Swiss Prime Site Ag · SIX:SPSN
Swiss Prime Site — H1 2024 Earnings Presentation
56 slides from Swiss Prime Site's earnings presentation, Aug 22, 2024
Slide 1: Results First Half-Year 2024
RESULTS FIRST HALF-YEAR 2024 ZURICH, 22 AUGUST 2024
Slide 2: Agenda
Agenda 1. KEY MESSAGES 2. PROPERTY PORTFOLIO 3. FINANCE 4. ASSET MANAGEMENT FOCUS 5. OUTLOOK Results – first half-year 2024 2
Slide 3: Overview – first half of 2024 (1/2)
KEY MESSAGES Overview – first half of 2024 (1/2) Strategic milestones Portfolio ▪ Acquisition of the real estate division of Fundamenta Group ▪ Slight increase in the value of the property portfolio to with a portfolio of approximately CHF 4.2 billion CHF 13.1 billion despite sales; revaluations of
Slide 4: Overview – first half of 2024 (2/2)
PO K EY R TMFEOSLSI O AGES Overview – first half of 2024 (2/2) Operating performance Financing ▪ Significant increase in rental income by +3.7% LfL to record ▪ LTV of 40.9% – slight temporary increase due to dividend in H1; high of CHF 232 million majority of sales tactically planned in H2; year-end
Slide 5: Key figures – first half of 2024
PO K EY R TMFEOSLSI O AGES Key figures – first half of 2024 Absolute Per share RENTAL AUM EBITDA¹ PROFIT¹ FFO I FFO II 2 EPRA NTA INCOME A SSE T M A NA GE M ENT in CHF million in CHF million in CHF in CHF in CHF REAL ESTATE in CHF billion in CHF million 12.7 232.0 101.40 99.95 218.9 204.7 198.0 2.03
Slide 6: More transactions, turning point for valuations
KEY MESSAGES More transactions, turning point for valuations Transactions Lettings Valuations ▪ Activity in the transaction market ▪ Continued strong demand, especially for ▪ Discount rates unchanged on a portfolio increases further with falling interest central locations combined with a high basis,
Slide 7: We create living spaces
WE CREATE LIVING SPACES
Slide 8: Agenda
Agenda 1. KEY MESSAGES 2. PROPERTY PORTFOLIO 3. FINANCE 4. ASSET MANAGEMENT FOCUS 5. OUTLOOK Results – first half-year 2024 8
Slide 9: Portfolio focus on economic centres and larger properties
PROPERTY PORTFOLIO Portfolio focus on economic centres and larger properties 13% Northwestern 54% Zurich and Central Switzerland Switzerland 9% CHF 13.1 billion Berne Property portfolio ( FY 2023: CHF 13.1 billion) 20% Lake Geneva 154 Number of properties ( FY 2023: 159) 1.7 million m 2 Rental space
Slide 10: Office most important type of use and strong tenant diversification
PROPERTY PORTFOLIO Office most important type of use and strong tenant diversification Portfolio by type of use¹ Diversification of tenants as at 30.06. 2 0 24 as at 30.06. 2 0 24 Other 100% Total approx. 2 000 tenants Parking Residential 1% 3% 5% Assisted living 6% Office 44% Hotel/gastronomy ~52%
Slide 11: Active portfolio management consistently progressed
PROPERTY PORTFOLIO Active portfolio management consistently progressed Portfolio market matrix Wüest Par tner as at 01.07 . 2 0 2 4 high 1% 84% New/repositioned properties of portfolio value typical l y in quadr an t I › Paradiso-Lugano, assisted living (development) Property quality 1% 14% Sold pro
Slide 12: Vacancies at record low through successful property management
PROPERTY PORTFOLIO Vacancies at record low through successful property management Vacancy rate › Major new tenants in % 6.7% › Major contract extensions 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% 4.1% 4.0% Strategic for 1.1% developments 3.6% 2.5% Operational 2015 2016 201
Slide 13: Balanced lease expiry profile of rental contracts and stable WAULT
PROPERTY PORTFOLIO Balanced lease expiry profile of rental contracts and stable WAULT Lease expiry of rental contracts as at 30.06. 2 0 24 WAULT 4.9 years 16% 15% 13% 11% 9% 7% 7% 6% 5% 5% 4% 2% <1 year >1 >2 >3 >4 >5 >6 >7 >8 >9 >10 Open-ended Note: Graph excludes internal rental agreement with Jel
Slide 14: Successful continuation of our capital recycling strategy
PIPELINE Successful continuation of our capital recycling strategy 1 2 3 Funding pipeline Optimising mix¹ Enhancing locations & sustainability Sales in CHF million H1 2019 2020 2021 2022 2023 2024 Office − Non-core 53 Sales 126 2024 more Office − Low 212 sales 230 259 tactically Retail Retail BREEAM
Slide 15: Developments offering considerable planning flexibility
PIPELINE Developments offering considerable planning flexibility Project pipeline as at 30.06.2024 › Pipeline: in CHF million − High densification potential and reserves of usable space Reserves within existing portfolio and ongoing «refreshing» of land ~ 70 bank through acquisitions committed in pl
Slide 16: Projects completed and projects under construction
PIPELINE Projects completed and projects under construction First tenants moved in Alto Pont-Rouge Stücki Park II, new build JED new build BERN 131 Lancy Basel Schlieren Berne Ongoing tenant fit-out Ongoing tenant fit-out To schedule To schedule Construction status Pre-letting rate 80% 90% 100% 65%
Slide 17: Selection of planned projects – central locations with attractive use
PIPELINE Selection of planned projects – central locations with attractive use Destination Jelmoli YOND Campus Grand Passage Route de Meyrin 49 Steinenvorstadt maaglive Zurich Zurich Geneva Geneva Basel Zurich Legally valid Legally valid Building regulations Standard Standard Standard district plan
Slide 18: Snapshot: Destination Jelmoli, Zurich
PIPELINE Snapshot: Destination Jelmoli, Zurich Development project and concept ∙ Zurich Seidengasse near Bahnhofstrasse. Iconic Jelmoli building from 1898 is being redeveloped into a mixed- use building complex ∙ Two original atriums will be reactivated, and the rooftop terrace will be redesigned fo
Slide 19: Snapshot: Tertianum Residenza Du Lac, Lugano-Paradiso
PIPELINE Snapshot: Tertianum Residenza Du Lac, Lugano-Paradiso Development project and concept ∙ Two buildings by the lake, 1.5 kilometres from the historic city centre of Lugano − Lakeside building with 32 high-end apartments (including 2 penthouses) with lake views − Mountainside building with a s
Slide 20: 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 almost 100% 70% Milestone project 435 million certifiable area¹ Green Leases JED new build, Schlieren CHF 2023: 94% 2023: 55% Reduction of
Slide 21: We create living spaces
WE CREATE LIVING SPACES
Slide 22: Agenda
Agenda 1. KEY MESSAGES 2. PROPERTY PORTFOLIO 3. FINANCE 4. ASSET MANAGEMENT FOCUS 5. OUTLOOK Results – first half-year 2024 22
Slide 23: Income: further growth in rental income despite sales
FINANCE Income: further growth in rental income despite sales Consolidated operating income in CHF million H1 2023 H1 2024 ∆ y-o-y ▪ CHF 13 million increase in rental income (+6%) despite preceding sales; mainly driven bynew build projects, lower vacancy rates and Rental income 218.9 232.0 +6% impro
Slide 24: Lower costs due to portfolio optimisation and operational improvements
FINANCE Lower costs due to portfolio optimisation and operational improvements Consolidated operating expenses in CHF million H1 2023 H1 2024 ∆ y-o-y ▪ Slightly lower real estate costs despite significantly higher rental income, thanks to portfolio optimisation and operational Real estate costs -33.
Slide 25: Growth in operating profit
FINANCE Growth in operating profit Group profitability in CHF million H1 2023 H1 2024 ∆ y-o-y ▪ Revaluations of CHF +30.4 million (0.2% of the portfolio of CHF 13.1 billion) across the portfolio Total operating income 307.6 317.4 − Revaluation gain due in particular to improved new leases and Revalu
Slide 26: Operating profit driving FFO growth
FINANCE Operating profit driving FFO growth Funds from operations I (FFO I) EPRA NTA (Net Tangible Assets) in CHF per shar e in CHF per shar e Reconciliation FFO I in CHF million H1 2023 H1 2024 ∆ y-o-y Adjusted EBITDA 101.40 99.95 2.03 (excl. revaluations) 188.0 202.0 +7.5% 1.94 Cash-effective inte
Slide 27: Real Estate: growth from existing properties and developments
FINANCE Real Estate: growth from existing properties and developments Rental Income Bridge¹ EPRA like-for-like (LfL) growth in CHF million Developments 241.7 3.7% 0.6% Vacancy reduction / Other Acquisitions 7.2 Capital Indexations 228.0 recycling Δ Existing Redevelopments 3.5 1.3% properties¹ 4.7 -
Slide 28: Asset Management segment: strong profit growth with Fundamenta
FINANCE Asset Management segment: strong profit growth with Fundamenta Asset Management performance in CHF million FY 2023 H1 2023 H1 2024 ∆ y-o-y ▪ H1 2024 including Fundamenta pro rata Management fees 23.6 11.6 15.2 +31.3% ▪ Increase in recurring management fees due to larger asset base Constructi
Slide 29: Assets increased through investments and improved leases
FINANCE Assets increased through investments and improved leases Property portfolio growth (fair value) ▪ Total 154 properties (2023: 159) in CHF million − Increased efficiency through portfolio consolidation (portfolio clusters, larger individual buildings) − Rejuvenation and location optimisation
Slide 30: Broad financing base with continuous access
FINANCE Broad financing base with continuous access Financing parameters A3 Rating – Moody’s in CHF million stable Dec 2023 H1 2024 Financing structure, consolidated Investment properties 13 075 13 147 87% unsecured of which unencumbered 86% 86% Financial liabilities (Real Estate Unsecured Secured 5
Slide 31: Continuous rollover of maturities, high liquidity reserve
FINANCE Continuous rollover of maturities, high liquidity reserve Liquidity Debt Maturity Profile Cash and cash at nominal values in CHF million equiva l en t s and Placement of CHF 435 million in H1 via two committ e d cr edit lines in CHF million green bonds with an interest rate of 1.80% 1'689 an
Slide 32: We create living spaces
WE CREATE LIVING SPACES
Slide 33: Agenda
Agenda 1. KEY MESSAGES 2. PROPERTY PORTFOLIO 3. FINANCE 4. ASSET MANAGEMENT FOCUS 5. OUTLOOK Results – first half-year 2024 33
Slide 34: Acquisition of Fundamenta, critical scale in asset management
ASSET MANAGEMENT Acquisition of Fundamenta, critical scale in asset management Swiss real estate asset managers¹ Rationale Combined portfolio ✓ Economies of scale with critical scale Products Funds (including SICAV) 50 25 Investment foundations Expansion of ✓ SIX-listed vehicles 20 45 investor base
Slide 35: Asset Management: leading product suite
ASSET MANAGEMENT Asset Management: leading product suite Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – +0.8 +2.2 +1.3 vs. FY 2023 vs. FY 2023 vs. FY 2023 CHF 4.0 billion AuM CHF 6.2 billion AuM CHF 2.5 billion AuM Regulated collective investment products Real
Slide 36: AuM development and New Money
ASSET MANAGEMENT AuM development and New Money Capital raises in several Swiss Prime Site Solutions vehicles in H1 Assets under management Capital development¹ in CHF billion in CHF million – without leverage – New Money Contributions in kind 12.7 595 508 8.4 7.7 241 5.9 270 508 196 50 354 153 220 4
Slide 37: Asset Management: complementary investment profile
ASSET MANAGEMENT Asset Management: complementary investment profile Total Fund Management Asset Management Real Estate Advisory – Discretionary – – Fiduciary – AuM 12.7 4.0 6.2 2.5 (CHF billion) Rental income 431 151 219 61 (CHF million p.a., per 30.06.2024) 10% Residential 9% Residential 9% Residen
Slide 38: Investment product benchmarking
ASSET MANAGEMENT Investment product benchmarking Investment products with attractive performance compared to the competition; conservative investor base with a focus on minim ising risk Performance of investment products in 2023 Fund performance in 2023 Legend Focus on residential (peer group KGAST)
Slide 39: Investment Fund Commercial («IFC») – fund profile
ASSET MANAGEMENT Investment Fund Commercial («IFC») – fund profile Overview Key figures (as at 31.03.2024) ▪ Core+ commercial properties with potential for value growth from portfolio Fair value: CHF 433 million development ▪ Region Switzerland Cash flow return: 5.5% (annualised) ▪ Income distributi
Slide 40: Akara Swiss Diversity Property Fund PK («ADPK») – fund profile
ASSET MANAGEMENT Akara Swiss Diversity Property Fund PK («ADPK») – fund profile Overview Key figures (as at 31.12.2023) ▪ Existing properties (min. 80%) as well as development and construction Fair value: CHF 2.7 billion projects (max. 20%) with an investment strategy of residential and commercial (
Slide 41: Fundamenta Group Wohninvest Deutschland («FGWI») – fund profile
ASSET MANAGEMENT Fundamenta Group Wohninvest Deutschland («FGWI») – fund profile Overview Key figures (as at 31.12.2023) ▪ Residential properties in the mid-rent segment in fast-growing major regional Fair value: CHF 0.7 billion cities / top 7 cities in Germany and their metropolitan areas ▪ Income
Slide 42: We create living spaces
WE CREATE LIVING SPACES
Slide 43: Agenda
Agenda 1. KEY MESSAGES 2. PROPERTY PORTFOLIO 3. FINANCE 4. ASSET MANAGEMENT FOCUS 5. OUTLOOK Results – first half-year 2024 43
Slide 44: Increase in 2024 guidance
OUTLOOK Increase in 2024 guidance Financial targets FFO I CHF 4.15–4.20 LTV < 40% per share previously 4.10–4.15 Real Estate Portfolio Operational targets Vacancies ~ 3.8% AuM ~ 13 billion previously < 4.0% Asset management previously > 9 billion Results – first half-year 2024 44
Slide 45: Medium-term targets
OUTLOOK Medium-term targets Real estate portfolio Asset Management 2028 2027 Rental Income CHF >500 Mio. AuM CHF >16 Mrd. Cost Ratio <16% EBITDA CHF >75 Mio. Results – first half-year 2024 45
Slide 46: Q&A
Q&A
Slide 47: Analyst and investor contact
Analyst and investor contact Media contact Florian Hauber Patrick Djizmedjian Head Treasury and Investor Relations Head Corporate Communications Business: +41 58 317 17 64 Business: +41 58 317 17 42 Mobile: +41 78 600 81 40 Mobile: +41 79 642 88 60 florian.hauber@sps.swiss patrick.djizmedjian@sps.sw
Slide 48: 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 49: Appendix
q \ N “N © N SWISS PRIME SITE APPENDIX |
Slide 50: Two strong pillars with resilient business models
APPENDIX Two strong pillars with resilient business models Property Portfolio Asset Management (External Capital) 1% › High-quality properties in the 30% › Discretionary and fiduciary best locations in Switzerland 44% fund management as well as 41% › Development pipeline with advisory services 59% b
Slide 51: Our investment proposition
APPENDIX Our investment proposition Largest listed Swiss real estate company; high quality property portfolio of more than CHF 13 billion fair value; 100% free float and high share liquidity Leading Complementary Asset Management franchise with CHF 13 billion Assets under Management Long-standing su
Slide 52: Continuous improvement in ESG ratings
APPENDIX Continuous improvement in ESG ratings Corporate C «PRIME» AAA 11.2 Low Risk A- Unchanged + 1 level -1.9 points Unchanged Jul 2024 Jul 2024 Jun 2024 Sep 2023 Property Portfolio Asset Management Standing Invest. Development «Investment Manager» 89 Points 97 Points Policy Governance & Strategy
Slide 53: Significant reduction in emissions intensity – 2040 net zero target
APPENDIX Significant reduction in emissions intensity – 2040 net zero target CO 2 -Reduction Path Major initiatives in k g CO 2 /m2 ▪ Heating replacements 28 ▪ Portfolio disposals with gas/oil heating 26 ▪ Improvement of energy mix 24 (e.g. higher proportion biogas and better district heating mix) R
Slide 54: 100% free float and high liquidity of the shares
APPENDIX 100% free float and high liquidity of the shares Major Shareholders Registered Share Data UBS Fund First day of trading April 5, 2000 Management 12.7% # of shares outstanding 77.3 million Free float 100% Blackrock ¹ ISIN CH0008038389 9.6% Ticker symbol SPSN Share class Registered shares Mai
Slide 55: Swiss economic environment
APPENDIX Swiss economic environment Economic Indicators Swiss Purchasing Managers’ Index (PMI) 2023 2024 2025 80 Indicating expansion Forecast Forecast 70 Real GDP 1.3% 1.2% 1.7% Selected components 60 Private consumption 2.1 1.3 1.4 Construction industry 50 -2.1 0.1 1.9 (Over- and underground) 44.7
Slide 56: Resilient Swiss economy with continuous employment growth
APPENDIX Resilient Swiss economy with continuous employment growth Employment Growth GDP Split Switzerland Inflation Indexed to 2000 Nominal, Q3 2023 – Pr oduction Per spect iv e Headl in e infla t ion y -o-y 140 ~USD 93’000 GDP per Head 10% Top 5 per OECD Other Pharmaceuticals and 8% Hospitality 5%