Allreal Holding AG: history, ownership, mission, how it works & makes money

A Brief History of Allreal Holding AG

Allreal Holding AG, founded in 2000, is a Swiss real estate company based in Zurich. The company operates in two primary segments: Real Estate and Construction. Allreal was created through the merger of the construction company Allreal and the real estate company, which enabled a diversified portfolio approach.

By the end of 2022, Allreal's real estate portfolio was comprised of 130 properties, with a total market value estimated at approximately CHF 3.1 billion. The properties are mainly located in major Swiss cities, highlighting Allreal's focus on urban development.

In 2021, Allreal expanded its construction segment by acquiring several new projects, leading to an increase in construction revenue. The construction business line generated approximately CHF 590 million in revenue in 2022, contributing significantly to the company’s overall financial health.

As of December 31, 2022, Allreal reported total assets amounting to CHF 3.4 billion, an increase from the previous year, attributed to strategic property acquisitions and development projects. The rental income for the same year reached about CHF 120 million, with an occupancy rate of approximately 94%.

Allreal's strategic initiatives have led to a consistent dividend payout ratio, with a proposed dividend of CHF 4.40 per share in 2022, reflecting a stable return to its shareholders. The company continues to focus on sustainable development practices within its projects, aligning its operations with the increasing demand for environmentally friendly buildings.

With a workforce of over 350 employees, Allreal emphasizes the importance of skilled professionals in both construction and property management, further enhancing its competitive edge within the Swiss real estate market.

The company has been recognized for its sound management and operational efficiency, which is reflected in its credit ratings. As of 2022, Allreal holds a Moody's rating of Baa2, indicating a stable credit outlook. This rating supports the company's ability to raise funds for further expansion and development projects.

A Who Owns Allreal Holding AG

Allreal Holding AG, a prominent Swiss real estate company, is publicly traded on the SIX Swiss Exchange under the ticker symbol ALRN. As of the end of 2022, Allreal's market capitalization was approximately CHF 1.6 billion.

The ownership structure of Allreal is defined by a mixture of institutional and private investors. As of 2023, approximately 63.5% of the company's shares are held by institutional investors, while private individuals hold around 36.5%.

Major institutional shareholders include:

• CSAM - Credit Suisse Asset Management
• UBS Asset Management
• Swiss Life Asset Managers
• Zürich Versicherung

In addition, Allreal's own executive board members and senior management hold a collective stake of about 2.5% of the total shares.

The following table provides a detailed overview of the largest shareholders of Allreal Holding AG as of mid-2023:

In terms of geographic distribution, the majority of institutional investments come from Switzerland, reflecting a strong domestic investor base while also attracting interest from international funds. This aligns with Allreal's operations, primarily focused on the Swiss real estate market where they have a portfolio valued at over CHF 3 billion.

The share performance of Allreal Holding AG has seen fluctuations reflective of broader market trends. In 2022, the share price closed at approximately CHF 125.00, experiencing a price appreciation of about 5.4% year-to-date by mid-2023, largely influenced by robust property demand in urban areas, including Zurich and Geneva.

Ultimately, Allreal Holding AG's ownership is characterized by a strong institutional backing alongside a considerable public shareholding, positioning the company effectively for sustained growth within the real estate sector in Switzerland.

Allreal Holding AG Mission Statement

Allreal Holding AG, a Swiss company based in Zurich, focuses on real estate development and property management. The company's mission statement emphasizes sustainable development, innovation, and long-term value creation for its shareholders, tenants, and the broader community.

In line with its mission, Allreal endeavors to manage its real estate portfolio responsibly and sustainably, aiming to enhance the quality of life for its tenants while maximizing shareholder value. The company adopts a holistic approach to development, prioritizing environmental standards and social responsibility.

As of the latest financial statement in 2023, Allreal's equity stands at CHF 1,489 million, reflecting a steady increase from CHF 1,445 million in 2021. This growth in equity highlights the company's commitment to financial health as part of its mission to provide long-term value to its stakeholders.

Allreal also focuses on innovative real estate solutions, dedicating resources to R&D in sustainable construction. This commitment is evidenced by their investment in renewable energy projects, which aim to reduce the carbon footprint of their properties significantly.

In terms of tenant satisfaction, Allreal has consistently reported high levels of occupancy rates, averaging above 95% across its portfolio in recent years, aligning with its mission to provide quality living and working spaces. The company also conducts regular tenant surveys to ensure that it meets their needs and enhances their living experience.

As part of its strategic objectives, Allreal has set ambitious goals for reducing energy consumption by 20% by 2025, demonstrating its commitment to environmental stewardship as an integral part of its mission.

Through these efforts, Allreal strives to achieve a balance between economic performance and social responsibility, leading to sustainable growth that benefits all stakeholders involved.

How Allreal Holding AG Works

Allreal Holding AG operates primarily in two segments: Real Estate and Construction. The company is a leading player in the Swiss real estate market, leveraging its integrated business model to manage both property development and project management.

Real Estate Segment

Allreal's real estate portfolio is diverse, focusing on residential, commercial, and mixed-use properties. As of mid-2023, the company reported a portfolio valuation of approximately CHF 3.47 billion. The occupancy rate stands at around 96.2%, indicating strong demand for its properties.

Construction Segment

In the construction segment, Allreal engages in general contracting and project development. In 2022, the construction segment generated revenues of approximately CHF 860 million, with an order backlog of around CHF 1.1 billion, which provides visibility over the next few years.

Financial Performance

For the fiscal year ending December 2022, Allreal reported a net profit of CHF 165 million, up from CHF 148 million in 2021. This indicates a growth rate of approximately 11.5%.

The company’s earnings before interest and taxes (EBIT) were reported at CHF 210 million, reflecting a solid EBIT margin of approximately 24.4%.

Market Performance

As of October 2023, Allreal Holding AG’s shares are listed on the Swiss stock exchange with a current market capitalization of approximately CHF 2.7 billion. The stock price has experienced a year-to-date increase of around 20%.

Dividend Policy

Allreal follows a sustainable dividend policy, paying out approximately CHF 3.00 per share in 2023. The dividend yield stands at approximately 3.5%, providing consistent returns to shareholders.

The company emphasizes a long-term capital growth strategy while ensuring a steady cash flow from its operational activities, reinforcing its market position and shareholder value. Allreal’s pragmatic approach, combined with its substantial real estate assets and ongoing construction projects, positions it favorably for future growth in the Swiss market.

How Allreal Holding AG Makes Money

Allreal Holding AG operates primarily in the real estate and construction sectors in Switzerland. The company generates income through two main divisions: Real Estate and General Contracting. These divisions contribute to its overall financial performance and revenue generation strategy.

Real Estate Division

The Real Estate segment is the backbone of Allreal's revenue. As of the end of 2022, this division reported a real estate portfolio worth approximately CHF 3.0 billion. The portfolio consists of both commercial and residential properties, which are strategically located across major Swiss urban areas.

In 2022, the Real Estate division achieved rental income of CHF 147.8 million, representing a solid year-on-year increase of 3.6%. The occupancy rate for the portfolio was maintained at a high level of 93.5%, indicating strong demand for its properties.

General Contracting Division

The General Contracting division generates revenue through the construction of residential and commercial buildings. In 2022, this division reported a turnover of CHF 456 million. This represents a modest increase compared to the previous year’s turnover of CHF 430 million, supported by a robust order book.

As of the first quarter of 2023, Allreal had a backlog of projects valued at approximately CHF 2.1 billion, demonstrating a healthy pipeline for future revenue generation in the General Contracting segment.

Financial Performance Metrics

For the full year 2022, Allreal reported a net profit of CHF 121 million, representing a 8.1% increase from the previous year. The earnings before interest and taxes (EBIT) amounted to CHF 164 million, showcasing the profitability of its operations across both divisions.

The company’s return on equity (ROE) was recorded at 7.5% for the year, which is competitive within the Swiss real estate market. The total assets of Allreal stood at approximately CHF 3.9 billion as of December 31, 2022.

Investment Strategy

Allreal focuses on selective acquisitions and developments to enhance its portfolio. In 2022, the company invested around CHF 220 million in new developments and renovations. This proactive approach has helped in maintaining and increasing rental income while also positioning the company to benefit from rising property values in prime locations.

With a strong balance sheet and prudent financial management, Allreal’s strategy positions it well to capitalize on growth opportunities within the Swiss real estate market, enhancing its revenue generation capabilities for future years.

The company also offers a dividend yield of approximately 3.4%, appealing to income-focused investors and further supporting its profitability profile.