Quarterly results as per 31 March 2013

Real estate portfolio

At the end of March 2013, the real estate portfolio included 166 office and commercial properties in prime locations. In addition, there were five development sites and two individual construction projects. The carrying value of the total portfolio was CHF 6.324 billion (end of 2012: CHF 6.283 billion). During the reporting period, no investment properties were acquired nor sold. In the first quarter of 2013, the following new constructions in Zurich were successfully completed and transferred to the investment property portfolio (mainly fully let):
i) Brandschenkestrasse 152b (“Kesselhaus”), ii) Limmatstrasse 250-254/264/266 („Löwenbräu RED“) and iii) Theaterstrasse 22 („Vorderer Sternen“). The other ongoing site developments progressed as planned.

Vacancy rate

At the end of March 2013, the vacancy rate stood at 8.8% (end of 2012: 8.0%). 1.8% points of the 8.8% were due to ongoing renovation work on various properties. Thereof 0.6% points related to the property at Route des Acacias 50/52 in Carouge, which is fully let since mid-April 2013. 0.4% points concerned the conversion of the property at Aarbergstrasse 94 in Biel. The properties in Zurich West and Wallisellen (carrying value CHF 0.9 billion) contributed 3.2% points to the overall vacancy rate. The remaining properties with a carrying value of CHF 5.0 billion (i.e. the total investment portfolio excluding the objects under renovation as well as those in Zurich West and Wallisellen) made up 3.8% points.

Of the lease contracts maturing in 2013 (CHF 42.0 million), 58% had already been renewed respectively extended at the end of March 2013.

Quarterly results Q1 2013

Net income excluding changes in fair value increased from CHF 39.8 million (Q1 2012) to CHF 41.2 million. Corresponding earnings per share amounted to CHF 0.90 (Q1 2012: CHF 0.91). The slight decrease was due to the sale of own shares in 2012 and the resulting higher average number of outstanding shares. For PSP Swiss Property, net income excluding gains/losses on real estate investments is the basis for the distribution to shareholders.

Net income including changes in fair value amounted to CHF 53.0 million (Q1 2012: CHF 39.7 million). Earnings per share including changes in fair value amounted to CHF 1.15 (Q1 2012: CHF 0.91). The initial application of the new IFRS 13 standard (Fair Value Measurement using the new concept of “Highest and Best Use”) resulted in a positive value adjustment of CHF 15.4 million.

Rental income decreased slightly to CHF 68.0 million (Q1 2012: CHF 68.5 million). With CHF 12.8 million, operating expenses remained at the level of Q1 2012. Compared to Q1 2012, financial expenses decreased considerably by CHF 2.1 million, respectively 20.1% to CHF 8.2 million due to the favourable interest rate environment and the replacement of matured interest rate swaps.

At the end of March 2013, net asset value (NAV) per share was CHF 81.81 (end of 2012: CHF 80.48). NAV before deducting deferred taxes amounted to CHF 96.51 (end of 2012: CHF 95.00).

Strong capital structure

With a loan-to-value of 28.4% (end of 2012: 28.4%), the capital structure remains very solid. Currently, unused committed credit lines amount to CHF 330 million.

Due to interest rate hedging transactions, PSP Swiss Property will continue to benefit from the historically low interest rate levels in the medium term. At the end of March 2013, the passing average interest rate amounted to 2.13% (end of 2012: 2.20%) and the average fixed-interest period was 3.8 years (end of 2012: 3.7 years). No major committed bank loans will mature until 2017.

In March 2013, the rating agency Fitch confirmed PSP Swiss Property Ltd’s rating with an “A-” and stable outlook.

Subsequent events

On 10 April 2013, a CHF 150 million bond was repaid.

Based on a resolution of the Annual General Meeting on 9 April 2013, a cash payment of CHF 3.20 per outstanding share (totaling CHF 146.8 million) was made out of capital contribution reserves on 16 April 2013.

Outlook 2013

Despite all the economic imponderabilities, PSP Swiss Property remains confident about the future: the Company is well established on the Swiss real estate market with a strong capital base and a high-quality property portfolio.

The Company will stick to its long-term, value-oriented and judicious acquisition strategy and to its conservative financing policy.

In 2013, financial resources will mainly be used for the renovation and modernisation of selected properties to further enhance their attractiveness as well as for the development of the sites and projects.

Based on the assumption of an unchanged property portfolio, PSP Swiss Property expects an EBITDA excluding changes in fair value of approximately CHF 240 million for 2013 (2012: CHF 238.3 million). With regard to vacancies, a rate of approximately 10% at year-end 2013 is expected (end of March 2013: 8.8%); the increase will mainly be caused by renovation work on Bahnhofplatz and Bahnhofquai in Zurich.

Key figures

Key financial figures	Unit	2012	Q1 2012	Q1 2013	Δ in %1
Rental income	CHF 1 000	272 849	68 476	67 982	- 0.7
EPRA like-for-like rental change	%	1.5	2.9	- 0.4
Net changes in fair value of real estate investments	CHF 1 000	266 851	0	15 389
Income from property sales	CHF 1 000	12 924	226	75
Total other income	CHF 1 000	8 351	3 660	3 428
Net income	CHF 1 000	368 385	39 721	52 967	33.3
Net income excl. gains/losses on real estate investments2	CHF 1 000	161 367	39 794	41 191	3.5
EBITDA excl. gains/losses on real estate investments	CHF 1 000	238 308	59 778	58 875	- 1.5
EBITDA margin	%	81.0	82.5	82.4
Total assets	CHF 1 000	6 356 255	6 065 309	6 396 334	0.7
Shareholders’ equity	CHF 1 000	3 691 551	3 334 124	3 752 586	1.5
Equity ratio	%	58.1	55.0	58.7
Return on equity	%	10.6	4.8	5.7
Interest-bearing debt	CHF 1 000	1 808 286	1 907 341	1 818 182	0.5
Interest-bearing debt in % of total assets	%	28.4	31.4	28.4
Portfolio key figures
Number of properties	Number	163	167	166
Carrying value properties	CHF 1 000	5 968 097	5 699 504	6 104 637	2.3
Implied yield, gross	%	4.7	4.8	4.5
Implied yield, net	%	3.9	4.2	3.9
Vacancy rate end of period (CHF)	%	8.0	7.4	8.8
Number of sites and development properties	Number	9	10	7
Carrying value sites and development properties	CHF 1 000	314 430	278 373	219 643	- 30.1
Employees
End of period	Posts	84	85	86
Equal full-time employees	Posts	78	78	79
Per share figures
Earnings per share (EPS)3	CHF	8.21	0.91	1.15	26.8
EPS excl. gains/losses on real estate investments3	CHF	3.60	0.91	0.90	- 1.6
Distribution per share	CHF	3.204	n.a.	n.a.
Net asset value per share (NAV)5	CHF	80.48	76.13	81.81	1.7
NAV share before deducting deferred taxes5	CHF	95.00	89.78	96.51	1.6
Share price end of period	CHF	86.55	80.20	86.50	- 0.1

1	Change to Q1 2012 or carrying value as of 31 December 2012 as applicable.
2	“Annual net income excluding gains/losses on real estate investments” corresponds to the consolidated annual net income excluding net changes in fair values of the real estate investments, realised income on investment property sales 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.
3	Based on average number of outstanding shares.
4	For the 2012 business year. Cash payment was made on 16 April 2013.
5	Based on number of outstanding shares.