Financial commentary
Financial commentary
Swiss Prime Site delivered a strong operational performance and stable funds from operations (FFO I) per share in the 2025 financial year. Rental income in the Real Estate segment proved highly resilient, with only a slight decline despite the closure of Jelmoli and other major building modifications. The Asset Management segment benefited from an attractive market environment with strong investor appetite, resulting in a record inflow of new money and double-digit earnings growth.
In the 2025 financial year, the closure of Jelmoli in February, as planned, marked the successful conclusion of our strategic efforts to focus our activities on the real estate business. By concentrating on the two core segments – Real Estate and Asset Management − Swiss Prime Site has gained a clear profile and established itself in the market as a leading pure-play real estate company.
This sharper focus has enabled us to simplify our business model and to harness synergies. The strong operational development of our business and our growth in the 2025 financial year show that we are on the right track. With capital increases of approximately CHF 1.3 billion and a transaction volume of around CHF 2.4 billion, we have set new records across the Group. This is an impressive indication of the speed and agility with which we, as a Group, can react when we identify market opportunities that can benefit our investors.
Cash earnings (funds from operations, FFO I) rose by 3.2% year on year to CHF 336.3 million in 2025. FFO I per share remained stable year on year at CHF 4.22 and was significantly above our guidance range of CHF 4.10 to CHF 4.15 for the 2025 financial year. This increase was primarily driven by our attractive like-for-like growth and ongoing cost control.
Due to our strong operational and financial performance, a dividend increase of CHF 0.05 to CHF 3.50 per share will be proposed to the Annual General Meeting on 12 March 2026. This corresponds to a payout ratio of over 80% of FFO I.
It is particularly pleasing that our rental income in the Real Estate segment was almost unchanged year on year despite the temporary loss of significant rental income. The reduction in income resulting from the closure of Jelmoli in February and the associated building modifications, as well as extensive renovations of other large properties – such as Talacker and Fraumünsterpost in Zurich – were almost entirely offset by additional income.
We succeeded in concluding or extending new rental contracts, most of which will generate significantly higher rent than the existing lease agreements. This is testament to the quality of our portfolio and our customer focus, as well as the continuing demand for large, high-quality, flexible rental spaces in central locations.
Against this backdrop, rental income totalled CHF 456.8 million, down 1.4% compared to the previous year. On an EPRA like-for-like basis – i.e. excluding Jelmoli and other one-off effects – growth was 2.0% (previous year: 3.3%). This decline is solely attributable to reduced inflation-driven indexing effects. In real terms, we achieved actual rent increases of 1.6%.
Following a temporary increase in mid-2025, the vacancy rate had fallen to a new record low of 3.7% by the end of the year (previous year: 3.8%). The weighted average unexpired lease term (WAULT) increased to 5.3 years as at the end of 2025, exceeding the previous year’s figure of 4.8 years. The main drivers of this positive development were the extension of the rental contract with EY at Hardbrücke in Zurich by 10 years and the extension of rental contracts with Globus at three locations: Geneva (by 10 years), Lausanne (by 8 years) and Lucerne (by 7 years).
On the cost side, real estate expenses declined to CHF 62.5 million, compared to CHF 66.1 million in the previous year. However, personnel costs in the Real Estate segment increased by around 13.6% compared to 2024 (primarily due to the completion of the insourcing process initiated two years ago), and other operating expenses declined by 0.8%. Overall, operating expenses in the Real Estate segment fell by 2.4% year on year to CHF 94.2 million. The cost ratio, measured against the EPRA cost ratio, was 18.0%, compared to 17.3% in the previous year. This compares to the medium-term EPRA cost ratio target of less than 16% by the end of 2028.
The operating result before depreciation and amortisation in the Real Estate segment increased by 15.1% to CHF 590.3 million. The increase was mainly driven by higher revaluation gains compared to the previous year.
As at the end of 2025, the value of the portfolio in the Real Estate segment rose by 6.6% to CHF 13.9 billion. This increase in value is primarily due to targeted purchases of properties and to value-enhancing investments, as well as positive revaluation effects. The main drivers of the revaluation gains were higher rents for new rental contracts or lease extensions and the reduction in the average discount rate by 27 basis points to 3.77% (as determined by the independent valuer). This reduction reflects the strong momentum in the Swiss real estate market at present.
The funds raised in the February 2025 capital increase in the amount of CHF 300 million were invested in full by the end of the year in value-enhancing investments, as planned. The returns generated were significantly higher than the average portfolio returns. In specific terms, we acquired the former headquarters of SGS on Place des Alpes in Geneva. In Lausanne, we bought a multi-use office building near Prilly railway station in August and the headquarters of SIX Swiss Exchange in Zurich-West in December. We also succeeded in consolidating properties in a prime location on Zurich’s Bahnhofstrasse through an asset swap involving two properties in non-focus regions. These transactions underscore our focus on top-quality, centrally located office properties and show that we can make attractive, value-enhancing purchases even in a competitive market.
As part of the ongoing optimisation of our portfolio, we sold ten properties last year with a total market value of CHF 129.1 million. Taking these sales as well as purchases into account, the total number of properties as at the end of 2025 fell to 132, compared to 139 in the previous year. These sales mainly involved smaller properties, primarily in the retail sector, as well as a number of project developments where offices were converted into residential spaces. The aim was to sharpen our strategic focus on larger commercial properties in central locations as part of our capital recycling strategy.
This is where we see the most exciting rental potential. Consequently, we have increasingly focused our portfolio on these locations in recent years.
At the same time, we invested in pioneering development projects in Zurich in particular, including the extension to the YOND Cam-pus, the modification of the Jelmoli building and the renovation of the historic Fraumünsterpost building and the Talacker property.
Asset Management successfully continued on its growth path in the last financial year. Assets under management grew to CHF 14.3 billion at year-end, compared to CHF 13.3 billion at the end of 2024. The main drivers of this increase were record new issues and new money totalling CHF 1 billion. Demand was strong across the entire product range – not only because of the current attractive interest rate environment for real estate investments but also due to the compelling returns and investment focus of our products.
Of particular note is the development of our three flagship products: Swiss Prime Investment Foundation (SPIF), Akara Swiss Diver-sity Property Fund PK (ADPK) and the Fundamenta Group Investment Foundation, which focuses almost exclusively on residential property. In 2025, five capital increases were executed for these products, with a total of CHF 756 million of new capital subscriptions from investors. Some of these funds were profitably invested later in 2025, and there is a healthy pipeline of further purchases.
We also pursue an active capital recycling strategy in most fund vehicles – like with our own portfolio – meaning that we sell properties where we see limited scope for value creation in order to free up funds that can be invested in purchases or developments. This improves the performance of the product and provides additional returns for us as an asset manager.
We also reached an important milestone in December 2025 with the successful listing of our latest investment product – the commercial fund SPSS IFC – ideally positioning this attractive vehicle for further growth. The fund was included in the «SXI Real Estate Broad» and «SXI Real Estate Funds Broad» indices in December, which makes it attractive to other groups of investors.
Operating income in Asset Management increased by 18.1% year on year to CHF 83.6 million. The Group’s prudent approach is reflected in the fact that around two-thirds of revenue comes from recurring income in the form of management fees, and only one-third comes from transaction-related income such as buying and selling commission or distribution fees. Overall, transactions with a total volume of around CHF 1.7 billion were carried out in the past year.
With the first full-year integration of the Fundamenta Group, the Asset Management segment has firmly established itself as the leading independent asset manager for real estate solutions in Switzerland.
As a result of the full integration of the Fundamenta Group and strong organic growth, further synergies and economies of scale were achieved in the reporting year. Operating expenses in Asset Management slightly declined to CHF 32.8 million year on year and operating profit (EBITDA) increased by 30.7% to CHF 54.9 million with an EBITDA margin of 66%, compared to 59% in the previous year.
Swiss Prime Site generated Group-level operating income of CHF 553.4 million in the 2025 financial year, compared to CHF 663.4 million in the previous year. This decline is almost entirely attributable to the closure of Jelmoli in February 2025, when income from the retail business ceased. Excluding this effect, comparable operating income amounted to CHF 537.0 million, compared to CHF 523.5 million, representing growth of 2.6%.
At the same time, operating expenses decreased significantly – in particular due to the elimination of costs related to Jelmoli and additional efficiency gains in property management. Operating expenses declined by 42.3% to CHF 148.2 million year on year and by 2.8% on an adjusted basis excluding Jelmoli.
Operating profit (EBITDA), adjusted for revaluation effects and contributions from property disposals, amounted to CHF 410.1 million in 2025, only slightly below the previous year’s figure of CHF 415.1 million.
Thanks to lower financing costs and optimised tax expenses, consolidated net profit rose from CHF 382.5 million to CHF 382.5 million, an increase of 6.2%. Earnings per share including revaluation effects were CHF 4.79, compared to CHF 4.67 in the previous year. Excluding these effects, earnings per share were CHF 3.96, compared to CHF 3.78 in the previous year.
Swiss Prime Site has a strong equity base, large liquidity reserves and broadly diversified sources of financing. The solid and conservative nature of Swiss Prime Site’s financing structure was confirmed in 2025 when it was once again assigned a A3 rating by Moody’s.
In the Real Estate segment, the loan-to-value (LTV) ratio was 38.1% at year-end, compared to 38.3% in the previous year. Interest-bearing borrowed capital excluding lease liabilities amounted to CHF 5.6 billion as at the balance sheet date, compared to CHF 5.3 billion in the previous year. The average term to maturity of the financing was 3.9 years, compared to 4.3 years.
The increase in financing liabilities was mainly due to the growth of the portfolio as a result of property purchases, with further debt raised in addition to shareholders’ equity to maintain leverage. As part of our prudent financing strategy, we have further diversified our sources of financing and have made our capital base even more robust. In September 2025, we successfully issued a EUR 500 million Eurobond for the first time – on terms equivalent to those in the Swiss domestic market. The fact that the bond was heavily oversubscribed (EUR 4.3 billion in just three hours) at attractive terms underscores the trust that investors have in Swiss Prime Site and the high quality of our property portfolio.
We continued to move ahead with our long-term financing strategy in the 2025 financial year. We issued a total of CHF 777 million in the form of green bonds and succeeded in allocating the entire volume to new green acquisitions and to ongoing conversion projects.
Thanks to the current low interest rate environment and the risk-conscious variable component of financing, average financing costs fell significantly compared to the previous year. The average interest rate was 0.94%, compared to 1.10% the previous year.
«Swiss Prime Site is optimistic about the outlook for the 2026 financial year and expects conditions to remain favourable for the Swiss real estate market.»
Marcel Kucher
Swiss Prime Site is optimistic about the outlook for the 2026 financial year and expects conditions to remain favourable for the Swiss real estate market. Low interest rates in Switzerland provide attractive financing conditions, and in the absence of alternative investment opportunities of comparable value, demand for real estate is likely to remain high next year, supporting prices. In addition, the stable Swiss real estate market is perceived as a safe haven against the backdrop of ongoing geopolitical uncertainty, attracting institutional investors in particular.
Swiss Prime Site’s Asset Management segment is the main beneficiary of these market conditions. With a comprehensive, broadly diversified range of products and services, it offers private and institutional investors the opportunity to invest in residential and commercial real estate with attractive fixed returns. In the medium term, Swiss Prime Site aims to increase assets under management to more than CHF 16 billion by the end of 2027 and to generate EBITDA of more than CHF 75 million.
The company expects rental income in the Real Estate segment to rise significantly in 2026. The purchases made in 2025 will increase rental income by a total of around CHF 17 million.
The strengthening of our capital base will also allow for a slight reduction in planned property sales as part of our ongoing capital recycling strategy. As a result, Swiss Prime Site now expects to see a direct and indirect increase in rental income of almost CHF 20 million as a result of the capital increase beginning in 2026. In addition, vacancies are expected to continue to decline slightly. The medium-term goal of achieving rental income of CHF 500 million by 2028 is already within reach.
At Group level, the operating result is expected to increase further in the 2026 financial year. Swiss Prime Site also expects FFO I per share of between CHF 4.25 and CHF 4.30. As is the case each year, we are therefore aiming to distribute a stable or increased dividend. At the same time, we are targeting a stable debt ratio of less than 39%, and our risk appetite remains unchanged.