Swiss Prime Site AG (SPSN) Earnings Call Transcript & Summary

Dear guests, ladies and gentlemen, dear SPS colleagues. A very, very warm welcome here in Geneva for the 2025 Capital Markets Day of Swiss Prime Site. We, I think, haven't had a Capital Markets Day in Geneva for 7 years, I just heard, so it's great to be back. And thank you for all the people that have traveled from afar to come here to this location and also a very warm welcome to the people that have dialed in on the website to listen to us from abroad. My name is Ton Buchner, Chair of the Board of Directors since 2020. I see a lot of familiar faces here in the room, but maybe not everybody on the webcam actually has met me so far. I look forward to doing that in the future. With here, I am with the extended management team, René Zahnd, the CEO; Marcel Kucher, CFO; Anastasius Tschopp, the Head of Swiss Prime Site Solutions; and Karin Voigt and Urs Baumann are here in the room as well for presentations and for potential Q&A later. Having been the Chair of Swiss Prime Site since 2020, I guess we can say we've been on a journey since then. Now some people call it the transformation, I would normally call it a journey. If I look back at the start of 2020, we still were running a number of divisions like Tertianum, like Wincasa, like the operating business of Jelmoli, and of course, the Swiss Prime Site solutions business. And we also, and not to forget, we're having most of our properties financed through mortgages. And therefore, what we did since 2020 together, of course, with the team, is that we first went through a refinancing, received a Moody's rating and from there on, started a portfolio transformation, which is virtually done by the time we're speaking here together today. René Zahnd, Marcel and Anastasius will clearly explain a lot more later during the situation. Of course, in 2020, the Swiss Prime Site Solutions business was also a lot smaller than it is today, and Anastasius will give you a lot more details on that going forward. On the slide behind me, you will see the program for today. We'll have the management presentations following soon after I step down from the stage, followed by a property tour here Alto Pont-Rouge for those who are present. In the afternoon, we'll visit a number of additional places after lunch, and then there will be time for a wrap-up and further questions. If there's one message that I would like to convey, it is that Swiss Prime Site differentiates itself from its Swiss peers, not only through its size but also through its innovative concepts when it comes to developing real estate, a clear commitment to a sustainable real estate portfolio, a development portfolio that differentiates itself from other companies and a very healthy entrepreneurial attitude when it comes to running our portfolio of properties and businesses. This healthy but responsible entrepreneurship is also visible in the agility that we demonstrate when it comes to the development pipeline and the way we develop it, our capital recycling activities over the last couple of years, and the possibilities and the opportunities that we take and the quick and agile ability that we have to react when it comes both to the business itself, but also on the opportunities in the finance market, as you've seen in the last 6 months where we've done a number of additional actions. I wish all of you a wonderful informative and enjoyable Capital Markets Day. And with that, I hand over to Florian Kuprecht from CBRE, who will give us his insights on the Swiss real estate market.

Thank you very much for that introduction. Ladies and gentlemen, a warm welcome also from my side. My name is Florian Kuprecht. I'm heading the Swiss business of CBRE. And I would like to present you a couple of observations on the real estate markets in the next couple of minutes, so to setting the scenes for the following presentations after that. Actually, we're living in quite challenging geopolitical base. We speak of trade barriers, tariffs. We speak not just of trade wars, at times of wars as well. So a lot of things going on globally. We are in a lucky situation in Switzerland that we are so far less exposed to that. Of course, it impacts us a lot. But we still have an economy that is quite stable. We have a growth still in our GDP. We have a recession -- sorry, not a recession, we have an inflation which is down to 0, which is good news as well, and we have a very low unemployment rate. All of that is a good macroeconomic environment. But in real estate, it's obviously often mainly about interest rates, too. So I would just like to flag 1 thing about the inflation and the key interest rates that we have seen in the last couple of years. You see here that the key interest rates in Switzerland in light green has been literally negative in the next -- last couple of years until 2022. And all of a sudden, following the supply chain limitations and more in the Ukraine. This key interest rate has started to rise. And why has that been the case? Because obviously, inflation went up. And we have been able to control that quite rapidly. And since then, the key interest rates come down again. The same has also been seen in other markets. The ECB, U.K. and U.S. rates have also gone up and come down now in the recent months. Switzerland, however, has been leading the way and has controlled it much faster than other countries, also because, obviously, our national debt is way more on the control with the solid parameters, as I have indicated it at the beginning. Now we come to that famous graph that compares the interest rates, now in this case, the 10-year government bond with the top yields, in this case, of office, residential and commercial. What you can see here is that following the financial crisis, this gap has been widening more and more until the negative interest rates have come, about 300 basis points while it was almost, when we look at the office prime yields. And that is one of the widest gaps you have seen in Europe. And not surprisingly, real estate has become a very interesting asset class in that time. With the increase of the interest rates, this gap was closing quite quickly in 2022 to about 64 basis points in the case of office again. And if you have such a small divergence, of course, you need to think about carefully whether you still want to invest in real estate if the premium compared to a risk-free rate is so little. There can be still arguments, but there are less. However, it was a short period where this happened. And in Switzerland, other to many European markets, it has never been negative at all. So with the lowering of the interest rates, and the slight increase of the prime yields, this gap has increased again to about 200 basis points today, which is, as you can see already, again, in a good average and has obviously an impact on the transaction markets. This is what we see on that slide. Here, you see the volume of the rental income properties in Switzerland that have been transacted. And what you can see is that the volumes have literally tripled since the financial crisis. In 2010, it was about CHF 7 billion in Switzerland, and it has gone up to CHF 21 billion in '21. Then sharply declining to about CHF 10 billion in '23 and a little bit coming back in '24. We'll speak about in a minute where we stand today with that, but obviously, the interest rate changes have had a significant impact to our market. What is also interesting to see here is that the segment suffering the most from the interest rate changes were offices and retail in light green and yellow, whilst the multifamily segment was less affected and still quite lively. Let's park that for a second. And before we enter in more details to that, look also at some occupier market fundamentals that are obviously also important drivers of our markets. A quick look at office. And I think this is an important graph that maybe not everyone has always in mind. These are the office availability rates in Switzerland. The line in red shows the 5 major cities and availability there. The line in blue shows the smaller cities in Switzerland and the line in green shows the suburbs. What you can identify easily is that the suburbs have an increasing vacancy right whilst the cities have a slightly decreasing vacancy rate and is at a very moderate level in average today at about 3.5%. Why is this gap widening? It has a lot to do with the post-COVID working-from-home culture. But it is not only that, people more and more want to have a lively urban environment when they work. They want to have a different setting at home. They want to communicate. They want to exchange. And obviously, with the services, amenities and the urban setting in the city centers, that is much more easily given. It is not set that it cannot happen in suburban areas as it is shown here, this is not the city center either, but if you create such a good environment, then people come back as well. So this is what you have to keep in mind, and this is where in the suburban areas, it works as well. If you don't have that, you have some difficulties. A little positive news also on the suburban areas. You can see that it's slightly declining again. This has a lot to do with the supply. There's much less build in the suburban areas more recently. Just 1 word about the rents as well. You see here in light green, Geneva and Zurich are the main markets of Switzerland compared to other cities and how rental growth has been in the last couple of years. And surprisingly, Switzerland is amongst the highest rent growth areas in offices, if you look at the city centers with 4% average growth in these 2 cities. And it's even more astonishing if you look at the real rental growth because most of the other markets obviously have seen higher inflation in the last years. Here is another slide which is interesting, which is showing the 5 Swiss major markets in light green again and where they stand in a European comparison with vacancy and development pipelines. Let me explain you that. On the X-axis, you see the vacancy rates in the various cities. So you can see Berne being at around 3% up to Basel at about 7%. The vacancy rates are relatively low. And by the way, this includes the suburbs, this is city centers and suburbs of these cities compared to the European area. And on the vertical axis, you see the development that is planned in these cities. And you see there, it's usually between 1.5% and 3%. If you assume growth of the office market, like in the last years of about 1.5%, you can see that the Swiss markets are very resilient for the next years. And the threat of a rapidly increasing vacancy or decreasing rents is very limited. Just 1 word also about retail because here, similar things happen when you look at city centers. Here, you see the vacancy rates of the 5 major cities in Switzerland. Obviously, with COVID, it went up a little bit difficult time for retail. But nevertheless, in the city center, you never really had a big vacancy in retail, a bit more in Basel or more exposed cities like Lucerne. And since 2022, it's going down again. And the impact is that also rents at the top levels are at the rise again. Also one word about logistics and Industrial. What you see here is the supply of logistics and Industrial in Switzerland. It's a small market. We don't have much space for such large-scale developments, but it's still not a lot of supply. Even if a little bit more vacancy is observable, the rents keep rising because there is not enough available for the demand that is here. I will not speak about the residential market here. As you all know, big demand, rising rents, very solid fundamentals for an investor. If we don't speak too much about the political impacts that might come to a certain extent. What does that all mean for the transaction evidence? Well, it's very difficult to speak about transaction evidence in Switzerland because it's not publicly displayed. It's more or less easy to find the total volumes, as we have shown, but it's way more difficult to observe the behavior of the investors. So in order to bridge that, for the next couple of slides, we use the transactions that CBRE has made in the last couple of years as a sample. We do about 2 billion a year with about 100 transactions, which is a good enough sample to observe the various segments. So I will always compare, in the next couple of slides, the time before the interest rate increase with the time after the interest rate increase and then also discuss what it means for today. So let me speak about the volume of capital that was invested. And again, that's just our sample. What we have observed is before an average deal size in our segment was about CHF 42 million; after the interest rate increase, it was only CHF 26 million. So clearly, the big deals were gone. There was less available capital. Why? Because the big investors had other alternatives, they went into bonds or they were just not active anymore. And if they wanted to invest, they had higher return expectations, so a lot of reasons that have actually led to that observation. And this becomes more clear on that slide. Here you see how the investor types have changed before and after the interest rates have gone up. Before private investors had hardly had a chance to win a bidding that was on the market. They were active. They were looking at it. But usually, they were outperformed by the institutional players such as pension funds, real estate funds and especially insurances at that time. And let's not forget, they were facing negative interest rates and a lot of capital flowing in at that time and they're absolutely desperate to get these deals. When you look at the flip side of the coin and looking at who has been a seller and before and after the interest rate raise, you see that obviously, the privates are -- have been less sellers. Why is that the case? Because obviously, before the interest rate raise, the privates have taken advantage of the very good terms. They have sold at very good prices. And now as we have seen, they have become more and more biased and less so the sellers. In exchange, all of a sudden, insurance company, who had hardly ever sold, were very active sellers and looking into other opportunities. We've also seen pension funds with an over allocation and very other products as well. So all of the sudden these became sellers. And this has had an impact also on the segments in our market. We've seen smaller volumes, more privates active, less capital available. All of this together with the need for stability is obviously favoring the residential market up until that moment. So more money went into the retention market, and that was a clear focus. Less in the office prime and the retail prime. Why? Because the yields were too low and the volumes too big, so very little activity there. Where do we stand today, if we look at it? Still, obviously, and that's why it's important to look at this evolution, this is where we come from. But we see a partial return of the institutional investors. And especially, we see a lot of capital coming into our markets. What you see on the chart. On the right-hand side of this slide is the capital that has been raised in the various years. So not surprisingly, 2021 has been very good years, then it came down '22 and especially '23 hardly anything raised. So in the first phase of the higher interest rates, you still had the old capital that had to be deployed and actually only the impact we've really seen it '23. But especially second half of '24, all of a sudden, the institutional players mainly and especially investment foundations have started to raise capital and more and more also the other players. And if you look at 2025, we see already CHF 2.5 billion that has been raised this year. So it's highly likely that we will be beyond 2024 this year by the end of the year. So a lot of cash is there. Now not all of this cash is available for the transaction market. Some of it is used to reduce the debt, the mortgages. Some of it is used for development. But in theory, it's there and it's really ready to be deployed. And also, what we see, if you look at the announcement of the various capital increase, the biggest part of it is going into residential. And it's only more recently that some of the capital raises are also allocated to commercial. So that's also important to be kept in mind. Now we've looked at investment behavior and where they're going to. Sorry, I forgot to mention also the pension funds are increasing their targets. That's also slowly but steadily, they have less presence, but they're coming back. However, the insurance companies, they are not yet back. They are still actually on the sideline and if they do something, it's really still rather selling and handing over their real estate to the internal products to the third charging products. So that's important. So we don't have the same full group of investors yet on the market. So let me have a word about the prices and the yields and the evolution here. What you see is the dark lines is the -- are the yields that CBRE has observed in our transactions. Before the interest rate raise, and the light colors are after. The blues are the commercial segment, the greens are the residential segment. Now not surprisingly, the yields in all areas have come up after the interest rate rise. But it was not the same in all areas. If you look to the left of this graph, this is the core segment with the lowest yields, actually, the difference has been quite high. Why is that? Because, again, we have had less capital, we have had 2 low yields for this capital and hence, if transactions came into play, the prices were down and the yields were up. So in case of commercial, it was about 70 basis points. In the case of residential, also 50, 60 basis points on the top end. So quite a substantial difference. The same can be seen at the right-hand side where also a big gap has been opening up, however, for other reasons. At the opportunistic and there is just not enough capital anymore available for that. And if you wanted to have a transaction, you needed to have a lot higher yields. Interestingly, in the middle segment, the change was not that big. Why is that? It's actually that in that time, the sellers had to offer better quality deals in order to make a deal happen. So they were actually offering better locations, better covenants, better tenants, longer leases, to speak of the office market in order to make a deal happen. And therefore, yes, the yields were almost similar, but what you got for the deals was a better quality. So that leads me to some closing remarks in regard to that. And we have seen or we see now that in the core end, the yields come down. There is way more activity, there is way more capital and the investment market is clearly recovering already by a couple of thousand basis points on the core segment. We are not back to 2022 yet, but more and more players are back and that increases competition. However, the competition is almost exclusively today on this core segment and everyone is looking for quality, long leases, good leases, ESG compliance and so on. And it's way more difficult when it comes to complex assets where the investors are not back in the same amount. And also, let's not forget, we have Basel III, which makes lending more difficult, especially on the opportunistic end, and we have the consolidation of the banks, which is also reducing the competition there, both really making it difficult, for example, to sell shopping centers or retail that are not at very centrally located. So investors are still selective, decreasing yields, especially on the core end or clearly rising yield differentiations, which obviously creates a lot of opportunities. So I hope with these words, I have been able to give already a bit of input about the Swiss market and over to René Zahnd.

Thanks a lot, Florian, for this insight in the current market situation. A very warm welcome also from my side, [Foreign Language]. With that, I will switch back to English. Okay. So the Q&A session will be at the end of the 3 presentation. I will start with the presentation here from my side, and then I will hand over to Anastasius Tschopp for the business inside the SPS solutions. And finally, then the closing words for Marcel concerning our financial strategy and our financials. So that's the first slide. Speaking a little bit about the situation in Switzerland. Most of you are citizens here in this country, so you will know it already. We still have an important economic growth of approximately 1.4% and we have especially a growing population, I mean, 0.8% or 1%. This is 90,000 new people inside this country. Those 90,000 new people, they all need a place to work, and they all need, of course, a place to live, which explains a little bit the success of this country. And very interesting on the right side, we got this figure from the OECD average, it's an average figure, a higher productivity in this country. More than 4% above the rest -- or the average with a lot of innovation being done inside Switzerland. And the second slide concerning the current market situation here, already Florian mentioned it. You can see the high employment growth inside Switzerland. Then the very interesting split we have in the GDP, which makes us a very, very stable country. And on the right side, this is also what Florian mentioned, it's the inflation. I mean I still remember when we had this inflation peak for Switzerland, it was, I think, 3.5% or 3.6%. So far away from the 10% that you could have seen in other countries, especially around Switzerland in other European countries. Why is that so? Of course, we have a strong currency. We have quite an independent national bank, I would put it that way. And we have something very special in Switzerland. If we have a look at the consumer basket inside Switzerland and if we have a special look inside the consumer basket concerning energy and the energy mix in Switzerland, so then it's clear that we pay less money for the energy in Switzerland because we are not depending on oil, we are not mainly depending on gas, so we are more or less then on our own with our hydropower. This explains a little bit why Switzerland had such a low peak of the inflation with approximately 3.5%. Now inside the company, we can say that we are definitely a completely new company. What you can see on the left side. This is the earnings split we have seen inside the company in 2019. And Ton Büchner mentioned it, when he arrived in 2020, we still had Tertianum, we had Wincasa, and we still have the operations of Jelmoli. And the earnings split was only 45% of all the earnings of the company were coming out of the core business, the real estate business, so including also at that time already the asset management. And because we have somebody from Kempen here, where is he? yes. I like to -- I always like to tell the story. My first roadshow was with Kempen in Amsterdam, the very first one in 2016. So I arrived in the room. And then the guy on the other side on the table, he was looking at me and he said, "You are a real estate company, aren't you?" And I said, "Yes, as far as know, yes; and as far as they told me because they were looking for me and when I was working with Implenia, yes." And then he turned the page, and he said, "6,400 employees, you can't be a real estate company." And just to keep it in mind, we had, at that time, approximately 4,000 employees inside the Tertianum business, then another 1,000 inside Wincasa and approximately 800 inside the operations of Jelmoli and now we are down at 200 employees overall in the company, and you can see now the new earning mix by the end of 2024. Of course, it's already ex Jelmoli and you can see that 87% are now coming in from the direct investment and the rest is coming already from the asset management with a very interesting top line growth and the EBITDA margin, which is, of course, improving because now we have a higher margin business with the real estate business. So strategy, if we can say, yes, yes, yes. I won't go through the whole page. But of course, we have now this new strategy with this new portfolio. We are a new company with the 2 main pillars, so direct investment business and the asset management business we will deliver in the next years also 3% like-for-like growth inside the portfolio. And we still continue to make our developments, why the developments? I mean, they make us quite independent from the current market situation. And of course, the net yields inside the development are much higher than the net yields you can normally find in the locations that we are interested in when we are looking for a new building or for a new asset. I won't say anything to concerning financials, I leave this part then completely to Marcel. So this is the platform. By the end of 2024, by coincidence, both pillars had more or less CHF 13 billion assets under management, if you like to put it that way. And then you can see that the location here, we have differentiation and location in the direct investment or the economic centers. So the big cities inside Switzerland, of course, and on the other side, here in the asset management, our focus areas, it can also be more suburban areas than we were looking in the direct investment business. And the type of use is completely different. We have on the left side, you have a 100% -- approximately 100% type of use is commercial. And on the right side, it's 60%, it's residential, which makes us also then interesting as a platform because now we have both pillars and we have both types of use. And if we speak then about conflict of interest. There is absolutely no conflict of interest between the left and the right side. Why is that so? First of all, type of use is not the same. So commercial on 1 side, more or less residential on the other side. That's 1 point. Secondly, locations are completely different. So we are looking for core locations in the big cities in the direct investments and more in the suburban areas in the asset management. And finally, the size of the asset is completely different. So we are looking of size. When we look for a new asset sizes of CHF 75 million, for specific assets and the size in the asset management is much, much smaller. It's rather they are starting with CHF 15 million and then going up approximately to CHF 50 million. So also concerning the size, there is no conflict of interest. Then where are we invested? Now I'm speaking of the direct investment business. So of the Swiss Prime Solution -- not Swiss Prime Solutions, Swiss Prime Immobilien AG. So you can see that our investments are, of course, still in the big city centers. So it's a connection between the highway A1 connecting Geneva with Zurich. That's what I like to put it. And the other one is half of the Highway A2 connecting the city with Basel, so the Northwestern Switzerland, then going through Lucerne, Zurich and going in the direction of Tessin. And you can see there is one dot here that's only one dot. Yes, we have an activity in the canton of Tessin. This is still a residence, Tertianum residence. So when we sold the Tertianum business in 2020, we kept, of course, the assets, we kept the buildings. We just sold the operational business. This explains here this only single dot in the canton of Tessin. Then my favorite next pages. What we did during recent years was a title here is -- it's a little bit wrong, it's a little bit misleading because we called it capital recycling strategy, but it was definitely a capital upcycling strategy. I just explained you on the next 3 slides, why. So what we did are disposals from 2020. So it was the arrival of Ton in the company 2020 until the end of 2024 of more or less CHF 1.3 billion, and we reinvested this money then inside the development pipeline. You can see some of the developments that we have listed here. Currently, we are in the building here in Geneva Alto Pont-Rouge. So this is one of the big developments we then invested this money. With that, we have optimizing also of the type of use. So of the mix you have in mind that when I started in the company, we had still a type of use retail a little bit more than 30%. So we said we should come down in the direction of 20%, which is now the case. By the way, at the end of 2024, we were exactly at 19.7% type of use percentage of retail inside the portfolio. And of course, inside these new developments, we have normally no retail. We have most of the type of use of floor space is office floor space, what you can see in the second bubble in the middle of the page, and then we get better locations, of course, and we get greener buildings because when we develop ourselves, and we have really a green building at the end, we have even a power building, which means normally that we can produce more energy in the building that we need ourselves, so we give it then back to the community. And now the detail of this slide is even more interesting. So what we did then exactly with this whole transformation of the portfolio, and this is the very -- I like this slide because then you have here a number of the buildings. So you can see that we started with 187 buildings in 2020. We are now down at approximately 140. And the buildings that we sold on the market were exactly the buildings where we said they are not really the type of the buildings we want to have in our portfolio as Swiss Prime Site. So we sold more or less than a lot of smaller buildings, which you can see on the left side. And then on the right side, this is just the other -- the flip of the coin -- the flip side of the coin, then you can see where are we now currently concerning then the fair value of the building. So we have much more buildings having high fair value and much less buildings with a lower fair value than on the right side. And if we summarize this, then we have -- we had CHF 425 million as earnings from rental income in 2020. We are now up with less buildings, by the way, with better locations with screener buildings up to CHF 464 million rental income. So our goal will be this starting point to cross then the border line of CHF 500 million. Marcel will come back to that later. So we have better locations. You all know this presentation of recent partner where you need to be on the right side, on the top of their presentation. So we have now -- we started with 88% in core locations. We are now up on 96%. And as I already mentioned before, the type of use is approximately 50% office floor space and 19.7% to be very exact, retail floor space. The rest is more or less logistics. It's a little bit of hotels and parking slots, and we got efficient. And we got really efficient. So you can compare to 20.2 -- 22.5% to the 17.3% more efficient. Why is that the case? Because even if you have smaller buildings, smaller building will not say that it's less complicated. Small building can be as complicated as a big building. So this makes us really efficient. Then let's focus now on the acquisition pipeline. That's the acquisition pipeline. We are currently following one acquisition is very well known. It's the 1 in Geneva. We will visit the building this afternoon, and the other acquisitions are underway. We have approximately a portfolio of CHF 600 million. Altogether, you can see the figure here below with a possible potential rental -- additional rental income of CHF 25 million. Of course, I mean, if we say due diligence, the deal is not done. The deal is maybe in different stages of negotiation, but it's not completely done. Where are all these buildings, of course, they are, as all the rest of our buildings, it's along the A1 or the half of the Highway A2. Then next slide is the acquisition we did with SKS. That's the building, as I mentioned before, that we will visit just in the afternoon. I mean the interesting thing about this acquisition was not only the acquisition of a very interesting building in the city center of the city of Geneva. It was also that maybe you have it in mind, we have a completely empty building in Baar that was the building which was used by Partners Group before. Before they started to develop their new headquarter. So come -- the building was completely empty, and we had with this still the opportunity not only to get this new acquisition of a very nice building, so that's the building that we will visit in the afternoon. So we have here the old part of the building and the new part of the building. And on the other side, on the right side, you can see that there is a really nice view of the lake. So not only that we got this building; on the other hand, we have now, again, a full building in Baar, in the Canton of Zurich, which was for us definitely a win-win situation. So that's the deal done. And speaking a little bit about the developments, of course, Jelmoli. We closed the operations definitely down in the end of February 2025. So now it's closed. And the good thing about this, it's not only closed. We already could start then the transformation of the building. What would have happened? I mean this was really what we struggled a little bit. You never know when you get a building permission and this was very, very tight then. Just keep in mind what would have happened if we didn't cut this building permission until the end of February 2025. And then you have a building completely empty. You cannot start the transformation work. It would have been very bad for the reputation of the company and also very complicated to explain this to all the employees of Jelmoli. So this is really very well done that we could after -- just after closing of the operational business, just start with the transformation works. And maybe even more interesting than or just because maybe do not have it in mind, currently, we have rental income. We had a rental income of CHF 27 million here. After transformation, rental income will go up to CHF 33 million. So that's the goal after the transformation of this building. Pre-let situation is currently at approximately 50%. We all know that we had the opportunity to sign a rental contract with Manor which we did last year, and we also have a rental contract with Holmes Place, they were already a tenant inside the building in the old building. So this gives us the 50%. And now the interesting thing then what comes then on the rooftop. Rooftop will be a place of leisure. It will be a place where you can really have restaurants where you can also do sporting activities. So this should be the place to be inside the city of Zurich and this rooftop didn't exist so far. Even if Jelmoli had a restaurant, this was not a rooftop. The architects, they say the rooftop normally is the fifth facade of the building. So you do not only have the facade around the building, you have then the opportunity to do something very special on the top, on the rooftop, and that's what we have in mind, and we will make the possession of the building permit in the next months so that we get then the building permit, I think, maybe in a year and that we can start also the transformation of this rooftop. Then another 3 developments. This is the building, which will be currently finished in the city of Bern, it's just when you arrive by train or by car. It's very well situated inside the structure of the What you can see, the shape of the building is a circular triangle, very complicated structure. You maybe can assume it a little bit on the right side, on the bottom of the right side, this shows you the picture how this building works. What is it all about? It's mainly a timber construction and it's a lot of photovoltaic modules that we could put on the roof of this building again on the roof, but also the facades. So this blue structure you can see there, these are photovoltaic modules. And the good thing is, and the Zurich Insurance Company will be very happy because this is the main tenant of the buildings and their main color is blue. So they are completely happy with this photovoltaic type situation inside this building. Then I have 2 slides left. This is the second part of this development in YOND. So maybe I can show it here. These are the buildings already existing. That's the development we finished roughly in 2019-2020. And now we will continue with the development of 3 additional buildings. So there will be 2 new buildings and 1 transformation of an existing building. The current letting situation is 1 building is more or less at 50% pre-let. So the advantage of this project is that we can start with 1 building after the other. And as you all know, we normally do not start construction works, if we do not have a pre-let situation of 50%. This is now the case for 1 building. So we started the construction works in the beginning of this year. And finally, and this is my last slide, and maybe some of you remember the Capital Markets Day that we had in Zurich and you remember maybe what we explained concerning the -- also one of the assets that we will visit this afternoon, that's the asset where we have, as a main tenant, we have Globus. So what can I say? We are in current negotiations with Globus. So not with -- only with Globus Switzerland, but also with their mother company, which is very important. We are quite optimistic that they will continue where they are today. They are currently with us in our buildings in Geneva and Lausanne and Lucerne. Keep this in mind. I think we can give you then another information by midyear, more or less, so we then have the press release in August 2025, we will know a little bit more. And now we have here 2 options. The options we gave you 2 years ago was the option on the right side. So at this specific moment, we said what we have in mind, and we already got here the building permission is a complete transformation of the building, which would mean that Globus has had to reinvest or to invest a little bit with us, so 1 part will be with us, it's approximate to CHF 150 million. But on the Globus side, will also be an investment of CHF 50 million. I'm not sure if they will do that. So we will know this, as I said before, mainly in August, so that's why we showed you the second option. The second option would be that they just keep their floor space that they have currently in the building, that there will be only a small transformation of the building. You can see then the invested CapEx is CHF 15 million compared to CHF 150 million, so it's just 10%. This could be the other option. So in the logic then behind is that we cannot have some additional rental income, what we have shown you 2 years ago on the right side. So this would keep the rental income approximately where it is currently. So these are the 2 options, and we all hope that we have -- or that we can give you then more information by August when we see us next time during the press release for the half year results. That's from my side. So I hand over to Anastasius.

Thank you, Rene. Dear ladies and gentlemen, a very warm welcome from my side. My name is Anastasius Tschopp, I'm the CEO of Swiss Prime Site Solutions since 2018. In the next few minutes, I'm going to give you an overview to Swiss Prime Site Solutions. I have broken down this presentation in 3 points. The first point is the business case of Swiss Prime Site Solutions. The second point is how function the pension fund market in Switzerland. And the third point is how we get CHF 60 billion assets under management in 2027. I will start with the business case of Swiss Prime Site Solutions. As Rene Zahnd mentioned before, we have 2 strong pillars in our group. On the left-hand side, this is Prime Site Immobilien AG. On the right-hand side is the Swiss Prime Site Solutions. Their investment focus is housing or residential. Swiss Prime Site Solutions is the leading independent real estate manager in Switzerland. We have 13.3 assets under management. We have a license from the FINMA. More than 2,500 clients are invested in our 7 products, 650 clients. From these 2,500 clients are pension funds. We have 130 employees in 4 locations, 3 of them in Switzerland, Zug, Zurich and Geneva, 1 in Germany, Munich. Our investors, not only pension funds, insurance companies or banks, we also have products for private equity for retail clients. I like this slide, and I will go through to this slide. On the left-hand side, we can see our fund management. For example, the products in this sub pillar is the investment fund commercial IFC or the Akara Diversity PK. With CHF 4.2 billion assets under management, we are -- have here big subpillar for the Swiss Prime Site Solutions. And we are on the driver's seat to drive these 2 products. We have grown the first 5 months in 2025 with CHF 180 million new equity. In the middle of the chart, the Wealth Management with CHF 6.4 billion assets under management. For example, the Swiss Prime Anlagestiftung or the Investment Foundation from Fundamenta. For these products, we have raised CHF 150 million new equity for the first 5 months, 2025. And finally, on the right-hand side, we have the third part, subpillar or the mandates. Here, we have CHF 2.7 billion assets under management, and we are growing with CHF 50 million in the first 5 months. For example, our clients here, Asga or BASF, also private equity. I will summarize for you in the first 5 months, 2025, we have raised around about CHF 370 million new equity in 3 products out of 7. And the capital raises are still running until the end of June 2025. During this capital raise in the first half year, we gained more than 30 new clients for our diverse products. And this slide is very important, how works the pension fund system in Switzerland. Let me explain. 4.7 million active employees and employers pay into this system every year. This is not an option, this is a requirement. The pension funds must therefore invest CHF 17 billion new equity per year that they can pay pensioners' pensions. Around about 900,000 people are retired in Switzerland. The real estate sector is a safe and long-term investment for the pension funds. From the yearly net contribution, around about CHF 17 billion, the pension funds invest approximately 23% or CHF 4 billion in average in the real estate market. Our target is to raise 50%, which means CHF 600 million, CHF 700 million new equity. Before the merger with Fundamenta, our share was 12%. Now we are confident that we can go to 50%. On this waterfall chart, you can see how we get from CHF 13.3 billion to CHF 60 billion assets under management. As I mentioned before, we will get in the first subpillar around about CHF 2 billion new equity from the pension fund market. In 3x, CHF 600 million or CHF 700 million in results, it is CHF 2 billion. The second subpillar in this equity part, we will get from the accommodating products. This means Swiss Prime Anlagestiftung and Fundamenta Anlagestiftung, which no pay out to dividends, and this is CHF 150 million each year in 3x in results, it is CHF 500 million. Together, this CHF 2.5 billion new equity we can supplement it with 30% debt, around about CHF 600 million. And so we have CHF 3 billion new equity that we can invest in our products over the next 3 years. Please note, in this calculation are not the mandates, the private equity club deals or other products. To the end, I have 2 takeaways from the market and 2 takeaways of Swiss Prime Site Solutions. The fundamentals, as mentioned before, Florian or René, are very strong. We have a net immigration by around about 90,000 people every year. We don't have enough housing. The interest rates are low or going down. And in the same time, we have a bullish real estate investment market in residential. As I mentioned before, the pension fund system in Switzerland is strong. They have to invest CHF 17 billion new equity every year. 23% goes to the real estate market in average and our part will be 50%, around about this CHF 600 million. Swiss Prime Site Solutions is a stable business case. We have 70% recurring fee, for example, management fee, construction fee only 30% is nonrecurring, for example, transaction or capital raising fees. Our recurring fees cover our costs 2x. For example, our costs, around about CHF 30 million, our fees -- recurring fees, around about CHF 60 million. The EBITDA margin is higher than 50%. As we've seen before, to grow to CHF 16 billion in assets under management in the next 3 years, we will not need more employees in the future, but we can benefit from the economies of scale. Thank you for your attention. And now I hand over to Marcel Kucher.

Thank you very much. A very warm welcome also from my side. It's really great to see so many familiar faces here in this room and probably many more in the offices around Europe in front of their screens. So what have you learned? We learned a lot about the Swiss real estate market, we learned about our transformation, we learned about our strategy, we learned about the strategy of Swiss Prime Solutions. And what remains for me is to put this together and show the key elements, how we build from this resilient growth for you, our shareholders, over the next couple of years. And to start with, I think there are 6 building blocks that are important for that. And I want to keep these 6 building blocks in mind, and I will talk a little bit about them in -- for each of them. The first one is stringent letting capturing reversion. We'll talk about that. René has mentioned it before, our like-for-like growth, but I'll provide you a little bit more on that as well. The second is accretive acquisitions, a large chunk, obviously, out of the capital increase we did in February, but also out of that, how do we deploy our capital in order to make sure that this is accretive for our shareholders. Development growth, René mentioned our pipeline and showed some of the cases that we're working on at this point, but that will be the third element in the property portfolio. And obviously, as Anastasius just explained in great detail before, we see many opportunities in the asset management business to keep delivering here growth in this fee-related business. And then there's 2 additional elements, which we say is platform focused. The first one is our strong balance sheet. How do we finance? How do we make sure that we make the right capital allocations? And the last one is economies of scale that become more and more important given our large platform size of CHF 26 billion-plus in Switzerland. And all of that together allows us to deliver resilient growth over the next couple of years. So let me start with the first one on the rent reversion. René mentioned the numbers before. Over the last 2 years, it was roughly 3% plus in like-for-like growth that we delivered. We split it up here a little bit. If you look on the left-hand side, where that does come from. There is a bottom case where you basically see, which is the pure rent, which went up since 2021 from up 0.8% to roughly 1.5% over the last couple of years. An additional element was the vacancy reduction. You see this on the top here, delivering 0.5% to 1% over the last couple of years. And then there was the middle part, which is the indexation. Now we heard in Switzerland, inflation came down significantly. So obviously, this part will probably come back a little bit. So what I want to focus on is the lower part, the really rent reversion part that has come up quite a bit over the last couple of years. And this did not just happen. We put a lot of work into that, and our teams put a lot of work into that in order to do that. We increased our marketing teams. We increased our sales teams in order to be closer to our customers. We have now for almost all of our larger compasses and areas, we have community management teams that make sure that our tenants are really super happy in these places, provide additional services. We have now for many of our campuses, we have mobility services. And all of that adds to the happiness of our customers and they want to stay and hence, in combination with our great portfolio in the right locations, that will help us to deliver this like-for-like growth. Currently and the question we get asked often, if you compare to our appraisers, what is in there? We have roughly 10% reversionary potential versus the market. But I put up here some of the larger extensions or new lettings that we did. We aim to beat that, to deliver more than what our prices have in their appraisals and you see that very often we can do that delivering up to 10% higher rents when we close the deal than what was in the -- what's in the appraisal. So like-for-like growth rental reversions. Second one, René mentioned our pipeline is acquisition delivering income and value growth. So we did our capital increase by CHF 300 million. As we mentioned in the release and in individual discussions, we're not trying to use this money to deleverage. Hence, we have a firepower of, say, roughly CHF 450-plus million. And if you look at the pipeline that René just mentioned, and is very important to us, we're focusing on elements that are in key locations along A1 and A2, as René mentioned, new buildings, attractive buildings, but buildings that also are accretive to our shareholders. And I think that's very important in terms of how we do our capital allocation going forward. You see this here a little bit. This is the pipeline that René mentioned before. Net yield between 3.5% and 3.8%. And if we leverage this up with roughly 40%, we delivered then roughly 4.9% to a little bit more than 5% in FFO yield and both of those compared to the 3.2% that we currently have in place and the 4.8%. The current FFO yields on both of them are very accretive. So if you look at these building blocks that we mentioned before, we aspire to deliver CHF 500 million-plus in top line within the next 3.5 years, so by the end of 2028. Where does that come from? So our starting position is obviously the CHF 464 million that we delivered last time. One word of caution here. Within that CHF 36 million is from developments that will go off-line like Jelmoli or Globus here in Geneva, if we do this. The like-for-like growth that I mentioned before translates roughly into CHF 30 million in additional top line. The acquisitions we mentioned as part of the capital increase, roughly CHF 17 million. And the developments that we're going to deliver, this is important, this is the incremental top line that we deliver. So it's not the full Jelmoli because this is already in the CHF 464 million, this is the incremental top line that we deliver should be in the area of CHF 20 million. We will also do some sales. About half of it is sales that have been taken place last year already, but it's obviously effective in terms of the top line impact this year. But we are still seeing a couple of buildings where we see better uses of the capital that we employ. So that gives us roughly the CHF 500-plus million over the next couple of years until end of 2028. One element I mentioned before is a building block is the economies of scale. And if you look at what we delivered over the last couple of years, you see this here very well depicted both on our own real estate portfolio as well as on the asset management side. René mentioned it before, the 22% that we started in terms of EPRA cost ratio in 2021, brought it down to 17%. Our aspiration is to bring this further down to a maximum of 16% midterm, so by the end of 2028. At the same time, you also see the cost ratio that we did depict here on the asset management, brought that down from about 55% in '21 to currently about 40% with an aspiration to bring this down to about 35%, so meaning an EBITDA margin of roughly 65%, the reversal. How can we do that? A large element is that we really have economies of scale that we organized across the segments wherever that is not client-facing or real estate-facing, but all the back office, all the development, all the financing, et cetera, we can do across the platform. And given the size that we have, that delivers significant economies of scale going forward. One word on capital allocation. I think it's very important that we focus here on a very prudent financing strategy and continue that as we have done. We are with Moody's in an A3 level and certainly aspire to keep that going forward, which means we keep our LTV ratio roughly at the 38% that we mentioned before. Given where interest rates are currently at the outlook that we just heard before from CBRE of the investment market in Switzerland, et cetera, we see a continuation of this prudent investment strategy as a real key element for that. And it delivers on the interest rate. You see this, we came down from last year from 1.2% to roughly 1.1%, a couple of -- it's probably even lower in the first half year. And for those of you who have followed a little bit our marginal cost of debt today, it's probably at or even lower than what our average cost of debt is. So that means going forward, we do not expect here to have significant changes in terms of our financing costs going forward unless things change, which these days happen sometimes quickly. So putting all this together leads us in an aspiration for an FFO growth potential of roughly say 10%. We started for '22. Last year we see roughly 50-50 coming from asset management as well as the real estate business, so roughly 4% and then the 2% I mentioned before coming from efficiency elements, scale element, et cetera. And that brings it all together to this roughly 10% by 2028, again, assuming no significant changes in the financing market over the next 3.5 years. And obviously, as our dividend policy is to pay out roughly 80% to 90% of the FFO I, that translates into a very attractive, we believe, dividend policy over the next couple of years. So let me sum up. Two last pages. Medium targets, as we mentioned before, rental income, for the real estate portfolio of CHF 500 million-plus by 2028; EPRA cost ratio below 16%, so further improvement here on our efficiency. Why 2028? Because end of 2027, Jelmoli is going to be back online and that makes only sense to compare it then on a like-for-like basis by 2028. On the asset management side, Anastasius mentioned that before, we are confident that we can reach a CHF 16 billion-plus here again in assets under management, given our current market share and the activity that we see in the asset management market and that with an EBITDA of CHF 75 million. And here, we see clearly the economies of scale that we can produce. And that brings me to the last page and also the key takeaways that we want you to take home. We have a really focused strategy now with the 2 pillars in Switzerland focusing 100% on real estate, both in the commercial side with an exposure also on the residential side through the fee income. We have a very disciplined capital allocation. We maintain our A3 rating going forward, and we are very diligent in terms of how we allocate our capital, so that it's accretive, all the acquisitions that we do, all the developments that we do. And we are the largest player in the Swiss real estate market with roughly CHF 30 billion going forward, assets under management, which allows us to benefit from economies of scale across the platform. And that together sets a clear aspiration for us to deliver resilient growth with a 10% FFO potential going forward. Thank you so much. And I will now hand over to René for Q&A.

Thank you. You won't hand over to me, you hand over to all of us for the Q&A. I certainly won't answer all the questions myself. But for the Q&A, we will start with the Q&A here in the room, but you have also the possibility to ask questions in the virtual room, then please just hands up and then Florian here, Florian Hauber not Florian Kuprecht, will handle them in the second way, all the questions from the virtual room. But let's start here and please, one question after the other. Even if we have no translation at the moment in the room, but Ken, I've seen that you have the first question. Yes, we have some mics. Thank you.

First question is for Anastasius. And the question is if you see further potential for consolidation in the Swiss real estate asset management market.

Thank you for the question, Ken. Yes, I see potential, that's clear. We have some small players and bigger players, but some bigger players may be too big. We know these big players. But I see potential, yes.

But would you acquire another competitor again? Or do you think you have now the necessary size...

We have now necessary size. So those CHF 16 billion plus, which we have shown just on the screen, at the end of 2027, this is organic growth, this is definitely organic growth. There is no acquisition inside those CHF 16 billion. Now would be completely wrong to say, no, definitely no, we wouldn't do that, but it's definitely not in our current plans that we will make another acquisition in the next years, because we think that now we have the platform and now we have the stuff to operate in to going up from those CHF 13 billion to CHF 16 billion with the same people, with the same employees, and this makes us then really efficient. And I think another acquisition, it's always -- it's never easy to do an acquisition. Now we have done 2 very nice acquisitions. But until you have integrated all those people, I mean, this also needs some time. So the answer would be rather no, but never say definitely no.

Okay. The second one is for you, René, and it's about the deployment of the capital that you've raised. Where do you stand with the acquisition pipeline of properties? And where do these kind of yields that you see play out currently?

Marcel?

Well, in terms of the yields we just showed you, net yields of 3.5% to 3.8%. This is the acquisition pipeline. This is not a general market or anything, this is the pipeline that we're currently talking about, and that translates that into an FFO yield, if you leverage after taxes, et cetera, of this, I would say, roughly 5%-plus that we mentioned before. In terms of where we stand in the acquisition pipeline, we're obviously in different stages, I cannot comment too much about it. But if you say your due diligence, it's not that we just started. But with the transactions, you never know how long they might take.

Okay. And the third one is also for Marcel, so natural way here. Florian Kuprecht said that the financing market is difficult because of the consolidation of some banks plus the Basel legislation. And then you have a very large credit portfolio. I am a bit worried that you are too large for the Swiss market once the bond market might be closed, and the banks might be very restrictive. Do you feel that you are too large as well? And if so, how do you tackle this issue? And if not, could you explain why you believe not because you have a rather large size in this market currently?

Yes. A couple of points on that. First one is what -- my feeling is since end of the last year, I've seen more interest from banks again. We did a couple of elements also for the Anastasius' asset management product that I thought would have been difficult a year ago or something like that. You were talking here about unsecured financing also for our products. We're talking about credit lines that are committed, et cetera. And we could do that, again, at the beginning of the year, we got good quotes, several quotes. I think a key element here is also that we are relatively large. So for our partner banks, we can provide them not only do they do a mortgage with us, but we can do capital market elements, we can do nonsecured financing, we can do private placements, et cetera. And I think that makes us an attractive partner for these banks. Now in terms of size, at this point, I think, as you might have seen, no problem. We issued last year over CHF 500 million at very attractive margins. We issued this year already CHF 210 million at the beginning of the year, the lowest spread in the industry despite the fact that we are double the size of the average transaction. So that shows that our investors, our debt investors are very eager still to invest in our products. And hence, I'm not worried at all. And there are other options. As we mentioned before, we do have our convertible options that we didn't extend now, but that is certainly a very different market from the market that you have in the Swiss I see more potential also with the Swiss banks. Now that the consolidation has a little bit settled, et cetera, I do think there is potential to increase here a little bit the unsecured financing. And there's markets above and outside of Switzerland, which we believe are potentially suitable for us going forward.

Yes, please.

Eleanor Frew from Barclays. So first question for Anastasius, it sounds like you're seeing strong interest in your products in recent times. But maybe thinking back to the pre-interest rate rise, how does the interest you're seeing now compare to back then?

How is the interest that you see now compared to 2020 or something like that -- or 2021?

And what's changed a little bit.

What changed? Is the interest -- the interest in asset management investments, is that the same or larger or lower?

Yes. We see after the crisis that the interests are growing. But the last 2 years was -- the market a little bit still. And we have not so many investments in real estate, indirect in our product. But now we see the big bubble that they have to invest. We see a slide from the Swiss pension fund market, the CHF 17 billion that they have to invest, 23% goes to the real estate market. So this is around about CHF 4 billion, CHF 5 billion every year or each year. And so the last 2 years, they hadn't invested, and so now they have and now they have a lot of power to invest there.

This gives me the opportunity really to -- that's just a slide he mentioned. I mean if you compare the asset management market in Switzerland, you have to mention just around Switzerland, let's say, Germany, for instance, it's just not the same market. And why it's not the same market? Because we have here this pension fund money, which is not the case in Germany, just for a small part. So this gives us the stability of inside this market. So this is then also -- this explains a little bit why we have such a high amount of recurring fees. And of really stable clients, he mentioned 650 pension funds only invested inside our different products. And as he said, they need to invest. I mean they need to allocate the money they get each year from the employees inside this country.

Maybe shed a little bit additional light on that. That's one particularity and I saw some eyebrows going up here where we showed 23% real estate allocation, which is obviously much higher than in many other European countries. And I think part of that is these pension funds need to deliver 2% to 2.5% cash basically. That's what they need in order to pay the pensions. And in many other countries, obviously, you allocate the larger part to bonds. But if you look at the Swiss market, you cannot make 2.5% with bonds, that's impossible. And hence, a lot of the pension funds take a higher portion in real estate because this is stable, it delivers stable cash flows and then it delivers cash flows that are at whatever, 3% or something like that. And in that respect, that is also a key difference. If the market is a little bit flattish or maybe even goes down a little bit, they still stay because this is, for them, is a long-term 30-year investment that provides them with the basis of cash flows that they require in order to pay their pensioners. And I think that makes a huge difference. These are not the guys that go in and out very quickly. These are the pension funds that stay.

Very clear. Then maybe one for you, Marcel. So you mentioned your acquisition yields are higher than your current portfolio yields. Do you think there will be any read across your portfolio value as that transactional evidence filters through? So downward pressure on values perhaps? Or is your strategy more focusing on those stranded assets that Florian alluded to, that there isn't as much interest in?

No. No, that is not what I wanted to allude that we see here a downward pressure, not at all. I think every one of these situations are special situations. René mentioned the one that we can talk about in terms of SGS because it was kind of a mutual benefit. They needed an office in the canton of Zug, we provided them an office in the canton of Zug, and at the same time, they wanted to sell that. And the negotiation was very much focused on that joint approach. And I think that is what we can deliver as SPS because we have the size and we have the coverage. And also, if you look at the other opportunities that we're currently pursuing, these are all in a way, special. Might be sale and leaseback with a strong focus on -- they want the Swiss buyer for whatever reason, there are some private people involved in that. So no, I think it's more of the special situation that we're after, where we can bring our size, our leverage, our reputation, and that helps us to generate higher, not the market.

Maybe as a quick follow-up to that then, how do you see your portfolio value kind of evolving as the half year goes on?

Up.

It's the right direct.

Up, yes. It's always hard to say. I don't think we will see major moves in the discount rates, rather flattish. But as I mentioned before, we deliver like-for-like growth and hence, up-ish. Yes.

Yes, please. Let's start with that side, please.

[ Alexander from Green Street ]. Two questions for Marcel, I think. On the acquisition front, you expect kind of CHF 70 million worth of income by 2028. Is that -- sorry, that's the -- on the equity raised. Would that be CHF 70 million based on the CHF 300 million equity raise? Or that would be CHF 70 million based on equity and leverage, so CHF 450 million or so?

Sorry, CHF 70 million, sorry....

The CHF 70 million additional...

Okay. That is both. Otherwise, the yield would be -- on the CHF 300 million, that will be too high for that.

Okay. And CHF 25 million worth in sales, what kind of volume do you expect?

Look, as I mentioned, 1/3 to half already happened, because as René showed before, part of our capital or upcycling, we sold almost CHF 350 million last year, and a lot of them relatively late in the year. So that will be already a significant chunk. What are we selling? We're selling smaller buildings. We're selling buildings that are not in prime locations. We're selling buildings where we see less potential going forward, et cetera. So you can assume that the average yield there is a little bit higher than our average yield in our portfolio, I don't know, say 4-ish or something like that as a rough indicator.

Then we switch on the right side.

Yes. It's -- actually, it's a question on the market, maybe also for Florian.

For Florian? Yes, of course.

I mean, I just have the impression that -- and I totally agree about the -- that core CBD market for office is still a good market. I believe in the good economics there. But I have the impression that lately, this -- what the definition of a good office location, it has become smaller. So on the outskirts of the CBD, you can see from competitors of yours or other investment vehicles that they struggle a bit with such locations. So there you can see some change of use of those office spaces, so offices, which are not really -- or have a problem to be relet again at the same conditions. Do you -- I mean you might not agree with that, with my assessment, but -- or maybe you have. What is your strategy in your portfolio to deal with that?

I'll let you answer it. It's a question concerning the market.

Well, I mean, in general, there is evidence to that. And that's why I've shown that slide, that yes, in the suburbs, vacancy rates are increasing still. That's an average figure, obviously, but we clearly see that we need to provide more quality. So what does it mean? And I would like to particularly stress what I call amenities and services. So you have to have an environment where you can gather where people like to come to. If it's as isolated as at home, if I may say so, and you go from a place even isolated to even more isolated, why should you go there? And that's why we see a lot of corporations, they say, we cannot bring our people to the outskirts of Zurich or Geneva or whatever city, why would they go there? So you need to give them a really good offer to come together and collaborate. And if the buildings are good enough to do that and you have such examples around the airports, for example, here, then people would come. But if you have old buildings, unflexible buildings, which are maybe also not ESG compliant and other elements, then corporations to hesitate will still rent.

Is this okay? Has it been answered?

Yes, I wasn't talking about the suburbs, I was talking about just the outer border of the CBDs, we can see that's eating a bit into this area.

Yes, that's actually the area where things come a bit together, it is true. You still see a high demand in the city centers. Clearly, people want to be there. And what is different to a couple of years back, it's not just the banks and insurance companies who want to be there, but you have the tech companies and the advisers. And if you are going a bit further out, you need to have good connectivity, you need to have all these services there as well, and it still works. But if you don't have that, it's faster being in a suburb in a way.

Another question here, yes, please.

It's John Vuong from Van Lanschot Kempen. On asset management, this is for Anastasius, could you perhaps put the CHF 400 million that you raised year-to-date into perspective, and to the CHF 600 million that you're looking to raise every year? And also, given that you're seeing, well, more demand for real estate, is this CHF 16 billion, perhaps a bit of too conservative of a target?

Yes. At the moment, this is a target. Maybe if the market a little bit changed a little bit faster, it's going to be more. It is also the leverage from 23% from the pension funds, it could be grow to 30%. So it could be that this number goes to CHF 700 or CHF 800. Yes.

And on that CHF 400 million that you already raised, is that -- did you capture more market share? Or is this really just more inflow into real estate?

Both. More inflow, but we have more shares from the market. It is -- we have more products. We have good products. Our performance from our products are high. We are on the top 3 in each part. So yes, the investor likes our performance, so we get more capital. Yes.

Yes. I mean the question was, is it not -- is there not as enough ambition in the CHF 16 billion? I mean we speak about 3 additional years. And now what you can see on the -- in the current market situation, geopolitical situation, markets can change very, very quickly. And keep in mind, if we speak, we are very stable with our pension system inside Switzerland, all this pension money. But what happens if all the share price goes down, and this was the case for 2 or 3 weeks? Then their allocation inside the real estate market will be too high, so too big. So what will they do at this specific moment? They have 2 options, very bad options if they go on the market and they make sales with the real estate. That's a very bad one. But also not very attractive is that they just stopped further investment inside this market. And you never know how this geopolitical situation will change during the next 3 years. So that's why I say we will go up to those CHF 16 billion, maybe it's more, but you cannot say it definitely at this specific moment.

Okay. Clear. And just as a follow-up on the Globus project, you mentioned 2 different options.

Two different options, I mean, we are currently really in discussions with Globus management, including Central Group, which is the owner of Globus in Switzerland. And they have 3 floor spaces inside our portfolio, Lausanne, Lucerne and Geneva. And now why those 2 options? I mean, I cannot speak for them. But if they will continue in those 3 sites, that's already a good thing. But at the specific moment, I'm not sure if they are ready and opening their minds to invest with us in this Geneva project. That's why we said 2 options because when we showed the Geneva project 1.5 year ago in last Capital Markets Day in Zurich, then we had still a situation with [ Benco ]. At this specific moment, he decided if he spoke with the other side of the 50%, I have no idea, but he said we will do that. That's why we showed this transformation of the building. But if this is still the case, I can just not tell you exactly. Maybe I know more -- I think we will know more in August then when we have our press release concerning the half year results.

And say it doesn't happen. The CapEx requirements are much more -- much less essentially. I've looked at alternative ways to deploy this...

I mean the deployment, we have still a very huge development pipeline. We can, of course, a little bit accelerate the development pipeline or then we can use this money also for further acquisitions on top of the capital increase, or what we can do, we can make less disposals. This is -- we can play with those 3 elements

As I mentioned before, we're comfortable with the 38% leverage. Given the current market environment, there's no plan to significantly...

That's why I didn't mention that payback, Marcel. Is there 1 additional -- 2 additional questions here on the left side? Just start over there, please.

[indiscernible] Zürcher Kantonalbank. Just a question on the property portfolio. If I remember correctly, on the last Capital Markets Day, you stated that you wanted to keep the property portfolio rather stable at CHF 12 billion to CHF 13 billion. Now with the acquisition pipeline that you presented today and the rental income target, CHF 500 million plus, I would say it's fair to assume that the property portfolio would grow. So do you have a portfolio value in mind that you want to reach?

No, we have -- if we speak about fair values portfolio, I mean, one thing is the disposals; on the other side, the acquisitions. And then it's also, of course, the current market situation concerning then where are the interest rates. If you have a positive reevaluation effect by the end of the year or a negative one, so this can change very dramatically and very quickly, as we all know. So there is no goal concerning the fair value. It should be, of course, accretive in -- concerning the fair value, that's for sure. But our goal is the rental income. So more than CHF 500 million rental income then by the end of 2026 should bring us in the fair value. If the market stays like it is approximately to CHF 14 billion, CHF 14.5 maybe billion in the -- after the end of the next 4 years then, by the end of [ 2026 ]. But that's not the main goal because, I mean, speaking about the fair value, we can -- what we can adjust inside the fair value, of course, we can do some developments, we can do some interesting capital allocations, CapEx allocations. But concerning then the other part of this fair value, this is just the market situation where we have no direct impact on it.

Maybe just a follow-up question a little below about the CapEx or the less CapEx and what you could do with the money. One thing you didn't mention is delevering. I mean you could use the money you saved also to pay down debt. So you mentioned 38% loan-to-value. So I assume you just want to stay around that number and not go significantly below. So how confident are you on your A3 rating by Moody's? Because they kind of always say it's kind of weakly positioned in the A3 rating.

It's no more weakly positioned.

They read the news report. They just issued a new report, and we are -- with the slight deleveraging we did over the last couple of years, we are now no longer weakly positioned, and that's why we feel comfortable. As a CFO, it's always okay to go slightly below. But then again, we are committed to deliver this FFO growth. And as we currently see the market situation with the stability in the real estate market, with the financing situation on the other hand, I think there's no immediate need that we would significantly deleverage going forward.

Okay. So around the 38%?

Exactly. But I mentioned that before, the A3 is important for us because this helps us to keep our financing costs where we are. So that is certainly something we keep in mind going forward.

And tapping the Eurobond market, would that be an option?

Never say no. It all depends -- ultimately, it depends on the spreads here. You can swap that. So I mean we could hedge all the currency risk. So ultimately, it depends on the spreads that you get on the euro market. And I think they need to be roughly in line, maybe a tick higher than in Switzerland. Otherwise, it wouldn't make a lot of sense. We still have very good access to the Swiss market. And that has not been the case, say, over the last 2 years where the spreads were, whatever, 30, 40 bps higher than what we had in Switzerland. But that might change again. Also in Europe, you see some changes in the perceived risk of real estate. So then we will certainly have a look at this again.

Then the last question of the room, and then I will look at Florian. Are there some questions? The formal announcement, this is the last question of the room.

One more.

Let's say it's 2027, you reached all your goals for Swiss Prime Site Solutions, would you consider a spin-off, for example, going forward?

The answer is no at the moment. No. This was never a discussion of the asset [ management ] board. So we said what we want to be, very successful now with the asset management. We want to see a certain size that the asset management is also reflected in the share price. So this is our main goal. So there was absolutely no discussion what to do is -- what will we do when we get up to CHF 16 billion, CHF 17 billion. I mean whatever you have is always an option, but there is absolutely no decision concerning the future of the asset management business. By the way, we feel very good with the asset management because this makes us also special. I mean you could compare us with PSP. If we have -- if we wouldn't have the asset management, then we are a second PSP. Is this interesting for our investors? Is it not more interesting you have 2 options, 2 big options inside this country with a different business model? I think -- I prefer this. I would say as coming somewhere from Asia, from abroad, from the States or from Europe, I would say it's fantastic that I have these 2 options of 2 complete -- not completely different, but still different companies inside the country.

And maybe I add to that, maybe what is really important is 99% of our capital is invested in bricks and mortar. That is important to a lot of our investors because they want to be part of the Swiss real estate market, and that is 99% of our capital. We're talking about 1%, but that 1% delivers very attractive yields. Plus, it, in a sense, provides coverage of the entire Swiss real estate market directly, obviously, with our rental income. Indirectly, we benefit from an upswing in the residential market through higher transactions or higher fees, obviously, even though, obviously, this is all owned by pension funds, the real estate.

Okay. Then the very last question over there, just -- 1 more, 2 more? There is still no reaction in the audience. Okay.

So I would like to ask if this building we are sitting in is a good example that a new city center, a new prime location can be created and if you see a few occurrence to be repeated like this in Switzerland.

Yes. I mean is this a good example? I would say definitely yes. But if you make a development, then we are not a trading developer. So we develop for our own portfolio. This means that we have really a long-term view. Long-term view means more than 30, 50 years. And now you know the situation here in Geneva. This is Praille-Acacias-Vernets just behind us, and this will be a huge potential for the canton for the city of Geneva for the future development. And they will need to attack this and to make -- to ask for all the building permission. And then this will be -- the idle situations will be opening of this new district of the canton or city of Zurich, including this direct access to public transport, which is just 1 station away from the main station in Geneva. I always said it's somewhat similar to what we see in the Hardbrücke train in Zurich. So you have just 1 train stop then connecting the city center with Hardbrücke here with -- out of Pont-Rouge, but you -- I mean if you think that everything will develop in just 5 years, this is completely wrong, but that's not the view we have. We have really this long-time investment view. Okay then...

I'm Markus from Bank of America. I have a question on your rent reversion over CHF 30 million coming from like-for-like. Understand it's all coming from reversion. On your slide, I do understand why this is not a reversion from your sitting rent versus market rent. So if it's not then, is there a reversion from your current rent and portfolio to market rent? Because I read it like it's your potential beat to the market rent, so it would be CapEx-driven. So what is the CapEx to reach this 10%...

Okay. A couple of things maybe. The first one is we have a WAULT of -- rounded to 5 years, maybe an additional 2 years, on average, of options, which we cannot change the rent during that time. So say, we have an implicit WAULT of, say, maybe 7 years, and given the 10% that the appraisers give us as a reversionary potential, that translates to roughly 1.2%, 1.5%, 1.6% every year. Obviously, it's not always happening at the same time. It depends which one run off and in which year that happens. So that's the basis. And that's a little bit what we have shown here because we're confident that we can get that. In addition to that, we obviously work on getting higher. And what we've shown here is not that we buy this by putting a huge amount of additional CapEx in it. One of them is that -- one of the examples that we've shown here is at Hardbrücke where we inaugurated the building some 13 years ago. So now typically, the fixed term lease of 10 years as well as the option come to an end, and hence, we can negotiate again with these tenants, and there is no significant CapEx involved in that. It's literally about putting that on a new 10-year contract with all that had happened around that area.

Okay. Thanks a lot. Then the last -- how does this work, Florian? Do I get?

[Operator Instructions] At this time, there are no raised hands. This conclude today's session. I will now hand back to René.

Thank you very much. This was a very short [indiscernible]. So thanks a lot for your attendance. And now it's even more interesting hour now that we have with the visiting of the different buildings here in Geneva. And how does it work, Karin or Florian?

So now as we form 2 groups, and [indiscernible].