Dear shareholders

The Swiss real estate market did well over the reporting year. The main drivers were falling interest rates and ongoing population growth. Commercial premises in well-connected locations saw robust demand. The demand for residential properties is undiminished. In the Realisation division, building costs are no longer rising. The strong market momentum is facing increasing regulation, however, especially in the major cities.

Allreal benefited from the positive environment, with its net profit increasing to CHF 219.3 million (2024: CHF 211.4 million). As expected, rental income fell year on year owing to planned portfolio changes and various one-off effects in the previous year. However, this was almost completely offset by higher earnings from the Development & Realisation segment and a lower financial expense. Net profit excluding the rise in the value of the portfolio amounted to CHF 122.1 million (2024: CHF 122.7 million).

Modern real estate portfolio ensures sustainable rental income

Allreal’s portfolio consists of high-quality properties at key interchange points in the metropolitan regions of Zurich and Geneva. The balanced investment mix covering office, education, industry and residential use ensures reliable dividends and contributes to the high value retention of the portfolio. We realign properties that are not optimally positioned on the market or sell them if there is no potential for development.

In Geneva, we sold several older residential properties to private investors after the balance sheet date. And in Basel, we sold a mixed-use property in Steinenvorstadt at the end of the reporting year. We used the funds released to purchase a modern, practically fully let office building on Rue du Grand-Pré in Geneva. It began generating income when ownership was transferred in February 2026. This will strengthen the office share in the Lake Geneva region and bring the mix of uses into line with the overall portfolio. On balance, these portfolio adjustments will result in higher rental income.

The total renovation of the Forum West office building at Europaplatz on Freiburgstrasse in Bern was finished during the reporting year. In addition to the BLS headquarters, a further education institution has now signed a long-term lease for the building.

In Baar, in the Canton of Zug, we began work on the replacement building at Baarermatte. The office building, which was built in the 1980s, is being replaced by a mixed-use complex that will meet the highest sustainability standards. The office building from the complex will be added to Allreal’s own portfolio and the apartments sold as condominiums. Marketing will start in the first half of 2026.

In total, we signed new leases for more than 52,000 m² in the reporting year, maintaining the existing price level. The valuation by Wüest Partner’s external real estate valuers at the end of the year confirms the high quality of the portfolio. It underwent a positive revaluation of CHF 125.0 million.

Strong contribution to earnings from Development & Realisation

Our integrated business model combines our expertise as an owner of real estate with our skills in development and realisation. As well as optimally exploiting the potential in our own portfolio, we develop and build projects for sale as condominiums and to third parties.
 

In the 2025 financial year, we completed our projects at Spiserstrasse in the City of Zurich and Avenue de l’Amandolier in Geneva on schedule. Both projects contributed to the significant increase in income from sales Development. The Panorama Eggen in Lucerne and Strubenacher Living in Zumikon projects have now entered the marketing and realisation phase. We are happy with the current occupancy rate and therefore optimistic that all units will be sold by the time construction work is completed. We also anticipate the sale of condominiums to contribute to earnings accordingly over the next few years.

“In the 2025 financial year, we completed our projects at Spiserstrasse in the City of Zurich and Avenue de l’Amandolier in Geneva on schedule. Both projects contributed to the significant increase in income from sales Development.”

Significant milestones were reached in various development projects during the reporting period. For example, we successfully held competitions for several plots of land, including on Sonnentalstrasse next to Stettbach station in Dübendorf and on Zürcherstrasse in Schlieren. We will be comprehensively renovating our property on Josefstrasse in the City of Zurich. The legally enforceable construction permit has already been obtained and construction is scheduled to start at the beginning of next year. In Winterthur, we developed a masterplan for the Vitus site together with the city’s governing body. This sets the development priorities and forms the basis of the work to come.

Given the high demand, acquiring new plots of land is challenging. Nevertheless, we managed to acquire two neighbouring plots in Zumikon in the reporting year. We extended this site at the beginning of January 2026 with an additional purchase. Over the next few years, we will realise a new residential development on the site spanning a total of around 8100 m².

In Zurich Seebach, we developed the Köschenrüti garden town residential development, with around 300 apartments, for one customer as a full-service provider. The legally enforceable construction permit has already been obtained. Allreal will realise the project as total contractor. Furthermore, we signed a contract of sale with the owners for 93 apartments that will be completed by 2030 as part of the new-build project on the northern site and serve as another example of how we constantly modernise our residential portfolio.

The volume of projects completed in the Realisation division increased to CHF 282.6 million. Various construction projects for third-party clients were successfully completed in the reporting year, including Santiago Calatrava’s Haus zum Falken by Stadelhofen railway station and the major project Höfe Adliswil. All current construction projects are progressing on schedule.

Good GRESB rating recognises sustainability efforts

Sustainability remains a key issue for us. In launching the new 2025–2028 strategy cycle, we also turned our operational focus towards the issues of biodiversity, circulatory capacity and efficiency measures. With the measurement values achieved in 2025, we are on track to halve the use of non-renewable energy by 2030 and reach net zero across our portfolio by 2050. We had our portfolio rated by GRESB during the reporting year and immediately achieved a four-star rating with 86 points out of 100 – the second-highest possible. We also did very well in Development, receiving 94 points out of 100.

Stable distribution and changes on the Board of Directors

The Board of Directors is proposing to the annual general meeting to be held on 17 April 2026 a stable distribution of CHF 7.00 per share. Half of this comes from tax-privileged reserves from contribution of capital for private Swiss investors.

In line with the step-by-step renewal of the Board of Directors, Chair Ralph-Thomas Honegger and member Peter Spuhler will not be standing for re-election at the next annual general meeting.

The Board of Directors will propose Philipp Gmür as the new Chair. He has been a member since 2019. A Doctor of Law and a lawyer, Philipp Gmür is an experienced executive and holds several mandates in boards of directors and boards of trustees. He previously had various senior roles at Helvetia Group, most recently Group CEO from 2016 to 2023.

The Board of Directors will propose Beat Fellmann and Martin Frischknecht to the annual general meeting for election as new members. Beat Fellmann, born in 1964, has a Master’s degree in Business Administration from the University of St. Gallen and is a certified public accountant. He sits on several supervisory bodies and was CFO of the listed companies Implenia and Valora for many years. Martin Frischknecht, born in 1968, has a Doctorate in economics from the University of St. Gallen and a Master’s degree in Finance from London Business School. He is a member of various boards of directors and worked for Credit Suisse for over 20 years, most recently as Managing Director and member of the Management Committee of Investment Banking Switzerland.

The success we enjoyed in 2025 is, above all, testament to our committed employees. We would like to thank them most sincerely for the work they put in and the dedication they show every day.

On behalf of the Board of Directors and Group Management, we would also like to express our thanks to you – our valued shareholders – for the trust and faith you have placed in us.