Fast Take PSP Swiss Property

Research evidence excerpt

Fast Take PSP Swiss Property

Forecast returns

Forecast price appreciation 17.1%

Forecast dividend yield 2.8%

Forecast stock return 19.8%

Market return assumption 5.2%

Forecast excess return 14.6%

Company Description

PSP Swiss Property is one of Switzerland's leading real estate companies. Its portfolio is

primarily located in Zurich and other large metropolitan areas, such as Geneva, Basel, Bern

and Lausanne. The company is focused on high-quality office-led properties, including mix-

uses, such as retail, residential, hotel and logistics. PSP conducts a limited amount of

development activity. It invests exclusively in Switzerland and is headquartered in Zug.

Valuation Method and Risk Statement

Our valuation methodology is based on the concept of economic profit, comparing the return

on invested capital with the cost of capital. The real estate sector can be cyclical and faces

risks at a number of levels. First the level of the economy both macro and local can adversely

affect demand and the ability of tenants to pay rent. Excessive levels of supply can also lead to

falling rents. Rising interest rates can impact the security of the tenant base, lower

development margins significantly, and reduce investment appetite. Interest rates, bond

yields and the relative attractions of other asset classes can all impact property values.

Property values can also be affected by changes in planning, taxes, technology and lease

structures. These risks can be amplified in the real estate sector through development

exposure, gearing and the rating. PSP is exposed to several risks. Changes in the economy,

both macro and micro, can lead to changes in supply and demand for real estate. Rising

interest rates can have a material impact on the value of PSP's properties and rents. Further,