HIAG uses acquisitions as an additional driving force along with organic growth based on its strong development pipeline, which includes a large number of attractive sites throughout Switzerland. It focuses on industrial sites at the end of their life cycle and former industrial locations that have already been converted to a new use, as well as development land, investment properties and land parcels that round out existing sites.
Good market position
With its solid track record of previous acquisition activity, HIAG is well positioned in the market. Flexibility in structuring transactions is also one of HIAG’s strengths. In addition to direct acquisitions, such as the purchase of the FCA Switzerland SA site in Zurich Altstetten at the end of September 2019, HIAG has completed customised sale and lease-back property transactions with selling companies on multiple occasions. The most recent example is the purchase of the Amcor Flexibles Rorschach AG site in Goldach (SG) in December 2018. Furthermore, as a company listed on the Swiss stock exchange (SIX Swiss Exchange), HIAG is well positioned, if it so chooses, to partially compensate for a purchase price in treasury shares and to let the seller participate in the company’s future development. Another option is to buy the shares of independent companies in which real estate properties are incorporated.
The real estate market is as liquid as ever and offers a variety of attractive opportunities. HIAG regularly evaluates both public offers, which are structured by specialised service providers, and “off-market” properties, which are not advertised and are concluded through direct discussions between the seller and buyer. When it comes to structured projects, HIAG benefits from its financial power as a stock market-listed company and its reputation as a successful site developer that stays involved in the long term with a broad-based land bank in Switzerland. HIAG’s position is bolstered even further by its industrial past. HIAG’s strengths as a real estate group run by an entrepreneurial family also come into play in “off-market” projects.
Active acquisition management
During the year under review, HIAG successfully carried out four acquisitions and site consolidations. In addition, six other properties were examined in detail, but HIAG’s requirements were not met – particularly with regard to the interplay between profitability and purchase price. Real estate demand and prices continue to rise sharply, particularly due to the sustained low interest rate situation. Furthermore, more and more new competitors are appearing as buyers that want to enrich their current business model, i.e. the leasing of existing properties, with redevelopment projects. In order to continue to make successful acquisitions in this extremely competitive and often price-dominated market, HIAG relies on the extensive experience of its interdisciplinary core team, composed of its CEO, CFO, General Counsel, site developers and acquisition, building and portfolio managers to complete acquisition projects. This enables it to quickly include the seller’s ideas with short decision-making channels and incorporate customer-specific solutions into its offer. Furthermore, HIAG will continue to strengthen its capacity in this strategic sector in the second quarter of 2020 with the hiring of a dedicated manager for acquisitions and marketing of commercial properties.
With the acquisition of the FCA Switzerland SA site at the end of September 2019, HIAG has secured an attractive redevelopment site in the up-and-coming Altstetten district of Zurich. The approximately 7,800 m² property is located in the five-storey residential zone and will allow high-quality development with around 16,000 m² of floor area. In the medium term, there is potential for the future use of attractive residential and commercial areas. HIAG has already concluded a preliminary contract with a retailer to lease approximately 1,800 m² of ground floor surface area. For the time remaining until the beginning of site redevelopment, a temporary use has been agreed with the Binelli Group. The car dealership with the premium brands BMW and Mini will seamlessly lease the entire site for a minimum period of three and a half years after FCA Switzerland has moved out. It will operate a service centre and a Mini showroom on Freihofstrasse during the renovation of its own premises on nearby Badenerstrasse. HIAG will push forward with site redevelopment during the temporary use phase.
HIAG is one of the largest land owners in Switzerland, with well-connected sites in long-term growth regions such as cities, large municipalities and along major transport corridors. Of the property value, 87% is located in the Baden-Brugg, Zurich-Zug and Geneva regions; 75% are industrial sites, primarily from the textile, paper, chemistry, engineering, IT and food industries. They are exclusively large sites averaging 16,000 m². Many are part of zone developments, sometimes with regional or even supra-regional importance.
Sustainable organic growth
With its large “land bank”, HIAG has a solid foundation to power its own sustainable growth. Its exceptional real estate portfolio is one of HIAG’s strengths, particularly in a tight market where high demand continues to drive up the prices of redevelopment sites considerably.
In order to constantly ensure entrepreneurial flexibility despite long investment timelines of 50 years and longer, HIAG finances land purchases with its own resources as part of its strategic objectives. It actively manages the assets in its real estate portfolio. At most sites, there is already a tenant at the time of acquisition, and HIAG actively promotes interim and temporary uses, the income from which partially covers ongoing costs such as taxes and maintenance. Sometimes properties are used by interim tenants for 10 to 15 years before HIAG begins the definitive redevelopment of a site. Temporary uses are also interesting because they offer the possibility of gradually shaping the character of a property before the definitive site redevelopment begins.
Increase in property value strengthens capital base
Due to its specific business model, HIAG has a very large property portfolio in terms of surface area, while the reported value of the portfolio is comparatively small. This is because much of the surface area is not considered building land yet, and HIAG consistently reports the current value of its sites. At the end of the business year 2019, the total surface area of the site portfolio was 2.7 million m2 with a reported value of CHF 1.57 billion. HIAG sustainably strengthens its capital base with gradual property revaluation over the course of long-term site redevelopment.
St. Margrethen (SG) is home to the HIAG site with the longest strategic planning horizon to date. Construction rights for approximately 70,000 m² of a total of 84,000 m² have been transferred to Stadler Rail until 2080. Stadler has made longterm plans for St. Margrethen and will be generating two generations’ worth of economic momentum for the whole region by establishing the major share of Stadler Rail’s present production and an engineering department at the new factory in St. Margrethen. For the remaining 30,000 m², a rental agreement coordinated with the term of Stadler Rail’s construction rights contract has been signed with Sieber Transport. This international logistics company is now operating at the site, which has its own rail connection, cargo service centre and bonded warehouse.
With a total surface area of about 64,000 m², the Reichhold site is one of the most important redevelopment areas in the canton of Aargau. Thanks to its convenient location near the Zurich/Bern/Basel motorway junction, the Reichhold site, which is located half in the municipality of Hausen (AG) and half in Lupfig (AG), offers practically unlimited redevelopment possibilities. After the land decontamination was completed in the summer of 2019, HIAG will now take on the step-bystep development of the site over the next 15 to 20 years. In the long term, the Reichhold site is to be redeveloped into a mixed-use working quarter. Large-scale production operations will find their place here just as easily as small businesses and office workplaces. Emphasis has been placed on attracting high-tech operations that seek out the qualities of the site and proximity to institutions such as the Paul Scherrer Insitute (PSI).
HIAG’s sites often come from an industrial past. They are acquired at the end of a cycle of use and actively converted into a new, long-term cycle. Forwardthinking planning that takes local planning and approval requirements into account makes it possible to substantially increase the sites’ revaluation. By including the ideas of authorities, residents and future users early on in development, high urban and architectural quality can be attained.
“Village du Soir” – a new leisure offering for the Geneva region
In the Lancy part of Geneva, a new centre with up to 12,000 residential units and 6,200 jobs, as well as an attractive range of infrastructure and public facilities, is being built on around 230 hectares as part of the implementation of the PAV (Praille-Acacias-Vernets) redevelopment project. With the “Porte Sud” site, HIAG is the only private owner at this location in the direct vicinity of the Stade de Genève, which was directly connected to the Léman Express suburban rail line between the main railway station of Geneva and Annemasse (F) at the end of 2019. The “Village du Soir” club was opened at the “Porte Sud” site in 2016. It meets all the requirements for successful interim use. “Village du Soir” is a village composed of cosy, beach-style bars, a night market, small restaurants and shops that constantly develops new, seasonal attractions. “Village du Soir” is now firmly anchored in the region and forms an attractive destination that will continue to exist after the completion of “Porte Sud”. The club has established itself as a recreation centre where people from the Geneva region can meet and spend their free time. Several thousand visitors come to the “Porte Sud” site every weekend in the up-and-coming Lancy part of Geneva. “Village du Soir” has substantially shaped the region’s leisure offering and is now mentioned in international internet forums as among Geneva’s top locations.
Why did you choose the “Porte Sud” site to create “Village du Soir”?
The Geneva region is very densely built up. There are not many options for a project like “Village du Soir”. In this environment, HIAG’s “Porte Sud” site offered a unique opportunity. A stroke of luck!
What has been your experience of the cooperation with HIAG?
Cooperation with HIAG, particularly with our contact partner Yves Perrin, has been excellent from day one. “Village du Soir” is an example of successful site marketing in the region today. It is also a success for HIAG.
What makes “Village du Soir” so unique?
The “Village du Soir” offering is varied. The club offers a wide variety of activities. We invest more than CHF 1 million every year in an attractive programme: markets, festivals, theatre and concerts, conferences and also private events. “Village du Soir” always wants to offer something new and surprising. Since its opening in 2016, almost one million visitors have come to “Village du Soir”, including many decisionmakers from the Geneva political and business world.
How would you describe your cooperation with the authorities?
The authorities have shown a lot of goodwill towards the “Village du Soir” project from the start. You can sense the political desire of the city of Geneva to meet the needs of the population and promote an attractive range of leisure activities in the region.
How do you envision your integration in further site development?
The successful management of a club like “Village du Soir” requires a deep knowledge of the local market and a strong network of regional relationships. We also explained that to the architects involved in the project when we presented them with our ideas of how we would like to continue operating “Village du Soir” as a popular leisure offering for the people of Geneva in the future.
Entrepreneurial community as a lever to increase site potential
With about 322,000 m² of industrial surface area, the Papieri site in Biberist was a paper factory for a good 150 years. It is therefore well integrated as one of the region’s industrial sites and is considered a redevelopment area of cantonal importance. It enjoys a strategic and convenient location along the A1 and A5 motorways between the metropolitan areas of Zurich, Basel and Bassin Lémanique. After the acquisition of the Papieri site in 2012, HIAG launched an interim use in line with the multifaceted potential of the well-connected area, with the aim of positioning the site as an attractive destination for start-ups in the long term. Today, around 20,000 m² of surface area are used by various tenants. The Papieri site is to become a distinctly entrepreneurial innovation site where different companies can implement new concepts. Currently, the Papieri site houses a start-up that develops 3D printing solutions for use in professional sports, mobility and securing clean drinking water in developing countries, the studios of various artists, workshops and the international logistics company Sieber Transport. A fitness centre also opened at the end of 2019, considerably increasing traffic to the site. In the final phase, part of the Papieri site is to become a lively, mixed quarter with retail space, offices, unobtrusive businesses and many options for leisure activities and apartments, which will of course eventually become part of the municipality between Aare and Emme. As the last production unit of the former paper factory in Biberist was dismantled in 2019, the path is clear to tackle the long-term development of the site as a whole, as soon as the master plan developed by HIAG, which is currently under preliminary review by the canton, is converted into the zoning plan.
HIAG’s sites often have a rich industrial past to look back on. Based on the mature history of a site, HIAG develops the identity of a new quarter and designs destinations with high quality urban planning and architecture. This results in an attractive living environment that offers a harmonious blend of housing and jobs.
Sustainable quarters boast considerable sociocultural diversity. That is why HIAG creates framework conditions that promote a lively mix among generations. Examples of this include meeting places for quarter residents, such as cafés, community centres, libraries and leisure facilities. Sustainable quarters are further characterised by apartments that differ in terms of size, room layout and standard. They meet the needs of broad sections of the population and appeal to single people, families, younger people and the elderly. By adding vegetation to the remaining areas and facilities, biodiversity is promoted. This creates the necessary conditions for the development of a long-term independent ecosystem within the quarter.
Tenant mix shapes quarters
Because the tenants are the ones who really bring a quarter to life, HIAG carefully selects suitable tenant structures for its sites. Hospitality and lively communication are also important aspects of sustainable quarter development. That is why it is important for HIAG to be present at its sites. Site developers, portfolio managers and real estate agents always have their finger on the pulse.
Integral mobility planning
A good connection to the environment is equally important when creating a sustainable quarter. This includes the existing infrastructure, public spaces, landscaping and particularly mobility options in addition to the architectural heritage of a site.
Quarter life and mobility go hand in hand, so HIAG takes them into account from the very beginning of a project. For a functionally mixed quarter, it is important to be connected to the public transport network with easily reachable stops, while motorised personal transport is oriented towards specific routes. Within the quarters, pedestrian and bicycle traffic take priority.
HIAG is convinced that sustainable quarters improve the residents’ social integration and can also be a laboratory for new forms of cooperation.
At the Metalli Wideneck site in Dornach, HIAG is making long-term plans for a mixed-use, decidedly urban quarter with a waterfront park along the Birs. In addition to a mixed residential and service use, the site is expected to offer largescale commercial operations. The mobility plan provides for the connection of the quarter to the public transport network via a new bus line and a new suburban rail stop. Inside the quarter, an efficient road network will be created for pedestrians and cyclists. For individual transport, an A18 feeder road has been planned. The long development cycles allow leeway for various interim and temporary uses, enabling gradual maturation of the site. Buildings and shared outdoor areas will give the quarter a distinct identity with an industrial heritage.
What is HIAG’s approach to quarter development?
I see HIAG as a typical Swiss company that addresses the needs of municipalities and cantons with an integrative approach. To do so, HIAG makes plans in the very long term; in Dornach, for example, the planning horizon is around 30 years. That gives you the opportunity to think about a broader picture and development perspectives.
What is special about the Dornach site, from one perspective?
The site is located in the Birsstadt association of municipalities, embedded in the cantons of Basel-Landschaft and Solothurn, with the seven municipalities of Aesch, Arlesheim, Birsfelden, Dornach, Münchenstein, Pfeffingen and Reinach. That means that people think in terms of cultural regions, beyond political borders. HIAG rises to this challenge and participates in the overall development.
The Dornach redevelopment is in the early stage; what’s this phase about?
Urban planning depends primarily on mobility planning, and on movement and reachability in particular. For long-term quarter development, it is important that a site is easily reachable by public transport. In addition, it is a fact that the better the public transport system, the better the street traffic for individual cars. Mobility concepts are therefore best planned holistically and sustainably. So it is a great advantage when a redeveloper like HIAG thinks beyond its own project on a larger scale.
Why is mobility planning so important?
Good mobility planning makes for modern cities and quarters that are not only functional, but also more efficient culturally, ecologically and economically. How a site can be reached and how the smaller streets fan out within the quarters are essential for the long-term development and the character of a destination: suburban trains and high-capacity roads as feeders and an efficient network of smaller streets inside the site, where the “internal” routes often also overlap.
What’s next for the redevelopment?
Planning the various timelines for the components that make up a city or a site is a challenging process. Almost as a by-product, there are always zones that need more time and are therefore transitioned to a temporary use for a limited period of time. They are the lifeblood of urban development. With its long- term vision, HIAG offers good options.
Rainer Klostermann, urban planner
The Walzmühle site, which dates back to 1832, is one of the most important industrial sites in the canton of Thurgau. The approximately 21,000 m² site offers architectural diversity in a small space. In the first phase, HIAG renovated the existing brick building and created workshop, retail and storage spaces. Next, eight loft houses and nine loft apartments were built at the centre of the site with the industrial past of the site taken into account. Finally, HIAG is currently building rental units and office space in the historic Walzmühle building. Several companies have already moved into the Walzmühle site, including the Frauenfeld-based bakery and pastry shop Stähli that runs the “Werk 3” café, a central meeting place in the quarter with seating for more than 50 people and a take-away counter. Since December 2019, the Walzmühle site is directly connected to the Frauenfeld railway station via its own city bus stop.
Rainer Klostermann, urban planner
Where spindles and water wheels once turned, today there is a lively residential quarter spread over approximately 47,000 m² of total surface area. The former industrial site in Windisch has been transformed into a vibrant destination that includes ecological, social and economic aspects. Step by step, lofts, condominiums and rental units along with commercial areas and attractive coworking offices have been created there. In the summer of 2019, the FARO Foundation moved into the new “Spitzmatt residence” for people with disabilities. The associated gymnasium is used jointly by the residents of the Faro Foundation and the quarter, as well as by regional sports associations. The SAC’s Brugg section operates a versatile climbing wall in the hall and the history-charged Diesellokal (“Machine Room”) offers quarter residents an attractive meeting place at the heart of the site.
Rainer Klostermann, urban planner