Projects & Development division

Two own projects were transferred to Realisation in the year under review. Consequently, the Development department again made a substantial contribution to both capacity utilisation and the success of the company as a whole.

In Winterthur Seen ZH, Allreal is realising a third-party and own project on Florenstrasse. The residential complex includes a total of ten apartment buildings comprising eleven rental apartments and 51 condominiums. Allreal realises the rental apartments for a private owner. Construction of the six buildings comprising 41 condominiums began in November 2019. Construction of the remaining four apartment buildings is expected to start in spring 2020. Completion of the entire project is scheduled for 2022. Construction started on an apartment building in Zufikon AG near Bremgarten for Allreal’s own portfolio. On Alter Züriweg, Allreal is implementing two connected stepped apartment buildings comprising 20 condominiums, of which 16 have been sold. Construction began mid-April the previous year, and completion is scheduled for the first half of 2021.

Allreal reached additional important milestones concerning other development projects. In the city of Lucerne, Allreal is planning the realisation of an apartment building comprising 77 residential units on the Eggen lot. In the second half of 2018, Allreal conducted a study contract involving six architectural practices for land measuring approximately 8,400 square metres. In May 2019, the jury unanimously recommended implementation of the project submitted by Caruso St John Architects. Construction start of the project at an investment volume of some CHF 73 million is schedule for spring 2021, at the earliest.

Allreal is planning the comprehensive refurbishment of its six-storey commercial building located on Bellerivestrasse 36 in Zurich Riesbach. The company conducted a study contract in spring 2019. In September 2019, the jury recommended the project submitted by C.F. Møller Architects for further processing. Start of the two-year refurbishment project is scheduled for spring 2021.

Allreal is currently planning a study contract to start at the beginning of 2020 and selected in the summer concerning a parcel of land located on Spiserstrasse in Zurich Albisrieden acquired in 2018 and extended in the period under review. Allreal will realise about 100 apartments in cooperation with a private owner on the land measuring some 5,500 square metres. Investment volume abouts to about CHF 75 million. Construction start is scheduled for the first half-year 2022.

The Development department continued to intensify its marketing activities resulting in the acquisition of new properties. Besides extending the land on Spiserstrasse, Allreal acquired a parcel of land each on Hauserstrasse in Zurich Hottingen, on Inzlingerstrasse in Riehen BS and in Zumikon ZH, thereby enlarging its inventory of attractive and promising development reserves.

In its Realisation department, Allreal processed a project volume of CHF 340.7 million in the 2019 financial year by means of work on third-party projects and own projects. This is reported at 3.2 percent below the value for the previous year, owing to Allreal’s deliberate limitation to only implement third-party projects representing calculable risk, realistic contractual terms and intact profit expectations. Thanks to the company’s focus on a high level of quality, Allreal reported a gross margin of 13.3 percent from the planning and realisation of projects for third parties.

Of the project volume completed in the year under review, CHF 270.0 million or 79.2 percent applied to third-party projects (2018: CHF 290.3 million/82.5%). In contrast, the share of own projects is reported at CHF 50.4 million or 14.8 percent (2018: CHF 36.6 million/10.4%) and that of development projects for sale to third parties at CHF 20.3 million or 6.0 percent (2018: CHF 25.0 million/7.1%)

In the medium term, Allreal aims to achieve a balanced relationship between own and third-party projects at an annual project volume of up to CHF 500 million.

In the 2019 financial year, the share of new construction projects in the completed project volume amounted to CHF 224.4 million or 65.9 percent of completed project volume (2018: CHF 267.4 million/76.0%) and the share of renovation and conversion projects to CHF 116.3 million in total or 34.1 percent (2018: CHF 84.5 million/24.0%).

The order backlog secured on the cut-off date of about CHF 820 million corresponds to a capacity utilisation of more than 24 months.

Projects completed in 2019

Allreal completed a mixed-usage complex implemented on the former Bülachguss industrial site in Bülach-Nord for two Credit Suisse real-estate funds and its own portfolio. The mixed-use project comprises 416 residential units, office and trade space and a public park. The construction sum for the rental complex and the commercial building amounted to some CHF 175 million. The investment volume for the own project with 73 condominiums amounted to CHF 55 million. Construction work on the project with Minergie-Eco certification started in September 2017 and was completed on schedule in autumn 2019.

In Gerlafingen SO, Allreal developed four apartment buildings for an institutional investor comprising a total of 77 rental units plus services and trade spaces. The construction sum amounted to about CHF 28 million. In the period under review, the company completed another new construction on Ankerstrasse in Zurich Aussersihl. The six-storey residential building with 36 rooms, two apartments plus seminar space and offices was implemented on behalf of a non-profit organisation.

On Engimattstrasse in Zurich Enge, Allreal implemented the replacement of a four-storey apartment building comprising 34 rental units for an institutional investor. The construction sum amounted to about CHF 14 million. Refurbishment and renovation work on a listed commercial building on Bubenbergplatz/Christoffelgasse in Bern was completed successfully. The construction sum amounted to about CHF 19 million.

Some of the projects completed in the period under review included:

Current projects

On behalf of Helvetia Insurance, Allreal is realising a five-storey apartment complex on Bellariarain in Zurich Wollishofen comprising a total of 172 rental apartments at a construction sum of about CHF 60 million. Construction work on the project in a very attractive location commenced in June 2018, and completion is scheduled for 2020.

Allreal is realising a three-storey data centre for an IT infrastructure provider in the Bäuler industrial area in Glattbrugg ZH comprising 7,132 square metres of useful floor space. The construction sum amounts to about CHF 30 million. Construction work will be completed in 2020 and the building transferred to the client for further development.

On behalf of an institutional client, Allreal is currently realising the total refurbishment and extension of an office complex with over 45,000 square metres of useful floor space located on Badenerstrasse in Zurich Wiedikon. The construction sum amounts to over CHF 90 million. The project is scheduled for completion in 2021.

The comprehensive refurbishment and conversion of a commercial building on the post office site in close proximity to Baden AG railway station will be completed in 2021.The construction sum amounts to about CHF 30 million.

On behalf of SBB, Allreal is realising the Letzi Turm project on Hohlstrasse in Zurich Altstetten as its total contractor. The project volume is valued at about CHF 70 million. The new construction comprises two high-rise residential buildings, both measuring 70 metres in height, with a total of 178 rental apartments. Together, the towers represent more than 27,000 square metres floor space and a volume of 84,000 cubic metres. Following a construction period of about two years, the project will be transferred to the client in 2022.

In Adliswil ZH, Allreal is developing and realising a residential and commercial complex in the Dietlimoos-Moos development site for a private investor. A residential and commercial complex will be realised on six construction lots. They will comprise a total of 325 apartments and about 9,000 square metres space reserved for trade and services. Construction volume amounts to over CHF 170 million. Preparatory work on the first lot commenced in November 2019. Three additional lots will be brought on stream, gradually starting in spring 2020. The first four lots are scheduled for completion in summer 2022 and summer 2023. Construction on the remaining lots will commence at a later point in time.

Other projects started on in the year under review:

In 2019, Allreal generated income of CHF 57.8 million resulting from the Bülachguss project and the divestment of a section of the Bäuler development reserve in Rümlang ZH, resulting in a gain of CHF 22.9 million.

As at year-end, the inventory of unsold units dropped to five condominiums thanks to strong sales of the units on offer in the project on Alter Züriweg in Zufikon AG. Inventory will increase based on the additional units becoming available in 2020 in the project on Florenstrasse in Winterthur Seen ZH and, in 2021, in the Eggen project in Lucerne.

Earnings reported by the Projects & Development division for the period under review of CHF 18.9 million corresponds to a 13.7 percent share in the Group’s ­earnings excluding revaluation gains.