Swiss Prime Site: On the way to becoming an investment platform

The aim is to offer investors "an optimal opportunity to invest directly or indirectly in real estate or products based on it from one of Europe's leading real estate companies," as Swiss Prime Site put it on the occasion of its Capital Markets Day on October 26, 2021.

The real estate company expects the services segment to gain in importance as a result of the expected growth of Swiss Prime Site Solutions. Currently, the company manages around CHF 3.4 billion in assets under management and a client project pipeline of around CHF 600 million. Additional growth of around CHF 1 billion will come from client mandates over the next few years, according to Swiss Prime Site.

From November, Swiss Prime Site Solutions also wants to build up the business with fund products for qualified investors; a first fund is to be launched then. To this end, a seed portfolio of around 80 million will be sold to the fund, Swiss Prime Site announced. Exclusivity has been agreed for a pipeline amounting to 180 million, it adds. The target volume of the initial issue is thus 200 to 250 million, and annual growth of 300 million is envisaged over the next few years. In the medium term, the fund is to be floated on the stock market.

Despite pandemic: demand for office space does not collapse

In the wake of the Corona pandemic, many observers had speculated that demand for office space would fall. Swiss Prime Site does not see this confirmed. A tenant survey in the summer of 2021 showed that the vast majority of tenants expect demand for space to remain constant or grow slightly, writes the real estate company. Customers would focus even more on prime locations and high flexibility of space. Topics such as health and sustainability have also gained in importance, with many tenants wanting to reduce their CO2 emissions directly and indirectly. Swiss Prime Site itself also wants to be CO2-neutral by 2040 at the latest.

Sales and investments in development projects

Against the backdrop of Swiss Prime Site's decision to focus its real estate portfolio on 12 to 13 billion in 2020, properties worth 140 million were sold in the first half of 2021 and the proceeds reinvested in the development pipeline. This approach allows not only the realization of potential sales profits, but also the leveraging of significant valuation reserves from the projects for the coming years, says Swiss Prime Site. In addition, this strategy can be implemented without higher debt or capital increases. In the coming years, the real estate company also plans annual investments and sales of around 200 to 250 million euros each.

For the 2021 financial year, Swiss Prime Site expects growth in rental income of 2.5% compared with the previous year on a like-for-like basis. At the operating result (EBIT) level before revaluations, an increase of over 5% on a like-for-like basis is expected. The vacancy rate is expected to remain at 4.6% to 4.8%.