Allreal reported flat full-year earnings for 2025 on Friday, meeting market forecasts even as rental receipts weakened more than analysts had anticipated. The company said rental income fell 8% year-over-year to CHF204 million, a shortfall versus UBS's estimate of CHF212 million and the consensus forecast of CHF210 million. Management attributed the decline in part to renovation activity and a rise in empty space.
Vacancy rates rose to 3.4%, up 50 basis points relative to the first half of 2025. Despite that deterioration in the rental segment, Allreal delivered net income excluding revaluation gains of CHF122.1 million, unchanged from the prior year and in line with consensus expectations. The firm pointed to stronger results from its development business and lower financial and tax charges as offsets to the rental shortfall.
Development and realisation business
Income from development and realisation climbed 23.6% year-over-year to CHF52.9 million, reflecting continued momentum in the second half after first-half profits of CHF26 million. The realisation order backlog expanded to CHF837 million from CHF667 million in 2024, and the company reported further improvements in gross margins within that business.
Balance sheet and shareholder returns
Allreal reduced its loan-to-value ratio to 45.8%, down from 47.5% in 2024 and 49.5% in the first half of 2024. The company confirmed a dividend of CHF7.0 per share, unchanged and consistent with market expectations.
Valuation gains and overall profit
Valuation gains amounted to CHF125 million for the period, exceeding UBS's estimate of CHF118 million. The company noted that second-half valuation gains were slightly lower than the first half, which recorded CHF70 million. Net profit including revaluation gains totalled CHF219.3 million, about 6% higher than UBS's projection of CHF207 million.
Outlook for 2026
For 2026 Allreal expects rental income to improve and vacancy rates to decline. The company also anticipates increased profits from development activity and a modest rise in construction volumes. Management said operating profit should improve, and it expects a meaningful earnings contribution from the sale of investment properties in the first half of 2026. Balance sheet metrics are projected to remain stable even as financing costs tick up slightly.
Implications
Allreal's full-year results show that weaker rental revenue due to renovation cycles and higher vacancies can be mitigated, at least in the near term, by stronger development performance and lower financing burdens. The company maintained its dividend and presented a 2026 outlook that assumes recovery in rental markets and continued strength in development activities.