PSP Swiss Property AG

Good afternoon to everybody, and thank you very much for attending this conference call. As always, I'd like to do just a short introduction and then to go directly into the Q&A to really have time for questions, I think in this interesting geopolitical times.

We are very pleased with the reported results today. We closed the business year, full year 2021, I would say on a record level operating-wise and also with regard to valuations.

I think most important for us is the achievement of a solid operating result, beating our EBITDA guidance, delivering 3.8% vacancy rate and more so also providing an outlook for the year that we will achieve a below 4% vacancy rate, which underlines our comfort and our clear view that we have the right assets on the right spots with the respective demand. With regard to the rental income, we have shown a good solid rental growth of 4.5%, predominantly driven by an acquisition in Geneva and by the completion of projects.

And more so, we have an EPRA EPS of CHF 4.48, which allows us to increase the dividend, not by CHF 0.05 but CHF 0.10 to CHF 3.75, which indicates also a bit our confidence for future dividend growth of the company. If you look in the past, we have always increased our dividend by CHF 0.05, in certain cases, CHF 0.10.

And if we increase by CHF 0.10, it's because we have a good solid view that we can continue in the next years on our CHF 0.05 pass. And if we then have our comfort and confidence to even further go up, we would then adjust as well.

So I think this is, for us, a very important message, especially because the dividend comes out of earned income without any gain from valuations and without any disposal gains. This comes on the back of a quite strong balance sheet, loan-to-value below 33%.

And clearly, also with credit metrics, ICR and durations, which are very healthy considering the most recent increases in rates, although we have seen in the last few days already a drop on the rates again on certain instances. Having said that, I would say, positive on our outlook.

We will continue with our focused strategy, even more concentrating on CBD allocation, trying to optimize asset by asset, in line with that statement. Clearly, also the asset swap we have undertaken with Swiss Life where we swapped 3 assets of us with 2 assets from them getting [indiscernible] neighboring assets and providing a base for future value growth, rent growth expansions, small transactions, but I think that's a bit our path step-by-step, continuously improving earning streams and cash flows, which allows then us in situations like the financial crisis or most recently through the COVID crisis to be able to continue to deliver on expectations and to deliver a solid dividend path.

Having said that, I would like really to stop here. I know that [ you all follow ] probably the market, so we can go directly into the Q&A.

So could you please give some details for the asset swap with Swiss Life, you [indiscernible]

Reto, I hear you very, very dull.

Well, could you please give some details about the asset swap you made with Swiss Life and what's the reasons for that?

Yes. I apologize.

We have a very, very bad connection, but I understood, the details on the asset swap. On the asset swap, we bought -- took over 2 assets from Swiss Life.

One is Lintheschergasse 10, which is neighboring our Bernerstrasse 81 and really covering now the full block between Globus and Bernerstrasse towards the best [ allot series ] rounding up that area. And the second block, we were able to get is Mühlebachstrasse 2, neighboring our building Grubenstrasse 6.

Don't be surprised, they had to walk that block also twice. There's no Mühlebachstrasse 4.

So we have this joining buildings, really in front of the Stadelhofen railway, which, as you know, best will be completely refurbed in the coming years by the architect called Calatrava. I think asset value size, as we mentioned, rather small, we got these 2 assets plus paid additional roughly CHF 10 million.

The -- in exchange, we gave -- or sold Rue du Pont in Lausanne, Lintheschergasse and Löwenstrasse. And I would say, both portfolios have, I would say, similar rental income.

We get a bit more rental income, but I would say, it's equally sized, equal income. I think the beauty about it, we -- was quite a long process.

It's that there is a value creation potential for both parties, and we have neighboring assets. And so it's [indiscernible] for both.

It's a win-win for both. It goes without saying that we have in-place rental contracts.

So there's no urgency here to do restructuring refurbs. But clearly, we bought some potential.

We exchanged some potential, and we continue on this strategy to look where can we round up our positions.

Is the line better right now? Or...

I hear you very badly. But I can understand it.

Okay. I wanted to ask as well about the reclassifications you did, especially the one in Wallisellen, this CHF 3 million investment volume seems very low.

As I mentioned this morning to [ Andreas ] and I had a talk also afterwards, for us, reclassification has nothing to do with vacancy because we, anyway disclose vacancy amounts. Wallisellen is a business park, which, on the one hand, out of this 5 buildings, we have, I would say, 3, 3.5 well-functioning buildings.

There is a very good, solid tenant structure. We had Microsoft as a long-standing tenant.

But over the years, there was a clear direction towards rent reductions on the back of the additional supply which came into the region. In view of the -- clearly -- fact that Microsoft left the building, we went through what is an alternative we can do.

We can continue to try to find the tenants -- big tenants for that building, something we are doing. But more so, we have started intense discussions with local authorities to see on how can we really reposition a number of those 5 buildings.

I've mentioned this morning, it's difficult to say how many. I would say if not all the 5, but it can be 1 to 3.

And it's also difficult to say to which because depending on what area we can lease out, we would then try also to perhaps move tenants. So that's a certain complexity that's in early stage.

But it's, for us, basically unlettable at the moment because our prime focus is really to follow that route, which, in our view, would generate most value of the -- for the shareholders. Clearly, if somebody comes now, as [ Reto ] mentioned also this morning, a big tenant taking the whole building, we could review that situation.

But the priority we have is to continue that path. And on the back of that, it's clear that we reclassify based on our guidelines, which are basically [ approved that ].

We reclassified, but as it is disclosed, it's nothing to hide, right? We talk practically about it.

We talked a year about -- ago about it. We're talking in meetings about it.

So I think this is for us a known event.

Well, I thank everybody for attending the call. I look forward to the interactions, and I wish you a great day.

Thank you. Bye-bye.