SPS on a stable course
At its Capital Markets Day in Zurich, SPS Swiss Prime Site presented current figures on business development and gave an insight into the corporate strategy. Switzerland's largest real estate company focuses on its core business of real estate, portfolio management and the project pipeline.
"Market conditions for prime office and commercial properties are intact," SPS Swiss Prime Site AG stated at its Capital Markets Day (Oct. 23) in Zurich. In particular, the rental market in the Zurich and Geneva regions, which are important for the company, is in "a healthy and robust condition". Demand for high-quality space in the Zurich region, for example, is more positive than it has been since 2010.
In its core real estate business, SPS currently has a portfolio of CHF 11.5 billion, and the company expects to be able to grow further by the end of 2019. Within the portfolio, the "Office" use currently holds the lion's share with 44%, which is expected to grow further in the future with the transformation of the Stücki Park (Basel) and JED (Schlieren) sites as well as YOND (Zurich).
SPS management also provided information on new developments at the subsidiaries Jelmoli, Wincasa, Tertianum and Swiss Prime Site Solutions in the Services segment. With the opening of the Pallas Clinic and the new "Beauty World", Jelmoli has expanded its range of lifestyle products.
Wincasa continued to expand its new digital platform "streamnow" and the Tertianum network was enlarged to over 80 locations through new openings and smaller acquisitions. Swiss Prime Site Solutions extended its asset management contract with Swiss Prime Investment Foundation until 2023 at an early stage.
Large project pipeline
Swiss Prime Site's project pipeline comprises an investment volume of 2.0 billion; this includes 400 million in reserves. In total, there are 15 projects, half of which are under construction and half under development. This is expected to generate an additional 83 million in rental income by 2024.
Due to the increase in online retailing and the resulting rise in the need for fine distribution centers in urban locations, SPS management sees great potential in logistics properties in particular and has two such sites under construction, Espace Tourbillon and West-Log.
In addition, the company invests in promising properties with high space flexibility (YOND Zurich, Alto Pont-Rouge Lancy) and climate-friendly and sustainable construction methods (JED).
Swiss Prime Site is convinced that it will meet its financial targets for the 2019 financial year. In addition, the company expects further significant revaluations in the second half of 2019 due to the successful portfolio management, which "should be above the value of the first half of the year".
SPS management is also confident that it will be able to complete the targeted sale of the Tertianum subsidiary by mid-2020. (bw)
