2018 was a successful year for Swiss Prime Site, with earnings growth of 5.1%. Operating income rose by CHF 59.3 million to CHF 1 214.1 million year-on-year. Both the core real estate business and the Services segment performed well. Real estate increased its earnings by 6.4%. Real estate-related services grew by 4.8% year-on-year. At CHF 11.2 billion, the value of the property portfolio grew by 5.4%. At the same time, net yield decreased slightly to 3.6%. The vacancy rate fell significantly from 5.2% to 4.8%. A CHF 5.4 million or 1.8% increase in profit to CHF 310.9 million was reported. Swiss Prime Site anticipates stable or improving performance in the most important parameters for 2019 and over the medium term.
Once again, the Swiss economy performed well in 2018. Switzerland competed successfully in the global marketplace as a location for many international businesses, and the real estate market benefited from this. Interest rate movements remained stable. Swiss Prime Site performed well under these conditions, with growth and good results to report in both segments for 2018.
Swiss Prime Site invested extensively in its core real estate business. The stock of first-class properties was expanded with major purchases. The Company also streamlined its portfolio by selling minority interests in properties, trading them for attractive sole ownership of other properties. In addition, the Company forged ahead with development projects and new construction projects. The pipeline was expanded with new ventures. Focussing the Company’s strategy and business model on successful management of the portfolio of existing properties and its own developments once again proved successful. In the past financial year, Swiss Prime Site finalised new leases or contract renewals on around 190 000 m2 (12% of rental floor space) within the property portfolio. During the course of 2018, several transactions were concluded, which fine-tuned the portfolio of existing properties and developments further: In January, Swiss Prime Site purchased a completely leased site with great potential for further development in Regensdorf near Zurich. This was followed mid-year by the purchase of the «West-Log» construction project in Zurich, the majority of which was already under lease. The foundation stone for this pioneering urban logistics property was laid in autumn. In Monthey (canton of Valais), Swiss Prime Site acquired land for the construction of a property for the Tertianum group company. A fully leased office property at Beethovenstrasse 33 in the heart of Zurich – near Paradeplatz and the lake – is a valuable new addition to the portfolio. The «Weltpost Park» residential project in Berne was sold as planned. The project will be handed over to the buyer ready for occupancy at the start of 2020. In the last quarter of 2018, Swiss Prime Site and the majority owner of the «Sihlcity» urban entertainment centre in Zurich agreed on a swap of the co-ownership share of 24.2% in exchange for three attractive properties. They are fully leased and complement the portfolio of existing properties perfectly. Two of the properties are located in Zurich, and one in Worblaufen in the canton of Berne, where Swiss Prime Site already held a co-ownership share of 49%. In addition, the Company divested itself of two smaller properties in Berne and Dietikon in December.