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Introduction & Market Context
PSP Swiss Property (SWX:PSPN) released its half-year results for H1 2025 on August 19, 2025, revealing a 24.3% increase in net income despite challenges in the Swiss real estate market. The company reported a total portfolio value of CHF 10.0 billion, consisting of 149 investment properties and 12 development properties, representing a modest 0.3% increase from December 2024.
The Swiss property market shows a bifurcation between prime and secondary locations, with PSP noting healthy letting markets and good business sentiment in key cities like Zurich and Geneva, while demand remains weak in secondary locations. The company operates in an economic environment with projected GDP growth of 1.3% in 2025 and 1.2% in 2026, with inflation expected to remain low at 0.1% in 2025 and 0.5% in 2026.
Quarterly Performance Highlights
PSP Swiss Property reported net income of CHF 194.3 million for H1 2025, a significant 24.3% increase compared to H1 2024. However, net income excluding changes in fair value of investment properties (A-RE) decreased by 5.9% to CHF 106.9 million. Rental income declined slightly by 1.3% to CHF 173.9 million.
The company’s portfolio experienced positive valuation changes of CHF 113.4 million in H1 2025, significantly higher than the CHF 44.7 million reported in H1 2024. This valuation uplift was supported by a decrease in the weighted average discount rate from 3.82% in 2024 to 3.56% in H1 2025.
As shown in the following key financial figures table, earnings per share increased to CHF 4.24, up 24.3% from the previous year:
The company’s EPRA performance measures, which provide standardized metrics for the real estate industry, show a slight decrease in earnings per share (EPS) but an increase in net reinstatement value (NRV):
Portfolio & Vacancy Trends
PSP Swiss Property’s portfolio remains concentrated in Switzerland’s major cities, with 61% of the portfolio value located in Zurich, followed by Geneva (14%), Basel (7%), and Bern (5%). This strategic focus on prime locations is illustrated in the following geographical distribution:
Despite the company’s prime location strategy, vacancy rates increased to 4.0% as of June 2025, up from 3.2% at the end of 2024. The company expects the vacancy rate to improve to 3.5% by year-end 2025. The following chart illustrates the relationship between the company’s real estate portfolio value and vacancy rate over time:
The company’s lease expiry profile shows a well-distributed maturity schedule, with a weighted average unexpired lease term (WAULT) of 5.0 years. Of the 2025 lease maturities totaling CHF 28.3 million, 59% have already been renewed:
Development Projects
PSP Swiss Property is advancing several development projects across Switzerland’s major cities. The company’s "Quartier des Banques" project in Geneva encompasses multiple properties with a combined letting space of approximately 13,640 square meters. Other significant projects include the "Bollwerk" in Bern (completion expected in Q3 2025) and the "Hôtel des Postes" in Lausanne (completion expected in early 2026).
The following table outlines the capital expenditure and potential rental income from these development projects:
Green Finance & Sustainability
Sustainability has become a core focus for PSP Swiss Property, with the company implementing a comprehensive green finance policy. The company has achieved a 100% green bond portfolio and has implemented sustainability-linked loans. In May 2025, the company published its Green Bond Report, highlighting its commitment to sustainable financing:
PSP Swiss Property maintains a strong capital structure with an LTV ratio of 35.0%, an average cost of debt of 1.04%, and a weighted average loan maturity of 4.0 years. The company has CHF 0.815 billion in unused credit lines and maintains a Moody’s rating of A3 with a stable outlook.
Forward-Looking Statements
Looking ahead, PSP Swiss Property expects to reduce its vacancy rate from the current 4.0% to approximately 3.5% by year-end 2025. The company continues to focus on its development pipeline, with several projects scheduled for completion in 2025 and 2026 expected to generate additional rental income of approximately CHF 10.4 million.
The company’s performance in H1 2025 shows resilience in a challenging market environment, with strong valuation gains offsetting slight declines in rental income. The focus on prime locations and sustainable financing positions PSP Swiss Property well for future growth, though the increasing vacancy rate remains a concern that management will need to address in the coming quarters.
PSP Swiss Property’s share price has responded positively to the company’s performance, increasing by 13.3% compared to December 2024, outperforming relevant market indices. The company’s consistent dividend policy is illustrated in the following chart showing per share distribution history:
Full presentation:
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