Swiss Prime Site increases dividend slightly

Swiss Prime Site recorded a significant decline in operating income from CHF 663.4 million to CHF 553.4 million in the 2025 financial year. This was due to the loss of the retail business following the closure of the Jelmoli department store. Adjusted for this effect, operating income rose by 2.6% to CHF 537.0 million. Adjusted for Jelmoli, EBITDA increased by 3.4%.

FFO I constant, dividend higher

Due to lower financing costs and taxes, total Group profit excluding revaluation effects, disposals and deferred taxes rose by CHF 1.3% year-on-year to CHF 317.7 million. Cash earnings (FFO I) per share remained unchanged at CHF 4.22 per share, but increased in view of the higher number of shares as a result of the capital increase, and also exceeded the guidance for 2025 (CHF 4.10 to 4.15). This was mainly driven by lower financing costs and lower tax expenses. The dividend is set to increase by 5 centimes to CHF 3.50 per share.

Rental growth for new contracts

SPS reports a decline in rental income of CHF 1.4% to CHF 456.8 million for its own portfolio. «The reduction in income due to the closure of Jelmoli's retail business in February 2025 and the associated conversion, as well as further extensive renovations of large properties - such as Talacker and Fraumünsterpost in Zurich - were almost completely offset by additional income,» writes the management. On a comparable basis, an increase of 2.0% was recorded. According to the company, new rental agreements and renewals were mostly significantly higher than existing rents. While indexation contributed 0.4% to like-for-like rental growth, rent adjustments accounted for 1.3% and vacancy reductions for 0.3%. Important extensions were signed with EY at Hardbrücke in Zurich for a further ten years and with Globus at the locations in Geneva (for ten years), Lausanne (for eight years) and Lucerne (for seven years).

As already reported, SPS made significant acquisitions during the year with fresh funds from a capital increase of CHF 300 million - including leverage of CHF 550 million (more on this below). In contrast, ten properties were sold for CHF 129.1 million. This resulted in a profit of CHF 6.5 million.

Additional costs at Jelmoli

The Jelmoli department store, which has been under renovation since April last year, is reportedly pre-let at 50%. SPS currently estimates the investment costs for the conversion into a property with a focus on office use at CHF 210 million. This sum is secured by a contract with the general contractor. When the half-year figures were presented, an amount of CHF 150 million was still stated. According to Kucher, the new sum includes the costs for the design of the roof as well as for additional improvements - such as in the atrium - and extensions, but also for structural requirements. He puts the return on costs at 4%. «If we were to add Jelmoli's losses, we would arrive at 7 or 8%,» said Kucher at the analyst and media conference. The opening has apparently been postponed from the beginning of 2028 to the middle of the year.

Asset management continues to grow

In asset management for third parties, SPS recorded an inflow of new money of CHF 1.0 billion in the financial year, bringing assets under management to CHF 14.3 billion. According to Anastasius Tschopp, CEO of the subsidiary Swiss Prime Site Solutions, as many funds were collected as in the two previous years combined. The division's operating income rose by CHF 18.1 % to CHF 83.6 million, which is partly due to the first-time full-year consolidation of the acquired Fundamenta.

Outlook with higher FFO target

SPS expects FFO I of between CHF 4.25 and CHF 4.30 per share for the year as a whole. Rental income from the company's own properties is expected to grow significantly and the vacancy rate should remain below 3.7%. SPS has set a maximum LTV of 39%. Organic growth in the order of CHF 1.0 billion per year is expected in asset management.

A new arrival on Bahnhofstrasse among the acquisitions

Of the four acquisitions that SPS made for its own book in the financial year, the following are already known: the purchase of the property «Place des Alpes» in Geneva and «Pfingstweidstrasse» (SIX stock exchange) in Zurich. SPS had not yet specified the exact address of a major acquisition in Prilly when the purchase was announced. This is Route des Flumeaux 46/48 with the tenants SAP and Ruag. A portfolio acquisition on Zurich's Bahnhofstrasse has now also been announced: The property at number 69a was added to the portfolio through an asset swap, while the corresponding disposals amounting to CHF 120 million will only take effect in the accounts over the course of the year. The Zurich property with the tenant Rituals was listed in the semi-annual report of the Akara fund, which is managed by SPS Solutions, with a market value of CHF 147.57 million (with acquisition costs of CHF 171.1 million). When asked, Kucher stated the net purchase yield at approximately 2.7%.

The following properties were sold in 2025:

• Buchs (ZH), Mülibachstrasse 41 (34.69 m)
• Oftringen, Luzernerstrasse 54 (4.537 m)
• Oftringen, Spitalweidstrasse 1 (1.517 million)
• Winterthur, Untertor 24 (10.66 m)
• Aarau, Bahnhofstrasse 23 (14.37 m)
• Augst (BL), Rheinstrasse 54 (15.24 m)
• Brugg, Hauptstrasse 2 (11.92 m)
• Dietikon, Bahnhofplatz 11/Neumattstrasse 24 (10.23 m)
• Biel, Solothurnstrasse 122 (7.33 m)
• Romanel, Chemin du Marais 8 (12.42 m)
• Plan-les-Ouates, Chemin du Tourbillon 7 (598,000) (aw)