Swiss Prime Site pushes project developments

As the real estate company announced at its Capital Markets Day, it is focusing its development business not only on new buildings but also on modernization projects. The aim is to anticipate current megatrends as far as possible. As a result of this strategy, the current net yield in the portfolio should be improved and vacancy rates reduced at the same time. "Our focus on project developments based on a healthy project pipeline of more than CHF two billion gives us further momentum to grow under our own steam and to increase the profitability of our portfolio at an above-average rate in the future," says René Zahnd, CEO of Swiss Prime Site.

Swiss Prime Site's pipeline currently comprises around 20 projects in the "construction", "development" and "sale" phases. The projects "under construction" have an investment volume of around 600 million. In the process, more than 100,000 sqm of usable space will be newly constructed between 2017 and 2021. SPS expects an additional rental volume of 37 million and a net return of 5.4 percent (on cost).

In the area of projects "under development", investments in the order of 900 million are planned between 2018 and 2023. Swiss Prime Site expects further rental income of around 50 million from the resulting estimated rental space totaling around 130,000 sqm. The estimated net yield of the development projects is on average 4.6 percent (on cost).

Swiss Prime Site is currently in the process of selling two projects. The company expects the resulting inflow of funds to amount to around 300 million with a pre-tax profit in the region of 100 million (period: 2017-2021). In the view of the real estate company, there is further potential in its total of around 129,000 sqm of building land and utilization reserves.