Quarterly report Q1 Q3. Short report

2017 Quarterly report Q1 Q3 Short report

2 PSP Swiss Property Short report Q1 Q3 2017 Key figures Key financial figures Unit 2016 Q3 2016 Q3 2017 Q1 Q3 2016 Q1 Q3 2017 +/ 1 Rental income CHF 1 000 276 316 69 358 67 908 207 711 204 272 1.7 % EPRA like-for-like change % 1.6 3.3 0.4 1.4 1.3 2 Net changes in fair value of real estate investments CHF 1 000 50 208 6 653 0 38 407 17 739 Income from property sales (freehold apartments) CHF 1 000 14 224 2 588 18 038 13 108 19 896 Income from property sales (investment properties) CHF 1 000 1 354 0 0 1 075 308 Total other income CHF 1 000 6 291 2 422 1 082 5 374 4 341 Net income CHF 1 000 134 867 37 819 70 630 102 772 165 138 60.7 % Net income excluding gains/losses on real estate investments 3 CHF 1 000 172 548 43 065 57 726 132 032 138 152 4.6 % Ebitda excluding gains/losses on real estate investments CHF 1 000 241 572 60 220 72 544 184 618 187 405 1.5 % Ebitda margin % 81.3 81.0 83.4 81.5 82.0 Total assets CHF 1 000 7 041 368 6 943 844 7 285 981 3.5 % Shareholdersʼ equity CHF 1 000 3 866 754 3 825 298 3 892 691 0.7 % Equity ratio % 54.9 55.1 53.4 Return on equity % 3.5 4.0 7.3 3.6 5.7 Interest-bearing debt CHF 1 000 2 248 436 2 178 438 2 510 896 11.7 % Interest-bearing debt in % of total assets % 31.9 31.4 34.5 4 Portfolio key figures Number of properties Number 161 161 158 Carrying value properties CHF 1 000 6 297 968 6 249 941 6 315 126 0.3 % Implied yield, gross 5 % 4.3 4.2 4.1 4.3 4.2 Implied yield, net 5 % 3.6 3.6 3.5 3.7 3.6 Vacancy rate (CHF) 5, 6 % 9.3 9.4 8.3 Number of sites and development properties Number 10 10 12 Carrying value sites and development properties CHF 1 000 595 885 633 704 639 088 7.3 % Employees End of period People 90 90 86 Full-time equivalents FTE 84 82 81 Per share figures Earnings per share (EPS) 7 CHF 2.94 0.82 1.54 2.24 3.60 60.7 % EPS excluding gains/losses on real estate investments 7 CHF 3.76 0.94 1.26 2.88 3.01 4.6 % Distribution per share CHF 3.35 8 n.a. n.a. n.a. n.a. Net asset value per share (NAV) 9 CHF 84.30 83.40 84.87 0.7 % NAV per share before deduction of deferred taxes 9 CHF 100.95 99.97 101.59 0.6 % Share price end of period CHF 88.00 92.50 89.20 1.4 % 1 Change to previous year s period 1 January to 30 September 2016 or carrying value as of 31 December 2016 as applicable. 2 Excl. property at Av. des Morgines 8/10 in Petit-Lancy: + 0.6 %. 3 See definition Net income excluding gains/losses on real estate investments on page 6, footnote 1. 4 LTV, excluding CHF 275 million of fixed-term deposits (made in relation to private placement and bond issue) would amount to 31.9 %. 5 For investment properties. 6 Equals the lost rental income in % of the potential rent, as per reporting date. 7 Based on average number of outstanding shares. 8 For the 2016 business year. Cash payment was made on 11 April 2017. 9 Based on number of outstanding shares.

PSP Swiss Property Short report Q1 Q3 2017 2014 2015 2013 2014 2015 3.9 2016 Portfolio value in CHF billion Shareholders equity in CHF billion Vacancy rate end of period in % Return on equity in % Ebitda 81.3 % 184.6 187.4 82.0% 241.6 81.5% 232.7 6.0 169.3 2014 Q3 2017 Net income components 82.0 % 81.8 % 238.2 3.9 5.7% Q3 2017 3.9 3.5 % 2016 7.2 % 2013 3.8 4.9 % 8.3% 3.8 4.6 % 7.0 8.5 % 10.0 % 8.0 % 6.9 6.7 6.6 6.5 Shareholders equity 9.3 % Real estate portfolio 2015 26.4 161.3 Ebitda margin in % 132.0 37.7 2016 Q1 3 2016 Q1 3 2017 Ebitda excl. gains/losses on real estate investments in CHF million 172.5 2014 2015 27.0 138.2 29.3 2016 Q1 3 2016 Q1 3 2017 Net income excl. gains/losses on real estate investments in CHF million Contribution gains/losses on real estate investments in CHF million 3

4 PSP Swiss Property Short report Q1 Q3 2017 Q1 Q3 2017 report In good locations, the office market seems to be stabilising. In the wake of an economic upswing, demand might pick up. Market environment Competition on the letting market for commercial space remains strong; thereby, location and quality of the properties are crucial for success. One positive aspect is the fact that the office market seems to be stabilising, at least in good locations, especially in Zurich s city centre. In Zurich West, we observe lively interest in modern office space. If the promising economic outlook for 2018 is correct, the demand for office space might accelerate even more. Interest rates still hardly moved from their historically low levels in Q3 2017 and fixed income investments remain unattractive. Consequently, institutional investors continue to look for qualitative real estate investments providing a positive, stable yield. Demand for the purchase of prime commercial properties is unlikely to decline in the foreseeable future. Letting market Office In Switzerland as a whole, there is still a lot of vacant office space. However, at least in our main market, Zurich, the pace of new constructions is decreasing slightly, except in Zurich North. Here, building activity continues and vacancies keep growing, while rents are declining moderately. Especially in peripheral regions, the reduction of vacancies is likely to take years. The situation is markedly better in economic centres. Central office locations in Zurich have been doing particularly well recently. The situation is stable in Basel. However, supply of office space will expand in the coming years due to a number of new construction projects. The demand for office space is relatively brisk, especially from the life-sciences, insurance and IT sectors. The most difficult market is Geneva. Here, demand remains stagnant. In addition, supply will expand due to new construction projects, especially in outlying districts. Furthermore, Geneva is still behind Zurich with regard to the consolidation of the financial sector. Consequently, the trend for rents in Geneva remains negative. Overall, we do not expect office rents to rise quickly. On the other hand, the signs of a pickup in demand in central locations are encouraging. It remains to be seen, however, whether this will lead to a sustainable market recovery. Retail The situation on the market for retail space remains tense and demand is subdued. Shopping tourism and online shopping keep pressure on rents. Central locations ( high street retail ) are more resilient. Most of our retail properties are located in this more stable market segment. Portfolio At the end of September 2017, our real estate portfolio included 158 office and commercial properties. In addition, we had twelve sites respectively projects. The carrying value of the total portfolio was CHF 7.0 billion.

PSP Swiss Property Short report Q1 Q3 2017 5 Investment properties On 3 April 2017, we sold the property located at Eisenbahnstrasse 95 in Gwatt (Thun) for CHF 7.0 million. We did not purchase any investment properties in the reporting period. Along with regular smaller renovations we do in our investment portfolio, several of our buildings are going through an extensive modernisation process. We are currently focusing on Zurich s city centre, several properties in Zurich West as well as one property each in Geneva and Lausanne. In 2017 and 2018, we invest around CHF 100 million for renovations and conversions in our investment properties. Vacancy At the end of September 2017, the vacancy rate stood at 8.3 % (end of 2016: 9.3 %). 0.6 percentage points of these 8.3 % were due to ongoing renovations. Of the lease contracts maturing in 2017 (CHF 31.4 million), 90 % were renewed respectively extended at the end of September 2017. As at year-end 2017, we expect a vacancy rate of below 8.5 %. Sites and development properties The ongoing work at several projects proceeded as planned during the reporting period. The most important developments in short: The new construction Grosspeter Tower in Basel will be completed by the end of 2017. The current letting rate of 70 % is encouraging. The Ibis Style Business Hotel on the lower floors has been in operation since spring 2017. Furthermore, 10 of the 22 floors (all office space) have already been let. The Grosspeter Tower has an imposing exterior and meets the most stringent criteria with regard to sustainability and technology. A fully integrated photovoltaic installation will generate enough power to cover the basic electricity needs of the building. For that reason, the Grosspeter Tower recently received the Swiss Solar Award 2017. At the Rue du Marché project in Geneva, the comprehensive renovation will cost around CHF 30 million and last until 2020. With the international hotel group citizenm, we have a prominent anchor tenant. citizenm will open a 144-room boutique hotel following the renovation. The remaining space, which is partly let, will be dedicated to retail. Construction of the Residenza Parco Lago in Paradiso (Lugano) with 13 000 m 2 floor space (predominantly condominiums) started in March 2017. The investment total will amount to approximately CHF 80 million. Once completed, we will sell all units towards the end of 2019. The project Bahnhofquai/Bahnhofplatz in Zurich (total renovation, particularly infrastructure and technical installations) consists of several properties and will be carried out in three stages: Renovation work for stage 1 (Bahnhofplatz 1, Bahnhofquai 9/11/15) will cost approximately CHF 51 million. Work began in June 2017 and is likely to take around two years. Most of the space will be dedicated to offices and retail use. CBRE has been appointed as letting agent. For stage 2 (Waisenhausstrasse 2/4, Bahnhofquai 7) our chosen project was approved by the City Historical Building Committee in May 2017. The project includes a restaurant, like before the renovation. For the remaining space, both office and hotel options are being assessed. From todayʼs perspective, capital expenditure will amount to approximately CHF 33 million. We plan to submit the building permission request in spring 2018.

6 PSP Swiss Property Short report Q1 Q3 2017 Stage 3 (Bahnhofplatz 2) is under review. Our cost estimate for this renovation is approximately CHF 12 million. There are still ongoing lease agreements. The Hardturmstrasse / Förrlibuckstrasse project (investment total approximately CHF 60 million) in Zurich West is also on track. This property will undergo a comprehensive renovation and will be upgraded to modern standards in terms of technical installations by the end of 2018. The building will allow flexible and individual office layouts. 60 % of the space is already let. Space demand is originated among others from telecommunications, medtech, IT and energy firms. In 2018, we will start the Orion project in Zurich West (a replacement building for two properties). High-quality, flexibly partitionable office areas are planned. The investment total will be approximately CHF 130 million. The Salmenpark II residential project in Rheinfelden was sold for CHF 27.6 million on 18 August 2017. For further information on the current projects see pages 50 to 51. Consolidated quarterly results (January to September 2017) During the reporting period, we achieved a net income (excluding gains/losses on real estate investments) 1 of CHF 138.2 million (Q1 Q3 2016: CHF 132.0 million). The increase resulted mainly from the higher income from condominium sales compared to the previous year s period; this income increased by CHF 6.8 million to CHF 19.9 million (Q1 Q3 2016: CHF 13.1 million). Thereof, the sale of the residential project Salmenpark II in Rheinfelden during Q3 2017 accounted for CHF 17.8 million. Rental income decreased by CHF 3.4 million, in particular because of the lease termination by the single tenant at the property located at Av. des Morgines 8/10 in Petit-Lancy. Earnings per share (excluding gains/losses on real estate investments) amounted to CHF 3.01 (Q1 Q3 2016: CHF 2.88); this EPS forms the basis for the distribution to shareholders. Operating expenses decreased by CHF 1.3 million to CHF 41.8 million (Q1 Q3 2016: CHF 43.1 million). Financial expenses decreased by CHF 1.3 million to CHF 19.0 million (Q1 Q3 2016: CHF 20.3 million). Net income (including gains/losses on real estate investments) was CHF 165.1 million (Q1 Q3 2016: CHF 102.8 million). The increase compared to the previous year s period was mainly caused by the semi-annual revaluation of the properties, which resulted in an overall appreciation of CHF 17.7 million (Q1 Q3 2016: depreciation of CHF 38.4 million), as well as by higher income from condominium/project sales. Furthermore, tax expenses decreased by CHF 2.1 million to CHF 20.6 million (Q1 Q3 2016: CHF 22.7 million). In this regard, it should be considered that the new lower corporate tax rate in the Canton of Vaud was applied in Q3 2017. This resulted in a positive effect (release of deferred taxes) in the amount of CHF 17.0 million. Thereof, CHF 12.9 million are related to revaluations of the property portfolio and do not impact the net result excluding gains/losses on real estate investments. Earnings per share (including gains/losses on real estate investments) amounted to CHF 3.60 (Q1 Q3 2016: CHF 2.24). At the end of September 2017, net asset value (NAV) per share was CHF 84.87 (end of 2016: CHF 84.30); in this regard, the dividend payment made on 11 April 2017 of CHF 3.35 per share must be taken into account. NAV before deducting deferred taxes amounted to CHF 101.59 (end of 2016: CHF 100.95). 1 Net income excluding gains/losses on real estate investments corresponds to the consolidated annual net income excluding net changes in fair value of the real estate investments, realised income on sales of investment properties 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.

PSP Swiss Property Short report Q1 Q3 2017 7 Capital management With total equity of CHF 3.893 billion (end of 2016: CHF 3.867 billion) corresponding to an equity ratio of 53.4 % (end of 2016: 54.9 %) the capital base remained strong at the end of September 2017. Interest-bearing debt amounted to CHF 2.511 billion, corresponding to 34.5 % of total assets (end of 2016: CHF 2.248 billion respectively 31.9 %). In order to lengthen the interest fixing period, a bond and the private placement were increased by overall CHF 225 million during the reporting period. In this context, fixed-term deposits were increased by CHF 175 million to CHF 275 million. Excluding these CHF 275 million, interest-bearing debt amounts to CHF 2.236 billion, corresponding to 31.9 % of total assets. At the end of September 2017, the passing average interest rate was 0.99 % (end of 2016: 1.28 %). The average fixed-interest period was 3.8 years (end of 2016: 4.3 years). No major committed bank loans will be due until 2019. At the end of September 2017, we had unused committed credit lines of CHF 730 million. PSP Swiss Property has ratings from two international rating agencies: a Senior Unsecured Rating A- (outlook stable) from Fitch and an A3 Issuer Rating (outlook stable) from Moody s. Subsequent events Outlook The outlook for Switzerland s economy as a whole is positive. Nevertheless, the property market will remain a challenge, especially in peripheral regions. In this competitive market, location and quality of the properties are key factors for rental success. Landlords that offer state-ofthe-art new buildings or comprehensively renovated and upgraded properties in good locations have a competitive advantage. This holds true for both office buildings and the retail sector. Our focus remains on the renovation and modernisation of selected properties, the further development of our sites and projects as well as the letting activities. Due to the continuing low interest rates and the resulting investment plight of institutional investors, competition on the acquisition market for top properties will remain fierce. For the 2017 business year, we expect an ebitda (excluding gains/losses on real estate investments) of more than CHF 240 million (2016: CHF 241.6 million). With regard to the vacancies at year-end 2017, we now expect a lower rate of below 8.5 % (previous forecast: 8.5 %; end of September 2017: 8.3 %). The Executive Board, November 2017 There were no material subsequent events.

8 PSP Swiss Property Short Short report report Q1 Q3 Q1 Q3 2017 2017 Portfolio summary Q3 2017 C 1 3 7 4 A D E 2 B 6 5 Areas 4 Sites 8 Projects Project pipeline 1 Basel, project Grosspeter Tower CHF 120 million 2 Lausanne, project Rue Saint-Martin CHF 13 million 3 Zurich, project Hardturmstrasse / Förrlibuckstrasse 4 Zurich, project Bahnhofquai/-platz CHF 60 million CHF 51 million (stage 1) CHF 45 million (stages 2 & 3) 5 Paradiso, Residenza Parco Lago CHF 80 million 6 Geneva, project Rue du Marché CHF 30 million 7 Zurich, project Orion CHF 130 million 2014 2015 2016 2017 2018 2019 2020 2021

PSP Swiss PSP Swiss Property Property Short Short report Q1 Q3 2017 9 Portfolio value by area 9% Sites and development properties 6% Other locations 5% Lausanne 4% Bern 8% Basel 58% Zurich 11% Geneva Portfolio key figures A Zurich area B Geneva area Portfolio value CHF 4.0 billion Portfolio value CHF 0.7 billion Rental income CHF 122.1 million Rental income CHF 19.6 million Implied yield, net 3.5 % Vacancy rate 6.3 % Rentable area 501 816 m² Implied yield, net 2.7 % Vacancy rate 17.4 % Rentable area 84 401 m² C Basel area D Bern area Portfolio value CHF 0.5 billion Portfolio value CHF 0.3 billion Rental income CHF 18.6 million Rental income CHF 9.6 million Implied yield, net 3.9 % Vacancy rate 2.2 % Rentable area 92 298 m² Implied yield, net 3.8 % Vacancy rate 10.4 % Rentable area 57 821 m² E Lausanne area Other locations Portfolio value CHF 0.3 billion Portfolio value CHF 0.4 billion Rental income CHF 12.9 million Rental income CHF 14.6 million Implied yield, net 4.3 % Vacancy rate 6.7 % Rentable area 76 813 m² Implied yield, net 4.1 % Vacancy rate 15.8 % Rentable area 94 643 m²

10 PSP Swiss Property Short report Q1 Q3 2017 Rent by use 5% Parking 4% Gastronomy 11% Other 17% Retail 62% Office Rent by type of tenant 17% Other 20% Retail 6% Government 8% Gastronomy 19% Services 9% Financial services 9% Technology 12% Telecommunication Rent by largest tenants 11% Swisscom 69% Other 4% Google 2% Roche 2% Schweizer Post 2% Bär & Karrer 9% Next five largest tenants

PSP Swiss Property Short report Q1 Q3 2017 11 Dornacherstrasse 210, Basel

12 PSP Swiss Property Short report Q1 Q3 2017

PSP Swiss Property Short report Q1 Q3 2017 13 Laupenstrasse 18 / 18a, Bern

14 PSP Swiss Property Short report Q1 Q3 2017 Consolidated statement of profit or loss (January to September) (in CHF 1 000) Q1 Q3 2016 Q1 Q3 2017 Rental income 207 711 204 272 Net changes in fair value of real estate investments 38 407 17 739 Income from property sales (inventories) 72 383 43 250 Expenses from sold properties (inventories) 59 275 23 354 Income from other property sales 1 075 308 Income from investments in associated companies 10 7 Capitalised own services 3 056 1 941 Other income 2 308 2 393 Total operating income 188 861 246 556 Real estate operating expenses 9 089 8 828 Real estate maintenance and renovation expenses 11 341 12 553 Personnel expenses 15 402 14 575 Fees to subcontractors 37 36 General and administrative expenses 5 772 5 252 Impairment charge properties 913 0 Depreciation 544 600 Total operating expenses 43 098 41 844 Operating profit (ebit) 145 763 204 713 Financial income 104 234 Financial expenses 20 390 19 202 Profit before income taxes 125 477 185 744 Income taxes 22 706 20 606 Net income attributable to shareholders of PSP Swiss Property Ltd 102 772 165 138 Earnings per share in CHF (basic and diluted) 2.24 3.60 Consolidated statement of comprehensive income (January to September) (in CHF 1 000) Q1 Q3 2016 Q1 Q3 2017 Net income attributable to shareholders of PSP Swiss Property Ltd 102 772 165 138 Items that may be reclassified subsequently to profit or loss: Changes in interest rate hedging 7149 14671 Attributable taxes 553 1142 Items that will not be reclassified subsequently to profit or loss: Changes in pension schemes 4070 1202 Attributable taxes 895 264 Other comprehensive income 3 422 14 467 Comprehensive income attributable to shareholders of PSP Swiss Property Ltd 106 193 179 605

PSP Swiss Property Short report Q1 Q3 2017 15 Consolidated statement of financial position (in CHF 1 000) 1 January 2016 31 December 2016 30 September 2017 Cash and cash equivalents 29 353 21 123 33 402 Accounts receivable 20 995 10 122 156 114 Deferrals 2 531 1 874 1 723 Derivative financial instruments 0 0 13 Sites and development properties for sale 73 669 51 525 49 080 Investment properties for sale 0 6 685 0 Total current assets 126 548 91 329 240 332 Tangible assets 356 334 303 Intangible assets 0 0 696 Derivative financial instruments 2 052 2 664 1 683 Accounts receivable 3 208 102 998 130 766 Financial investments 9 9 9 Investments in associated companies 45 54 62 Sites and development properties 427 701 544 360 590 008 Own-used properties 36 159 35 555 35 087 Investment properties 6 186 848 6 255 728 6 280 039 Deferred tax assets 8 997 8 335 6 997 Total non-current assets 6 665 374 6 950 038 7 045 650 Total assets 6 791 923 7 041 368 7 285 981 Accounts payable 36 263 23 806 19 110 Deferrals 55 649 52 678 33 811 Current tax liabilities 14 198 7 212 1 236 Bonds 249 951 0 0 Derivative financial instruments 1 010 2 811 1 564 Total current liabilities 357 070 86 508 55 720 Debt 1 300 000 1 280 000 1 320 000 Bonds 419 084 968 436 1 190 896 Derivative financial instruments 64 107 47 653 33 261 Pension liabilities 17 707 19 947 19 403 Deferred tax liabilities 763 482 772 070 774 011 Total non-current liabilities 2 564 380 3 088 106 3 337 571 Share capital 4 587 4 587 4 587 Capital reserves 586 079 503 490 503 479 Retained earnings 3 338 889 3 404 956 3 416 437 Revaluation reserves 59 082 46 279 31 812 Total shareholders equity 3 870 473 3 866 754 3 892 691 Total liabilities and shareholders equity 6 791 923 7 041 368 7 285 981

PSP Swiss Property Ltd Kolinplatz 2 CH-6300 Zug www.psp.info info@psp.info Agenda Publication FY 2017 27 February 2018 Annual General Meeting 2018 5 April 2018, Lake Side, Zurich Publication H1 2018 17 August 2018 Publication Q1 Q3 2018 13 November 2018 Stock exchange, trading symbol SIX Swiss Exchange: Symbol PSPN, Security number 1829415, ISIN CH0018294154 Reuters: PSPZn.S Bloomberg: PSPN SW www.psp.info Further publications and information are available on www.psp.info. This Short report is an extract from the Quarterly report Q1 Q3 2017. The Quarterly report Q1 Q3 2017 is available under www.psp.info/reports. PSP Swiss Property, 13 November 2017 Publication Q1 2018 8 May 2018