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EQS-Adhoc: Annual results as per 31 December 2020 -2-

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DJ EQS-Adhoc: Annual results as per 31 December 2020

EQS Group-Ad-hoc: PSP Swiss Property AG / Key word(s): Annual Results
Annual results as per 31 December 2020
23-Feb-2021 / 07:07 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 KR
The issuer is solely responsible for the content of this announcement.
PSP Swiss Property with another successful business year. Proposal for an increased dividend of CHF 3.65 per share.
To date, PSP Swiss Property has managed the challenges due to the corona crisis well. The lockdown in spring 2020 and
the regulatory measures towards the end of 2020 had - due to rental income structure - only a marginal impact on the
annual results. Ebitda excluding gains/losses on real estate investments of CHF 271.1 million and vacancies of 3.0% are
in line with the guidance of the Company.
Real estate portfolio
At the end of 2020, the value of the portfolio was CHF 8.577 billion (end of 2019: CHF 7.982 billion).
With effect from 1 August 2020, we entered an asset swap with Zurich Insurance Group. The commercial building at
Seilerstrasse 8 in Bern with 4'500 m^2 rental space was acquired for CHF 23.7 million (we already own the immediately
adjacent property at Seilerstrasse 8a). As a counter transaction, the development property at Zurlindenstrasse 134 in
Zurich was sold for CHF 15.0 million, resulting in a gain of CHF 7.6 million.
End of September 2020, we acquired three attractive commercial buildings in Geneva's prime downtown location for CHF
295 million (CHF 304.1 million including transaction costs). The three adjacent properties are located at Rue de la
Confédération 2 (8'100 m^2 rental space), Rue de la Corraterie 5/7 (5'400 m^2) and Rue de la Cité 6 (2'100 m^2). The
substance of the properties is very good and the location between the banking quarter, the old town and the prestigious
Rue du Rhône is highly frequented. The main tenant is the seller UBS; smaller areas are let to five small companies.
UBS will maintain its branch office at Rue de la Confédération 2 following layout modifications in the properties over
the next two years. UBS will return a large part of the rented space in the two properties Rue de la Corraterie 5/7 and
Rue de la Cité 6 at the end of March 2022.
At the end of March 2020, we acquired a plot with a commercial building (built in 1975/1991) at Grubenstrasse 6 in
Zurich (district 2) for CHF 33.5 million. We will replace the compound with a modern new building offering a mixed use
(around 5'200 m^2 of office and 6'100 m^2 of commercial space). The investment total will amount to approximately CHF
35 million. The new property will benefit from its good location; the bus and suburban railway stations Zurich Binz are
located right next to the building. We submitted the building application in mid-May 2020. Demolition work on the
existing building was completed end of September 2020. The new building will be realised between 2021 and 2023.
The office building at Grosspeterstrasse 18 in Basel no longer meets today's requirements. Planned is a new
construction with around 5'600 m^2 of office space; 50% has already been pre-let to Swisscom. A further 8% of the space
has been pre-let to a catering operator. The investment total amounts to around CHF 37 million. In August 2020, we
started the dismantling process. Completion is scheduled for the end of 2022.
The properties acquired at Bärenplatz in Bern in January 2019 will be extensively renovated and modernised by the end
of 2021. The investment sum amounts to around CHF 16 million. The ground floor and the first basement floor are
intended to be used for gastronomy (around 1'100 m^2), with office space above (around 1'300 m^2) and some small
apartments (around 900 m^2) in the uppermost parts of the building. 30% of the space (gastronomy area) has already been
pre-let. Negotiations with a potential office tenant are advanced.
The hotel project "Rue du Marché" in Geneva with an investment sum of around CHF 35 million has successfully been
completed. The hotel operator citizenM started operations at the beginning of September 2020.
The revaluation of the properties resulted in an appreciation of CHF 101.6 million. Thereof, CHF 93.7 million were
related to the investment portfolio and CHF 7.9 million to the sites and developments projects. At year-end 2020, the
portfolio's weighted average nominal discount rate stood at 3.20% (year-end 2019: 3.32%). The appreciation resulted
mainly from the lower discount rate as well as from various lettings and the reduction in vacancies. On the other hand,
more cautious income forecasts in connection with Covid-19 resulted in lower valuations for a number of properties.
At the end of 2020, the vacancy rate stood at 3.0% (end of 2019: 3.5%). 0.5 percentage points of all vacancies is due
to ongoing renovations. Of the lease contracts maturing in 2021 (CHF 52.4 million), 67% were already renewed. The wault
(weighted average unexpired lease term) of the total portfolio was 4.1 years. The wault of the ten largest tenants,
contributing around 30% of the rental income, was 5.2 years.
In order to continue to play our part in reaching national and international goals to fight climate change, we will
further reduce our properties' specific CO[2] emissions. During the reporting period, we have set a new CO[2] target
and the corresponding CO[2] reduction path until 2050. It is our goal to reduce by half the specific CO[2] emissions by
2035 (based on 2019 emissions).
Annual results 2020
Net income excluding gains/losses on real estate investments was CHF 215.8 million; this corresponds to an increase of
CHF 0.6 million or 0.3% compared to the previous year (2019: CHF 215.2 million). In this respect, it is worth
mentioning that in 2019 the release of deferred taxes at the level of net income excluding gains/losses on real estate
investments had a positive one-off effect of CHF 22.1 million. Excluding this amount, operating net income rose even
more by CHF 22.7 million or 11.8% in 2020. Earnings per share excluding gains/losses on real estate investments, which
is the basis for the dividend distribution, amounted to CHF 4.70 (2019: CHF 4.69).
Rental income increased by CHF 5.8 million to CHF 296.3 million (2019: CHF 290.5 million). This is despite the fact
that rent reliefs of CHF 4.6 million were recorded in connection with the lockdown. Income from the sale of
condominiums and projects was up by CHF 3.3 million to CHF 16.1 million (2019: CHF 12.8 million). Capitalised own
services increased by CHF 1.3 million to CHF 6.2 million (2019: CHF 4.9 million). Furthermore, other income was up by
CHF 3.3 million (mainly because of higher revenue from VAT recovery) to CHF 6.4 million (2019: CHF 3.1 million).
Operating expenses decreased by CHF 2.2 million to CHF 55.2 million (2019: CHF 57.4 million). Financial expenses
declined by CHF 5.9 million to CHF 13.2 million (2019: CHF 19.1 million).
Net income reached CHF 292.1 million (2019: CHF 453.4 million). One-off effects during the previous year also explain
the decline in net income by CHF 161.3 million or 35.6%. In addition to the tax effect already mentioned, the portfolio
appreciation in the reporting year was lower at CHF 101.6 million compared to 2019 (CHF 244.2 million). Furthermore in
2019, income of CHF 15.0 million resulted from the sale of two investment properties (2020: CHF 0 million). Earnings
per share amounted to CHF 6.37 (2019: CHF 9.89).
At the end of 2020, net asset value (NAV) per share was CHF 99.83 (end of 2019: CHF 97.02). NAV before deducting
deferred taxes amounted to CHF 119.57 (end of 2019: CHF 115.82).

Strong capital structure
With total equity of CHF 4.579 billion at the end of 2020 - corresponding to an equity ratio of 52.8% (end of 2019: CHF
4.450 billion or 55.4%) - the equity base remains strong. Interest-bearing debt amounted to CHF 3.057 billion,
corresponding to 35.3% of total assets (end of 2019: CHF 2.596 billion or 32.3%). The small increase compared to
mid-2020 (34.3%) was due to the debt-financed acquisition of the properties in Geneva totalling CHF 304 million. At the
end of 2020, the average cost of debt was low at 0.47% (end of 2019: 0.73?%). The average fixed-interest period was 5.0
years (end of 2019: 4.4 years). Currently, unused credit lines amount to CHF 1 billion (thereof CHF 700 million
PSP Swiss Property has ratings from two international rating agencies: Senior Unsecured Rating A- (outlook stable) from
Fitch and A3 Issuer Rating (outlook stable) from Moody's.
Remarks with regard to the corona crisis
The measures taken by the authorities in spring 2020 and towards the end of 2020 to combat coronavirus do have a severe
impact on the population and the economy. How long it will take to return to normality is impossible to predict from
today's perspective. This depends on how a future spread of the coronavirus can be contained and how severe the spring
2020 lockdown and current restrictions have damaged or will damage the economy.
Thanks to its broad portfolio diversification and its focus on office use in central locations, the exposure of PSP
Swiss Property in the sectors affected by the official business closures is manageable. Moreover, the impact on these
tenants varies widely. Overall, rent reliefs in the amount of CHF 4.6 million were recognised during the reporting
period. The level of rent collection was high at 97% in 2020. At the end of 2020, outstanding lockdown-related rent
receivables amounted to CHF 5.4 million.
Subsequent events
On 4 February 2021, a 0.200?% bond (all-in 0.22?%) with a volume of CHF 200 million and a maturity in 2031 was issued.
On 16 February 2021, a 0.000?% private placement (all-in -0.42?%) with a volume of CHF 50 million and a maturity in
September 2021 was issued.
Material proposals to the Annual General Meeting on 31 March 2021

(MORE TO FOLLOW) Dow Jones Newswires

February 23, 2021 01:10 ET ( 06:10 GMT)

For the business year 2020, the Board of Directors proposes an increase in the ordinary dividend payment to CHF 3.65
per share (previous year: CHF 3.50). In relation to net income excluding gains/losses on real estate investments, this
corresponds to a payout ratio of 77.6%; in relation to the 2020 year-end share price of CHF 118.30, it corresponds to a
yield of 3.1%.
Except for Mr. Nathan Hetz, all members of the Board of Directors and the Compensation Committee as well as Mr. Luciano
Gabriel as Chairman of the Board of Directors stand for re-election. The Audit Committee and the Compensation Committee
shall consist of the three current members: Peter Forstmoser, Adrian Dudle, and Josef Stadler; Peter Forstmoser is
again foreseen as Chairman of both committees. The Nomination Committee shall also consist of the current three
members, Josef Stadler (Chairman), Corinne Denzler and Adrian Dudle.
Furthermore, the Board of Directors proposes the re-election of Ernst & Young AG, Zurich, as statutory auditors for the
business year 2021.
Market environment and outlook 2021
An outlook on the Swiss economy remains difficult, especially due to the measures enacted by the authorities in
mid-January 2021 and the uncertainties about the future development of the corona crisis. These imponderables might
weigh on the economy well into the current business year. It is just as difficult to predict the impact on the property
sector. We assume that demand for office space will continue to be strongest in well-located and easily accessible
locations, while marketing and letting in peripheral locations will remain difficult. The non-food retail rental market
is likely to remain very difficult for some time to come.
Our focus remains unchanged: we modernise selected properties, develop our projects and concentrate on our letting
activities. We will only consider acquisitions if they allow for added value in the long term. In financing, we will
continue to pursue our proven conservative approach. And, as in the past, we will consider tapping the capital market
if required.
For the 2021 business year, we expect a slightly higher ebitda excluding gains/losses on real estate investments of
around CHF 275 million (2020: CHF 271.1 million). With regard to the vacancies, we expect a rate of around 4.5% at
year-end 2021 (end of 2020: 3.0%). The forecasts with regard to ebitda and vacancies are conditional on the future
development of the corona crisis. They are based on the assumption of an imminent easing of the current partial
lockdown and a relatively swift normalisation of the general economic environment.
Key figures
Key financial figures Unit 2019 2020 +/-^1
Rental income CHF 1 000 290 460 296 274 2.0%
EPRA like-for-like change % 1.2 -0.2^2
Net changes fair value real estate investments CHF 1 000 244 176 101 578
Income property sales (inventories) CHF 1 000 12 835 16 115
Income property sales (investment properties) CHF 1 000 14 961 0
Total other income CHF 1 000 7 957 12 571
Net income CHF 1 000 453 425 292 091 -35.6%
Net income excl. real estate gains^3 CHF 1 000 215 214 215 795 0.3%
Ebitda excl. real estate gains CHF 1 000 256 145 271 058 5.8%
Ebitda margin % 82.0 83.4
Total assets CHF 1 000 8 036 244 8 665 045 7.8%
Shareholders' equity CHF 1 000 4 450 220 4 579 165 2.9%
Equity ratio % 55.4 52.8
Return on equity % 10.5 6.5
Interest-bearing debt CHF 1 000 2 596 136 3 057 204 17.8%
Interest-bearing debt in % of total assets % 32.3 35.3
Portfolio key figures
Number of investment properties Number 162 160
Carrying value investment properties CHF 1 000 7 259 441 7 681 998 5.8%
Implied yield, gross % 4.0 3.8
Implied yield, net % 3.4 3.3
Vacancy rate end of period (CHF) % 3.5 3.0
Number of sites/development properties Number 12 16
Carrying value sites/development properties CHF 1 000 722 223 895 091 23.9%
Employees/FTE People 94/89 96/89
Per share figures
Earnings per share (EPS)^4 CHF 9.89 6.37 -35.6%
EPS excl. real estate gains^4 CHF 4.69 4.70 0.3%
EPRA EPS CHF 3.94 4.32 9.7%
Distribution per share CHF 3.60 3.65^5 1.4%
Net asset value per share (NAV)^6 CHF 97.02 99.83 2.9%
NAV per share before deferred taxes^6 CHF 115.82 119.57 3.2%
EPRA NRV CHF 119.20 123.19 3.3%
Share price end of period CHF 133.60 118.30 -11.5%
1 Change to 2019 or carrying value as of 31 December 2019 as applicable.
2 EPRA like-for-like growth excluding Covid-19 impact is +1.5%.
3 'Net income excluding gains/losses on real estate investments' corresponds to the net income excluding
net changes in fair value of the real estate investments, net income on sales of investment properties
and all of the related taxes. Income from the sale of properties which were developed by the Company
itself is, however, included in the 'net income excluding gains/losses on real estate investments'.
4 Based on average number of outstanding shares.
5 Proposal to the AGM on 31 March 2021 for the business year 2020: dividend payment.
6 Based on number of outstanding shares. End of ad hoc announcement
Language: English
Company: PSP Swiss Property AG
Kolinplatz 2
6300 Zug
Phone: +41417280404
Fax: +41417280409
E-mail: info@psp.info
Internet: www.psp.info
ISIN: CH0018294154
Valor: 1829415
Listed: SIX Swiss Exchange
EQS News ID: 1170292

End of Announcement EQS Group News Service

1170292 23-Feb-2021 CET/CEST

END) Dow Jones Newswires

February 23, 2021 01:10 ET ( 06:10 GMT)

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