Swiss Prime Site Ag · SIX:SPSN
Swiss Prime Site — Investor Day (October 2023)
52 slides from Swiss Prime Site's investor day presentation, Oct 25, 2023
Slide 1: 2023 Capital Markets Day
2023 CAPITAL MARKETS DAY Z U R I C H , O C T O B E R 2 5 TH 2 0 2 3
Slide 2: Welcome
WELCOME A warm welcome, we are looking at a diverse programme 9:00 Management Presentations including Q&A 10:15 Coffee Break 10:30 Site Visit Müllerstrasse 11:30 Short walk to Jelmoli Building 12:00 Site Visit Jelmoli 12:30 Lunch at Jelmoli Restaurant Sopra 14:00 Wrap up 2023 CAPITAL MARKETS DAY 2
Slide 3: Agenda
Agenda 1. STRATEGIC UPDATE 2. PORTFOLIO & PIPELINE 3. ASSET MANAGEMENT 4. FINANCE 5. SUSTAINABILITY 2023 CAPITAL MARKETS DAY 3
Slide 4: Strong operating environment continues
STRATEGIC UPDATE Strong operating environment continues Transactions Lettings Valuations Momentum in transaction market Increasingly strong demand for central Downside from discount rate effects continues to increase, albeit still at locations and high quality expected to continue lower levels
Slide 5: We have achieved a lot over the last 12 months
STRATEGIC UPDATE We have achieved a lot over the last 12 months… Jelmoli Repositioning Strategic Wincasa sold at CHF 146 m profit Growth in Assets under Management CHF 340 m assets sold at profit Portfolio Rent growth through successful lettings and indexation Key projects delivered to p
Slide 6: Evolving to a pure play Real Estate company
STRATEGIC UPDATE Evolving to a pure play Real Estate company Earnings profile 2018 Today 2025 target 20% ~20% 33% 45% 7% Sale of Tertianum Repositioning of (CHF 204 m profit) Jelmoli ~80% 11% 73% Sale of Wincasa Asset management 10% (CHF 146 m profit) growth 1% Rental Income & Development As
Slide 7: The transformation over the last few years implies
STRATEGIC UPDATE The transformation over the last few year implies… Less Operational Risk 0% of earnings from «operations» Less Financial Risk <40% LTV Premier Asset Quality 80%+ rated Most Prime Higher Efficiency <20% cost ratio 2023 CAPITAL MARKETS DAY 7
Slide 8: Our platform strategy strives in the current environment
STRATEGIC UPDATE Our platform strategy strives in the current environment Property Portfolio Asset Management CHF 13.1 bn 5%+ CHF 8.2 bn 25%+ Investment Properties Return on Equity AuM Return on Equity We have OUTPERFORMANCE CATALYSTS… Active Asset Management Development Expertise Access to Capi
Slide 9: Strategic priorities for our two Business Pillars
STRATEGIC UPDATE Strategic priorities for our two Business Pillars One Platform Property Portfolio Asset Management › Rent growth › Gain market share Indexation Vacancy reduction › Broaden investor base Reversion › Strategic landmark projects Jelmoli, Zurich › Seize pipeline opportunities
Slide 10: Agenda
Agenda 1. STRATEGIC UPDATE 2. PORTFOLIO & PIPELINE 3. ASSET MANAGEMENT 4. FINANCE 5. SUSTAINABILITY 2023 CAPITAL MARKETS DAY 10
Slide 11: We drive growth through active ownership and developments
PORTFOLIO & PIPELINE We drive growth through active ownership and developments 1 We have a premier commercial real estate portfolio in Switzerland’s most active business centres 2 Our tenant base is very resilient and they value our high-quality & central letting space Our successful capital recycli
Slide 12: Portfolio focus on business centres and larger properties
PORTFOLIO Portfolio focus on business centres and larger properties CHF 13.1 bn NW Switzer- land Zurich & Property portfolio ( FY 2022: CHF 13.1 bn ) 14% Central Switzerland 53% 168 Berne 9% Number of properties ( FY 2022: 17 6) 1.7 million m 2 Lake Rental space Geneva ( stable ) 20% Map source: adm
Slide 13: Central office as the key segment and broad tenant diversification
PORTFOLIO Central office as the key segment and broad tenant diversification Portfolio by Types of Use¹ Broad Tenant Diversification as at 30.06. 2 0 23 as at 30.06. 2 0 23 Other 100% Total approx. 2’000 tenants Parking Residential 1% 3% 5% Hotel/Gastro 7% Office 43% Assisted Living ~54% 6% ~ 47% 7%
Slide 14: Significant wins in current letting activity especially in office
PORTFOLIO Significant wins in current letting activity especially in office Vacancy Rate Significant Recent Tenant Wins in % ( Con solida t e d) 6.7% 6.4% 6.1% 5.5% 5.2% 5.4% 5.1% 4.7% 4.8% 4.7% 4.7% 4.7% 4.6% 4.4% 4.3% 0.8% Strategic – for developments 4.1% 3.3% Operational 2015 2016 2017 2018 2019
Slide 15: Annual Tenant Survey – Location & Quality even more important
PORTFOLIO Annual Tenant Survey – Location & Quality even more important Overall 7.0 / 10 beat benchmark › Good location / quality with 84% the absolute main reason for a contract extension (#2 Long-term tenancy 65%) 77% 84% +7% pts Relevance Location & Quality 2022 2023 Score beat benchmark Action I
Slide 16: We continue to successfully execute our capital recycling
PORTFOLIO We continue to successfully execute our capital recycling… 1 2 3 Funding pipeline Optimising Mix¹ Enhancing Locations & Sales in CHF m Sustainability 2019 2020 2021 2022 H1 2023 86 Non-core 126 Office Low BREEAM Rating Sales 212 230 168 YTD 317 Retail CHF 1.0 bn Logistics/Infrastructur
Slide 17: …with our portfolio rating enhancing further
PORTFOLIO …with our portfolio rating enhancing further Portfolio Market Matrix Wüest P ar tn er as of 30.06 . 2 0 23 high 2% 83% Quadrant I: 83% of portfolio value of portfolio value › classified as «top properties» by Wüest Partner Quadrant IV: 14% of portfolio value › Excellent location quality; p
Slide 18: Destination Jelmoli – Zurich, Seidengasse
PIPELINE Destination Jelmoli – Zurich, Seidengasse Building & Vision ∙ Iconic Jelmoli building from 1898 to sustain its distinctive character evolving to a highly-frequented office, retail and recreational destination ∙ High flexibility for types of use with several main entrances and the potential
Slide 19: Destination Jelmoli | Vision
PIPELINE Destination Jelmoli | Vision 1 Activation of the roof top 2 Hybrid uses 3 Green courtyards 2 4 Enhancement of urban space 3 5 1 Plaza 6 Activation of the facades 7 Opening up the basement 9 8 Vertical access 4 9 Sustainability 8 5 7 6 2023 CAPITAL MARKETS DAY 19
Slide 20: Destination Jelmoli | Flexibility of the retail and office floors
PIPELINE Destination Jelmoli | Flexibility of the retail and office floors 2023 CAPITAL MARKETS DAY 20
Slide 21: Destination Jelmoli | Activation top floor
PIPELINE Destination Jelmoli | Activation top floor 2023 CAPITAL MARKETS DAY 21
Slide 22: New Potential: Grand Passage – Geneva, Rue du Rhône/Molard
PIPELINE New Potential: Grand Passage – Geneva, Rue du Rhône/Molard Building & Vision ∙ Historic building complex around Rue du Rhône, Rue du Marché and Place du Molard with a 300-year history in Geneva’s central business district ∙ Potential extension und repositioning in primary shopping and busin
Slide 23: Grand Passage | Vision
PIPELINE Grand Passage | Vision Goals and fields of action 1 Renovation of the Molard building 2 Disassembly Rhône 54 3 Renovation main building 4 Renovation and addition of storeys 5 Redesign of the inner courtyard & roof top / terraces 1 2 3 4 5 2023 CAPITAL MARKETS DAY 23
Slide 24: Grand Passage | Vision
PIPELINE Grand Passage | Vision 2023 CAPITAL MARKETS DAY 24
Slide 25: Grand Passage | Vision
PIPELINE Grand Passage | Vision Activation and planting of the inner courtyard Development of the rhythm of the openings in relation to the use (retail/office) Facades made of stone material, colours in harmony with the historic facades 2023 CAPITAL MARKETS DAY 25
Slide 26: Agenda
Agenda 1. STRATEGIC UPDATE 2. PORTFOLIO & PIPELINE 3. ASSET MANAGEMENT 4. FINANCE 5. SUSTAINABILITY 2023 CAPITAL MARKETS DAY 26
Slide 27: We see great opportunities for our Asset Management business
ASSET MANAGEMENT We see great opportunities for our Asset Management business 1 We have built an Asset Management platform with critical scale and independent, first class Real Estate expertise 2 The Swiss Real Estate Asset Management landscape will change over the next few years as consolidation, p
Slide 28: Our product suite today
ASSET MANAGEMENT Our product suite today Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – CHF 3.1 bn AuM CHF 4.0 bn AuM CHF 1.1 bn AuM SPSS-developed Investment Funds For Investment Foundations For Third Party Clients ∙ Open- and closed-ended investment ∙ Asset m
Slide 29: Diversified investments and complementary to own portfolio
ASSET MANAGEMENT Diversified investments and complementary to own portfolio Total Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – AuM 8.2 3.1 4.0 1.1 (CHF bn) Rental Income 288 106 140 42 (CHF m p.a., Jun 23 Run Rate) Residential Residential Residential Resident
Slide 30: Our success story based on Real Estate expertise
ASSET MANAGEMENT Our success story based on Real Estate expertise 10 in CHF bn 100% Despite challenging backdrop… 2021: 9 90% - Pandemic Acquisition Akara 8.2 8 7.7 80% - Interest rate regime change 7 70% - Banking crisis 6 5.7 60% 55% …SPSS has seen a steady growth in AuM, 5 46% 49% 50% owing to ou
Slide 31: Convincing product outperformance on the secondary market
ASSET MANAGEMENT Convincing product outperformance on the secondary market… SPA Immobilien Schweiz Akara Swiss Diversity Property Fund PK SPSS Investment Fund Commercial – last 3 years – – since inception – – since inception – 115 145 105 140 100 135 110 130 95 125 90 120 105 115 85 110 80 105 100 1
Slide 32: Based on strong operating performance track record (I/II)
ASSET MANAGEMENT … based on strong operating performance track record (I/II) Benchmarking cash flow and appreciation yields of our investment products for pension funds 7.00% 6.9% 6.00% Legend 5.00% 3.4% Yield on value 2.5% change 4.00% 2.7% 0.8% 1.0% 1.6% 1.9% 2.2% 2.4% 0.6% 1.6% 3.00% 0.2% 1.3% Ca
Slide 33: Based on strong operating performance track record (II/II)
ASSET MANAGEMENT … based on strong operating performance track record (II/II) Benchmarking cash flow and appreciation yields of our commercial investment fund 7.00% Legend 6.00% 5.00% 4.1% 1.7% 3.1% Yield on value 0.1% change 4.00% 2.0% 1.1% 1.4% 1.6% 2.3% 0.7% 1.3% 2.3% 3.00% 4.7% 4.4% Cashflow yie
Slide 34: We see opportunities outside our traditional playing field
ASSET MANAGEMENT We see opportunities outside our traditional playing field Partnership investments Distribution partnerships Theme-based funds «Brown Building» 2023 CAPITAL MARKETS DAY 34
Slide 35: Agenda
Agenda 1. STRATEGIC UPDATE 2. PORTFOLIO & PIPELINE 3. ASSET MANAGEMENT 4. FINANCE 5. SUSTAINABILITY 2023 CAPITAL MARKETS DAY 35
Slide 36: We will deliver earnings growth
FINANCE We will deliver earnings growth 1 Our strong balance sheet gives us operational flexibility 2 We will deliver substantial and high-quality topline growth through our pipeline 3 We will become more effective and efficient as a pure play real estate company 4 Third party capital will be accret
Slide 37: Transformation of our funding structure since 2020
FINANCE Transformation of our funding structure since 2020 2020 Today LTV (net) 41.9% 39.7% - 2% pts Unencumbered Asset Ratio 28% 85% + 57% pts Secured Financing Ratio 53% 14% - 39% pts Rating None (Credit Agency) A3 / stable (Moody’s) Market Access Only Swiss Swiss & European Sustainability-linked
Slide 38: Stable funding structure with broad market access
FINANCE Stable funding structure with broad market access A3 Financing Parameters Rating – Moody’s in CHF m stable 2022 H1 2023 Consolidated Financing Structure Investment properties 13’088 13’064 86% unsecured of which unencumbered 86% 85% Unsecured Secured bonds mortages Financial liabilities 5’09
Slide 39: We will deliver growth and enhanced quality of earnings
FINANCE We will deliver growth and enhanced quality of earnings Rental Income in CHF m Illustrative offset ~80 ~500 ~40 ~438 ~50 50-60 LFL Development Incremental Growth Net Sales Deliveries financing Jelmoli offline: ‘25/26 costs Assumption: maturities refinanced at 2.25% 2023 5 year VISION run rat
Slide 40: We aim to deliver leading returns through efficiency and mix
FINANCE We aim to deliver leading returns through efficiency and mix Topline Growth Higher Operating Efficiency – Optimized Mix – EPRA Cost Ratio Revenue Split RoE Targets 19.4% ~2% pts >15% Asset 25%+ Management Real Estate 5%+ Segment 5 year VISION Developments as the key growth driver 2023 5 year
Slide 41: Agenda
Agenda 1. STRATEGIC UPDATE 2. PORTFOLIO & PIPELINE 3. ASSET MANAGEMENT 4. FINANCE 5. SUSTAINABILITY 2023 CAPITAL MARKETS DAY 41
Slide 42: Continuous progress in our sustainability strategy
SUSTAINABILITY Continuous progress in our sustainability strategy 1 2 3 4 Certification Strategy Climate Neutrality 2040 Circular Economy Green Finance Framework ~ 100% 40% Milestone project Müllerstrasse CHF 425 m of space by end of 2023 of space with Green Leases 2022: 75% 90% concrete recycled Fi
Slide 43: Best-in-class GRESB Rating
SUSTAINABILITY Best-in-class GRESB Rating STANDING INVESTMENTS DEVELOPMENT 2023 CAPITAL MARKETS DAY 43
Slide 44: Climate neutrality in our property portfolio by 2040
SUSTAINABILITY Climate neutrality in our property portfolio by 2040 CO 2 -Reduction Path Green Leases agreed for 40% of space in k g CO 2 -eq/ m2 a Milestones in 2023 24 ∙ Replacement of heating with renewable energy in Geneva, Rue du Rhône 22 and Route de Malagnou Roadmap kg CO2-eq / m2a 20 ∙ Purch
Slide 45: Our people differentiate us and they enjoy our workplace
SUSTAINABILITY Our people differentiate us and they enjoy our workplace Inaugural participation with excellent results 87 81 67 61 Great Place to Work Overall satisfaction Trust Index Average «Taking everything into account, Average of all Trust Index™ statements I would say this is a great place to
Slide 46: We create living spaces
WE CREATE LIVING SPACES 2023 CAPITAL MARKETS DAY 46
Slide 47: We confirm our guidance for the full year
OUTLOOK We confirm our guidance for the full year Financial FFO stable¹ LTV < 40% Operational Vacancies < 4.1% AuM ~ 8.2 bn Asset Management 1 On a comparable basis excluding Wincasa. 2023 CAPITAL MARKETS DAY 47
Slide 48: Key messages today
KEY MESSAGES Key messages today 1 With a leading pure-play Real Estate Platform we can strive in the current environment 2 Through our platform approach we will deliver industry leading returns 3 We have a prime portfolio and specifically the space that is in demand 4 Our pipeline differentiates us
Slide 49: Disclaimer
Disclaimer Details published in this presentation are for information purposes only and should not form the basis for any investment decisions or recommendations to purchase Swiss Prime Site AG securities. The content of this presentation was diligently researched and compiled. However, Swiss Prime
Slide 50: Analyst and Investor Contact
Analyst and Investor Contact Florian Hauber Investor Relations Head Treasury and Investor Relations Business: +41 58 317 17 64 Media Relations Mobile: +41 78 600 81 40 Business: +41 58 317 17 17 florian.hauber@sps.swiss communications@sps.swiss Agenda Headquarters Zurich Office Geneva Office Annual
Slide 51: Appendix
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Slide 52: 2022 figures restated for IFRS5 «Discontinued operations»
APPENDIX 2022 figures restated for IFRS5 «Discontinued operations» Consolidated income statement Funds from operations (FFO) 01.01.– 01.01.– 01.01.– Deconso- 31.12.2022 01.01.– Deconso- 31.12.2022 31.12.2022 lidation continuing 31.12.2022 lidation continuing in CHF m Total group Wincasa operations i