Zurich, 26 August 2010 – Allreal continued to be extremely successful in the first half-year of 2010. Total sales grew by 13.2% to CHF 306.6 million. Net profit of CHF 62.3 million clearly exceeded the previous year’s value of CHF 39.4 million. The highest half-year result ever attained by Allreal underlines the company’s performance as well as its very good positioning in a demanding market environment.

In addition to the higher rental income, especially the cyclical profits from completed projects in the Projects & Development division contributed toward a clearly higher operating net profit (excluding revaluation gains) of CHF 57.4 million.

As the valuation of investment real estate in total resulted in a slightly positive change in value, net profit including revaluation gains of CHF 62.3 million was reported clearly above the previous year’s value. On the cut-off date, the Allreal share closed at CHF 118.50, corresponding to a marginal decline of 3.7% compared to year-end 2009. The overall performance for the first half of 2010 (based on price development plus dividend and revenue from subscription rights) amounts to 2.7%.

Allreal anticipates operating results for the entire 2010 financial year above previous year’s level.


Real Estate division

The acquisition of a fully let office building in Zurich-Oerlikon and the transfer of two investment buildings under construction resulted in an 8.3% growth in the portfolio of income-producing properties to a total of CHF 2.4 billion.

Effective 30 June 2010, Allreal’s portfolio comprised 71 yield-producing buildings at an average market value of CHF 33.7 million and three investment properties under construction at a market value of CHF 248.7 million and an investment volume of CHF 605 million.

The valuation of the investment properties (yield-producing properties and investment properties under construction) resulted in a slight appreciation by CHF 6.3 million, or 0.2% of the entire portfolio. Rental income grew by 6.3% to CHF 69.6 million.

Several large value maintaining refurbishments were initiated in the first half of 2010. As a result, real estate expenses grew to CHF 10.6 million, representing 15.2% of rental income. Thanks to the implementation of numerous optimization measures, the portfolio’s net yield remained at a high 5.1%.

At 4.0%, the vacancy rate was only insignificantly above the previous year’s level, which was very favourable also by industry comparison.


Projects & Development division

The Project & Development division’s result of CHF 63.0 million was decisively above that of the previous year. This outstanding result was achieved especially by the contribution of profits accrued from completed own projects.

A substantial contribution toward the very pleasing result of the Projects & Development division was made by calculation, budgeting and execution of the projects under construction as well as promotional gains made in the first half of 2010.

For the first half of 2010, and thanks to only marginally higher expenses, the Projects & Development division, which is active in project development, realisation and the acquisition and sale of property, reported a clearly higher operating result from business activity of CHF 38.2 million.

Allreal proceeded with probably the largest privately financed construction site currently operated in Switzerland by means of a ground-breaking ceremony held on 1 February 2010 for the Richti Areal, which is located between Wallisellen railway station and the Glatt shopping centre. The first section of the project to be completed is an office complex consisting of two buildings. Allreal signed a long-term lease with Allianz Suisse insurance company for a useful surface area of about 40,000 square metres. Allreal plans on completing the project by the summer of 2013.

Conversion and extension work on the Toni Areal site in Zurich-West will be continued as planned now that a legal dispute with a tenant has been settled. The consequent delay will not affect transfer of the completed building to its new tenants scheduled for the summer of 2013. The project volume handled by the Projects & Development division in the first half of 2010 amounted to a considerable CHF 260.3 million. Of this amount, 58.4% represent customer projects, 32.6% in-house development projects for sale to private or institutional investors, and 9.0% projects for Allreal’s own portfolio.

The order backlog of CHF 1.8 billion on the cut-off date guarantees utilisation of existing capacity for more than 24 months. A total of 72 apartments and single-family houses for private ownership was sold in the first half of 2010.


Well-hedged financing as a factor of success

The company refinanced itself advantageously over the long term with an average interest rate for financial liabilities of 2.60% hedged for a period of 47 months on the cut-off date.

The capital increase of CHF 225 million implemented in May 2010 provides Allreal with the necessary capital resources to finance especially the large own projects in Wallisellen and Zurich-West. Consequently, the equity share on the cut-off date was reported as 46.7% and net gearing as 90.4%.


Positive assessment of continued business activity

The Board of Directors and group management expect business activity in the second half of 2010 to remain stable. The company anticipates operating results for the entire financial year above the previous year’s level.

This news release and the Allreal Holding 2010 Half-year Report are also available electronically: www.allreal.ch