Positive business development in the first half of 2025

In the first half of the year, our net profit increased by 73.8% to CHF 116.8 million (first half-year of 2024: CHF 67.2 million). The revaluation effect amounted to CHF 70.3 million (first half-year of 2024: CHF 6.7 million). Excluding revaluation effect, net profit increased to CHF 62.6 million (first half-year of 2024: CHF 60.5 million). Rental income was down year on year. However, this was offset by higher income from the sale of condominiums and a lower financial expense.

Portfolio changes temporarily lead to a decrease in rental income

Rental income amounted to CHF 103.5 million in the first half of the year (first half-year of 2024: CHF 111.0 million). This development is primarily attributable to changes in the portfolio, with a corresponding impact on the basis for comparison. In the first half of the previous year, we had begun to modernise the commercial building on Freiburgstrasse in Bern. The property still contributed to rental income in the first quarter of 2024. In the second half of 2024, we sold the properties on Missionsstrasse in Basel and Chemin du Gué in Petit-Lancy. This meant that they were no longer generating income in the first half of 2025. In addition, we launched the new-build project at Baarermatte in Baar in the reporting period. The commercial building was therefore only generating income until the end of March 2025.

The cumulative vacancy rate increased compared with the previous year to stand at 2.9% (first half-year of 2024: 1.5%). The increase is mainly attributable to the spaces that are still free in the property on Freiburgstrasse in Bern, our office building at Geneva Airport and vacated space on the Richti site. However, our vacancy rate remains low by industry standards.

The weighted remaining term of fixed-term commercial leases at 30 June 2025 was 5.3 years. Around 11% of leases are due to expire within the next two years. 

At CHF 10.7 million, direct expenses for rented investment properties were down (first half-year of 2024: CHF 13.2 million). The expense ratio declined to 10.3%; the net yield amounted to 3.7%.

One investment property in Bülach was sold in the first half of the year. The building on Marterlochstrasse did not fit with our strategy and was sold to the operating company. At the reporting date the portfolio comprised a total of 79 properties, consisting of 36 residential and 39 commercial properties, as well as 4 properties under construction.

The valuation by Wüest Partner’s external expert resulted in an upward revaluation of the portfolio before taxes of CHF 70.3 million (first half-year of 2024: CHF 6.7 million). The positive value adjustment can be attributed to the successful signing of new leases, higher market rents and the favourable interest rate developments. The applicable capitalisation rates fell slightly.

The market value of the portfolio at the reporting date was around CHF 5.20 billion, slightly above the level at the end of 2024 (31.12.2024: CHF 5.19 billion).

Overall, the Real Estate segment generated net operating profit of CHF 57.8 million (first half-year of 2024: CHF 61.7 million).

Higher contribution to earnings from sale of condominiums

Income from business activities in the Development & Realisation segment increased to CHF 26.0 million (first half-year of 2024: CHF 21.3 million). This development can mainly be attributed to the higher contribution to earnings from the sale of condominiums. In the first half of the year, the main driver was our project on Spiserstrasse in Zurich. Also contributing to the higher income from sales were the projects on Avenue de l’Amandolier and Avenue du Curé-Baud in the Canton of Geneva. The Panorama Eggen project in Lucerne and the Strubenacher Living project in Zumikon, which went on sale in the first half of the year, will ensure that we will continue to generate relevant earning contributions from the sale of condominiums in the years to come.

At CHF 126.3 million, the completed project volume in the Realisation division was above the level of the previous year (first half-year of 2024: CHF 118.5 million). At the same time, it should be noted that construction services were still being provided for third parties in Western Switzerland in the first half of 2024. Of the total volume of projects completed, around 40% related to own projects intended either for our portfolio or for sale. This share will remain stable in the course of the financial year. 

Income from realisation fell in the first half of 2025 to CHF 9.0 million (first half-year of 2024: CHF 10.5 million). This change is based on a lower volume of third-party projects and correspondingly lower income from fees and construction activitiy. The gross margin on third-party projects was 11.9% (first half-year of 2024: 13.4%).

Operating expenses decreased by 3.7% year on year to CHF 20.8 million (first half-year of 2024: CHF 21.6 million), while operating profit was CHF 9.3 million (first half-year of 2024: CHF 3.1 million).

Overall, net profit in the Development & Realisation segment improved significantly, amounting to CHF 5.2 million (first half-year of 2024: CHF 1.2 million).

The order backlog grew to CHF 786 million at the halfway point of the year, corresponding to a good level of capacity utilisation in the Realisation division for more than 24 months.

Allreal is in good financial health

In April 2025, we issued another green bond for CHF 125 million, with a coupon of 1.375% and a maturity of seven years. The average interest rate fell to 1.16% as of the balance sheet date, while the interest lock-in period remained stable at 38 months (31.12.2024: 1.25% / 40 months).

As at the balance sheet date, financial liabilities had increased slightly to CHF 2.76 billion following the distribution to shareholders in April 2025 (31.12.2024: CHF 2.70 billion). Of these, 48.1% were bonds, 34.4% fixed-rate mortgages and 17.5% fixed advances. 

As at the balance sheet date, the equity ratio amounted to 44.0%, net gearing to 104.4% and the interest coverage ratio to 6.0 (31.12.2024: 44.9% / 102.1% / 5.5). The loan to value (LTV) was unchanged at 47.5% as at the reporting date (31.12.2024: 47.5%). We will focus on these parameters in the future as well and ensure long-term stable financing.

Outlook for 2025 full year confirmed

In terms of 2025 full year, we still expect operating profit to be roughly the same as in 2024, as well as stable balance sheet figures. Financing costs will be lower than in the previous year. In the Real Estate segment, we expect rental income to be lower as a result of renovations and tenant changes. However, the decrease remains a temporary effect and will be more than offset in the medium term by improved earnings. In the Development & Realisation segment, we also expect income from the sale of condominiums to rise over the year as a whole, an overall slightly higher construction volume and lower operating expenses.
 

Marc Frei
CFO