating result (measured in FFO I – funds from operations) of 4.2% to CHF 4.22 per share [previous year: 4.05]. This was primarily driven by a significant increase in rental income of 6% in our own property portfolio and the marked increase in income in the Asset Management segment. The acquisition of the Fundamenta Group with its managed property portfolio of around CHF 4 billion increased the entire assets under management (AuM) of our group to over CHF 26 billion [previous year: CHF 21.5 billion]. This makes us the largest independent real estate asset manager in Switzerland by a considerable margin, with investment vehicles that cover targeted strategies in both the commercial and residential segments.

Continuously high rental growth in the Real Estate segment

Income from rental of properties rose in the reporting year by 5.7% to CHF 463.5 million [438.3 in the prior-year period], which equates to like-for-like growth (EPRA LfL) of 3.3% [4.3% in the previous year]. Of this growth, around 1.4% points are attributable to real rent increases (i.e. exclusive of indexation and reduction of vacancies), which points to the high rent potential in the portfolio. Particular contributions to the overall growth in earnings came from the following properties: in Zurich, the newly let office building on Müllerstrasse and «Fifty-One», the office building acquired in 2023; in Geneva the new Alto office building in Lancy; and in Basel the life sciences-oriented Stücki Campus with its four extensions. Furthermore, an increase in turnover rent was achieved in the hotel, retail and parking areas. New letting and reletting achievements in 2024 with reputable companies such as Swisscom, Prada, Zürcher Kantonalbank and insurance company Vaudoise will in turn contribute to rental increases in the years to come. The vacancy rate at the end of 2024 was 3.8%, 0.2% points below the previous year [4.0%]. At the end of the year, the average term of our rental contracts (WAULT) was stable at a comfortable 4.8 years [5.0]. The portfolio optimisations of recent years have reduced the number of properties. As well as raising the average quality level within the portfolio, this also allows us to manage the portfolio much more efficiently. We succeeded in further optimising operating costs through more effective management of maintenance expenses and by centralising purchases such as electricity and consultancy services, and thus reduced the cost ratio (measured against the EPRA cost ratio) to 17.3% [18.3%]. Overall, the operational EBITDA of the Real Estate segment (excluding revaluation and sales) increased markedly in 2024 to CHF 389.2 million [370.6].

Operating Income

in CHF million

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Attractive portfolio with revaluation through higher net revenues

At the end of 2024, our portfolio boasted a stable value of CHF 13.1 billion at fair value [13.1 in the previous year]; the share of development properties was CHF 0.2 billion [0.9]. At the end of the financial year, the building stock numbered 139 properties [159] and had maintained its highly diverse tenant profile with around 2 000 tenants. At the end of the reporting year, we recorded revaluations in our portfolio of CHF +113.7 million [-250.5], of which CHF +15.9 million was attributable to the development properties. This positive trend reflects the optimised portfolio quality coupled with a turnaround in the Swiss real estate market, where we saw significantly more transactions and stronger interest in real estate investments in 2024. As the average discount rate applied by the independent property valuer Wüest Partner remained unchanged, this change is purely due to operational improvements: higher rates for new rental contracts, lower vacancies, and reductions in property costs. We will continue to streamline the portfolio, consistently focusing on new, centrally situated, sustainable properties in prime locations. Last year, we once again closed a number of sales to finance our development projects (capital recycling). Over the course of the year, and particularly in the second half, we sold 23 properties with a fair value of CHF 345 million, making a profit of 3% above the latest appraisal values. We consistently pursued portfolio optimisation here, with an average size of approx. CHF 17 million and the primary use being retail – meaning a focus on larger properties and a trend towards fewer retail spaces. We only made one small acquisition for our own portfolio last year due to a lack of attractive prospects among the properties available on the market.


EPRA NTA

in CHF per share

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FFO I
(continuous operations)

in CHF per share

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Proposed dividend

in CHF per share

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Asset Management: growth through new capital raises and Fundamenta acquisition 

Last year proved positive for Asset Management on two counts. First, our acquisition of specialist asset manager Fundamenta considerably increased our assets under management (AuM), and second, we achieved strong organic growth with various new capital raises. With an asset base of CHF 4.2 billion transferred in the Fundamenta acquisition, Swiss Prime Site Solutions has advanced to become the largest independent real estate asset manager in Switzerland; managed assets increased to CHF 13.3 billion as at the end of 2024 [8.4 as at the end of 2023]. In the reporting year, we were able to grow organically by around CHF 1 billion through acquisitions. The return to a positive market environment for capital raises, with higher investor appetite after a number of interest rate cuts by the Swiss National Bank, was a decisive turning point in the development of new money. This was particularly evident in the case of new client money and contributions in kind for our projects, specifically the Akara Swiss Diversity Property Fund PK, the Swiss Prime Investment Foundation and the Fundamenta Group Investment Foundation. In fact we were able to carry out two capital increases for each of these three products.

In total, the capital increases amounted to over CHF 600 million, which also resulted in a significant growth in revenues. As at the end of 2024, revenues were CHF 70.8 million [49.7]. The proportion of recurring income, at 75% [77%], was somewhat lower than in the previous year, as there was more transaction-related income in 2024.

Significant economies of scale saw a disproportionate rise in EBITDA of 47% to CHF 42.0 million [28.6], which yielded an EBITDA margin of 59%. Initial synergy effects from the Fundamenta acquisition bore fruit in the second half of the year; we succeeded in reducing operational costs by merging two existing locations in Zug, through natural fluctuation in the workforce and by centralising overarching functions such as finance, IT and communication. 

Operating profit and FFO I increase significantly

The consolidated operating result before depreciation and amortisation (EBITDA) was CHF 415.1 million [389.7 in the prior-year period]; this was excluding revaluations and sales and based on IFRS 5 (i.e. without taking into account the pro rata result of Wincasa, which was sold in the previous year). This operating result includes a loss of CHF –6.9 million [+1.5] by the retail business of Jelmoli. In its final year of operation, Jelmoli worked with successively higher discount campaigns and achieved a lower contribution margin, which was not wholly offset by lower salary and material costs. With the above-mentioned efficiency gains in the Real Estate segment and the lower operating costs at Jelmoli, consolidated operating expenses amounted to CHF 257.0 million [269.4] which – despite the integration of Fundamenta – was lower than at the 2023 year-end.

Total net financial expenses increased to CHF 86.6 million [76.3] due to higher refinancing costs compared with expiring financing. Due to a significantly higher year-end share trading price, this figure includes non-cash fair value adjustments of our convertible bonds of CHF 13.2 million, which increased expenses in the reporting period. Actual interest expenses were correspondingly lower.

The cash-effective result per share (FFO I, funds from operations) rose by 4.2% to CHF 4.22 [4.05] – in a combination of significantly improved operating profit contribution and higher financing costs. The intrinsic value (EPRA NTA) per share was CHF 99.27 [99.68]. Based on the higher result, the Board of Directors will propose an increase of the dividend to CHF 3.45 per share to the Annual General Meeting on 13 March 2025; this equates to 82% of FFO I. This would make the resulting dividend yield 3.5% as at year-end.

Green refinancing with board access

In 2024, we once again maintained our conservative financing strategy with a strong equity base. Interest-bearing financial liabilities excluding leasing amounted to CHF 5.3 billion as at the balance sheet date [5.4 as at the end of 2023], once again drawn from a variety of sources in the banking and capital market. The average term to maturity decreased slightly, to 4.3 years [4.6]. The average interest rate as at the balance sheet date rate fell to 1.1% [1.2%]. Of our financing volume, 87% was based on fixed interest rates [87%]. The quota of our unencumbered assets rose slightly to 87.4% [86.1%], as we repaid expiring mortgages with liquidity and did not refinance. As at the end of 2024, we had unused, contractually secured credit facilities available in the amount of CHF 1.1 billion, which together with the unencumbered assets gives us very high operational and financial flexibility. In the reporting year, we succeeded in extending these credit facilities totalling CHF 2.6 billion at national and international banks by a further year at unchanged terms, which underscores our exceptionally good access to the banking market. Over the past year, we profited from a highly receptive capital market and successfully placed a total of CHF 435 million in bonds with a sustainability focus as part of our Green Finance Framework. In March we issued a green bond in the amount of CHF 250 million at 1.8%, which matures in 2030, and an additional green bond in the amount of CHF 185 million at 1.65% with a five-year term to maturity. By year-end, a marked reduction in the loan-to-value ratio (LTV) of the property portfolio was achieved, down to 38.3% [39.8%], due in particular to profitable property sales. As forecast in the first half of the year, this brought us in well below the target value of 40%, which gives us additional room for manoeuvre in the coming years. 

Optimistic outlook for 2025

We are optimistic about 2025: the Swiss real estate market is currently experiencing singular momentum. This is underpinned both by stronger investor appetite based on the significant interest rate cuts of recent months and by continued positive economic growth. With our two business areas – «Real Estate» focussing on prime commercial properties and «Asset Management» focussing on residential properties – we can draw the utmost in balanced benefits from this impetus. 

In the Real Estate segment, rental income in 2025 will be temporarily impacted by the elimination of the Jelmoli rent of around CHF 20 million net (EBITDA basis), taking into account intercompany rent offsetting and operating losses. By contrast, sustained rent increases and newly let properties should have a positive influence on the result. For 2025, we expect higher rental income in particular from the JED new builds in Schlieren and the Bern 131 building, as well as further letting of Alto Pont-Rouge in Geneva. Overall, we anticipate a further reduction in the vacancy rate to under 3.8% in 2025. Nevertheless, additional rents cannot completely offset the absence of Jelmoli. However, we will lay the foundations for further long-term rental growth in 2025 with the Zurich construction projects in the Jelmoli building and «YOND Campus». Consequently, we are maintaining our medium-term rental income target of CHF 500 million from 2028 onwards (i.e., after the reopening of the Jelmoli building). Given the increased momentum in the transaction market, we anticipate more opportunities for our own portfolio once again in 2025. As ever, we will review these opportunities selectively where we sense a fit with our portfolio strategy and the prospect of earnings accretion.

In the «Asset Management» area, we will further expand our leading position as an independent real estate specialist with the addition of the Fundamenta brand. Our range  of funds and services allows us to comprehensively cover almost all investor and property types. In 2025 we expect a continuation of the increased investor interest we have seen since late 2024, which should bring further significant growth with new capital increases and transactions. This will augment our strong base with recurring income from fees for management, construction and development. We anticipate assets under management of over CHF 14 billion by the end of 2025 – an increase of around 
CHF 1 billion. 

At the group level, we will keep the LTV under 39%. We expect to largely offset the lack of Jelmoli letting and anticipate an FFO I per share of between CHF 4.10 and 4.15. In the medium term – and in particular following the reopening of the Jelmoli building at the end of 2027 – we see significant potential of over 10% in the FFO.

Comparison of key figures

Swiss Prime Site

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Swiss Prime Site Immobilien

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Swiss Prime Site Solutions

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