Letter to our shareholders

Dr. Wolfgang Zürcher, Chairman

Roland Friederich, CEO/CFO

Ladies and Gentlemen,

Continued optimisation was the dominant theme of the 2019/20 financial year for Züblin Immobilien Holding AG. The focus at portfolio level was on growth and a reduction in vacancies, while administrative costs were cut back further. In what remains a demanding market environment, Züblin is maintaining its conservative investment strategy. This is based on clearly defined location criteria, a concentration on selected tenant segments and the setting of rigorous yield targets.

Solid earnings position

The acquisition of a new investment property in April 2019 together with the reduction in vacancies boosted net operating income by CHF 1.1 million to CHF 8.5 million in the year under review (previous year: CHF 7.4 million).

Significant savings were made in personnel and administrative expenses, resulting in a reduction of CHF 1.7 million compared with the prior year.

The valuation of the real estate portfolio was impacted by the uncertainty surrounding COVID-19. After an upward revaluation of CHF 3.0 million in the first half of the year, market values fell back again at the reporting date, resulting in a revaluation effect of CHF 0.2 million (previous year: CHF 0.6 million).

Earnings before taxes (EBT) rose by CHF 2.4 million to CHF 6.2 million.

Due to one-off tax items in the previous year, net earnings at Züblin Immobilien Holding AG fell from CHF 6.2 million to CHF 4.6 million in financial year 2019/20, despite the positive operating performance referred to above.

Real estate portfolio

As of 31 March 2020, the Züblin portfolio consists of six office properties in Zurich (5) and Bern (1) and their economic catchment areas. The total value increased by CHF 17.0 million to CHF 217.9 million during the financial year, mainly due to the new acquisition in Zurich-Oerlikon together with value-enhancing investments.

The main property-related metrics performed well. The reduction in vacancies through a new letting in Berne, various lease extensions and the new property all contributed to this. Annualised rental income rose by 15% to CHF 9.4 million and the occupancy rate went up from 90.0% to 91.8%. The weighted average lease term (WALT) of the rental contracts is 3.8 years.

Yields remained low on the Swiss real estate market in the 2019/20 financial year, reflecting continued firm demand. However, the COVID-19 pandemic and the associated uncertainties shortly before the balance sheet date led to an additional risk premium. The CBD located pure office properties in the Züblin portfolio in Zurich were less affected by this than the properties in Berne, Baden and Egg.

The restrictions imposed by the Swiss authorities are also affecting the real estate industry. Züblinʼs asset management is constantly monitoring the direct and long-term impact of the lockdown on tenants. The aim is to find solutions that safeguard revenues via a process of dialogue with affected tenants.

At the time of writing, it is impossible to make a definitive assessment of whether Züblinʼs portfolio will be affected, and if so how and on what scale. Thanks to our good tenant structure and quality (see portfolio section), Züblin believes that the impact and potential default risk arising from the lockdown on 19 March 2020 will be largely limited to the tenant segments of hospitality, retail and sport/leisure activities. These segments account for 8% of annual rental income.

Continued low debt and solid financial position

Züblinʼs investment portfolio is funded by a five-year revolving credit facility of CHF 118.0 million of which only CHF 72.8 million has been drawn. This results in a portfolio loan-to-value ratio (LTV) of 33%. As at 31 March 2020, the company held cash and cash equivalents of CHF 5.1 million.

Aiming for a sustainable dividend policy

Given the good operating results and a stable financial position, Züblin resumed paying a dividend to its shareholders in 2018. The Board of Directors strives for a sustainable and stable dividend policy. This includes allowing shareholders to participate in the operational success of Züblin, while at the same time ensuring that sufficient funds are available to facilitate the companyʼs growth. The Board of Directors will propose the distribution of CHF 1.00 per registered share from capital reserves to the 2020 Annual General Meeting.

Changes in management

On completion of the companyʼs restructuring and the stabilization of its operating business, Dr. Iosif Bakaleynik announced he would step down as CEO with effect from July 14, 2019. The Board of Directors was delighted to be able to appoint Roland Friederich, who has held various management positions for over twelve years and has been CFO of Züblin since 2016, as Züblinʼs new CEO/CFO.

Board of Directors

The Board of Directors currently consists of Dr. Wolfgang Zürcher, elected as new chairman by the 2019 Annual General Meeting, Mr. Vladislav Osipov and Dr. Markus Wesnitzer. All three members of the Board of Directors will stand for re-election at the 2020 AGM.


Züblinʼs 2020/21 financial year is likely to be adversely affected by COVID-19, as the economic downturn and its knock-on effects will impact on existing tenantsʼ businesses, as well as those of potential tenants.

The Board of Directors and Executive Management are committed to responding to the challenging economic conditions by actively seeking co-operative solutions to safeguard the companyʼs revenue base. Furthermore, Züblin management is reaffirming the measured investment strategy it has adopted in recent years, which is geared towards sustainable growth for the benefit of all shareholders.

Dr. Wolfgang Zürcher


Roland Friederich