10   Investment real estate

The changes in the first half of 2015 can be summarised as follows:

Within the commercial real estate portfolio, the value-enhancing investments relate to the Escher Wyss site, Zurich (CHF 5.1 million), the Toni site, Zurich (CHF 2.6 million), Boulevard Lilienthal 2–8, Opfikon (CHF 1.3 million), the UPC Cablecom office building, Wallisellen (CHF 1.0 million) and four other properties (CHF 1.4 million). Within the residential real estate portfolio, the value-enhancing investments relate to the apartment high-rise at Hardturmstrasse 5, Zurich.

The disposals of yield-producing properties relate to the sale of the residential property Im Lindenhof 7/9/11, Effretikon (CHF 6.4 million), and the commercial property Eggbühlstrasse 21–25, Zurich (CHF 63.4 million).

The reclassification from yield-producing properties to investment real estate under construction (CHF 15.2 million) relates to the separation of the project execution, begun in the first half 2015, of the commercial building at Schiffbauplatz, Zurich, which had previously been reported as part of the Escher-Wyss site.

Largest tenants, commercial real estate

Share in total rental income from commercial real estate:

In the first half of 2015, the five largest tenants account for 45% of rental income from commercial real estate. The ten largest tenants generate 59% of rental income from commercial real estate.

The five largest tenants’ share of total rental income from all yield-producing properties (commercial and residential) declined to around 37% in the first half of 2015.

The weighted remaining term of fixed-term rental contracts is 8.6 years (versus 8.7 years on 31.12.2014).

Schiffbaustrasse, Zurich

New-build seven-floor residential and commercial building to Minergie standard with lettable floor space of 3 397 square metres. The project comprises 450 square metres of commercial space on the ground floor, 590 square metres of office space on the first floor, 23 2½- to 5½-room rental apartments on the second to sixth floors and 15 parking spaces in the underground car park. The project is being built by the Projects & Development division and, upon completion in the first half of 2016, will be reported under the portfolio of yield-producing properties. For the market valuation as at the balance sheet cut-off date, nominal discount and capitalisation rates of 4.50% and 4.00% were applied (31.12.2013: 4.50%). 4.50%).

Schiffbauplatz, Zurich

New-build five- to six-floor residential building to Minergie standard with lettable floor space of 13 100 square metres. The project comprises 10 700 square metres of office space on the first to fifth floors, 1 800 square metres of space for catering and commercial businesses on the ground floor, 600 square metres of storage space and 36 parking spaces in the underground car park. Two ten-year rental agreements have been concluded for the whole of the office space and part of the storage space. The project is being built by the Projects & Development division and, upon completion in the second half of 2017, will be reported under the portfolio of yield-producing properties. For the first-time market valuation as at the balance sheet cut-off date, nominal discount and capitalisation rates of 5.00% and 4.90%, respectively were applied.

All investment real estate properties under construction are solely owned by Allreal.

Yield-producing properties recognised at fair values as at 30 June 2015 (CHF 3 439.3 million) and investment real estate under construction (CHF 33.8 Mio.) qualify as fair values according to category 3. No adjustments were made to valuation techniques or processes during the period under review.