Swiss Prime Site: H1 Preview: Expecting further revaluation gains

Research evidence excerpt

Swiss Prime Site: H1 Preview: Expecting further revaluation gains

Swiss Prime Site UBS Research

Estimate changes and valuation

Ahead of H1 26 results to be published on 20 August 2026, we update our estimates

and PT. We slightly cut our rental income assumptions, as we believe the company has

been more successful in selling down than buying additional assets given the tightness

of the market. In fact, in FY25 the company had mentioned sell down of non core

buildings of around CHF136m and had mentioned plans to further optimize the

portfolio with continued sell downs of up to CHF150m. However, we would expect to

see relettings for major tenants in the Prime tower in Zurich, which should support like-

for-like rental growth, where we pencil in 2.0% for FY26. For FY28 we continue to be

above the company's mid term guidance of CHF500m+, but nevertheless slightly reduce

that estimate as we see potential delays of finalising Jelmoli. We would expect mid term

targets to be updated at the company's CMD which was announced to take place in

Zurich on 26 October 2026.

We pencil in a significant drag on interest cost for FY26, from the cash impact of the

incentivized conversion invitation of the convertible bond issued in 2023. For FY27/28

we leave our interest expense assumptions unchanged. We slightly reduce the expense

ratio though, amid further reduced number of properties, which allows for efficiency

gains we believe. Lastly, we slightly raise our expected revaluation gains, where we

expect further tailwinds from lower interest rates as well as reletting success. We now

expect CHF314m for FY26, up from CHF217m in FY25, and corresponding to around

2.3% of the portfolio value. Yet, we expect group LTV to be rising slightly overall from