The magnetic attraction of Zurich WestThanks to the Prime Tower, the trendy Zurich district is also attracting tenants in the premium segment. Page 4

Expanding our horizonsIn Sihlcity, there’s more on offer than just great food. Page 3

Historic beauty, modern glamourThe historic Fraumünster post office in Zurich has a new counter hall. Page 8

Swiss Prime Site AG ended financial year 2007 with new record operating results. Net profit almost doubled with an increase of 96.9% to CHF 198.9 million. Earnings before interest and taxes (EBIT) rose by 71.5% to CHF 308.6 mil-lion. Net rental income increased by 6.9% to CHF 204.2 million. In view of these excellent results and the very good prospects for 2008, the Board of Directors applies at the General Assembly of Shareholders of 9 April 2008 for a distri bution of CHF 3.40 [last year: CHF 3.10] per share. This corresponds to a cash yield of 5.9% on the year-end price of CHF 57.50. The net asset value (NAV after deferred taxes) increased in the reporting year by 6.2% to CHF 57.52. Therefore, the share price no longer showed any premium at the end of the year. The property portfolio at the end of 2007, amounting to CHF 3.65 billion, was 5.3% higher than the previous year.

After already recording an excellent result in 2006, Swiss Prime Site AG was able to improve this substantially again in reporting year 2007. Due to the increased demand for high-quality rental space in economically important sites, the net rental income reached CHF 204.2 million [CHF 191.1 million], an increase of 6.9%. Although a high oversupply continued to exist in Zurich and its urban agglomeration, the most important office market in Switzerland, the loss of earnings rate of the Swiss Prime Site portfolio in reporting year fell from 6.3 to 4.9%. Ac-cording to CEO Markus Graf, the fact that the loss of earn-ings is well below the market average is the result of the consistent selection process both in the acquisition of properties and of projects. «We have profited from the fact that we declined many purchase offers in recent years, and

we have sold buildings that did not comply with our strategy», said Graf, commenting on the current situation. In Switzerland in 2007, around 10% of all office space was vacant.

Revenue figures at record levelsIn financial year 2007, Swiss Prime Site again provided its extraordinary earnings strength. Earnings before interest and taxes (EBIT) rose by 71.5% to CHF 308.6 million [CHF 179.9 million]. Corrected for revalua-tion effects, EBIT rose by 2.6% to CHF 150.1 million [CHF 146.3 million], resulting in an EBIT margin of 73.3% [75.5%]. Net profit, which crossed the CHF 100 million threshold in the previous year, was almost doubled in 2007. It rose from CHF 101.0 million to CHF 198.9 million. A contribution of CHF 31.0 million evaluation profit and CHF 6.8 million of rental income was also made by Sihlcity in Zurich South which opened on 22 March 2007.

The weighted earnings per share have in-creased by 106.3% to CHF 8.13 [CHF 3.94]. The net asset value (NAV) after deferred taxes has increased by 6.2% to CHF 57.52

New record operating results thanks to best performance

F i n a n c i a l y e a r 2 0 0 7 a t S w i s s P r i m e S i t e A G

Markus Graf, CEO of Swiss Prime Site AG

Continued on page 2

No. 18 | in March 2008

Contents

Swiss Prime Site in financial year 2007 1/2

Feasting in Sihlcity 3

The rise of Zurich West 4/5

Excerpt from the annual report 6/7

Fraumünsterpost in Zurich 8

NAVCHF 63.81 as at 31.12.2007CHF 57.97 as at 31.12.2006before deferred taxessecurities number 803 838SWX symbol SPSN

2 Business News l No. 18 | in March 2008

[CHF 54.14] and before deferred taxes by 10.1% to CHF 63.81 [CHF 57.97]. The pre-mium, as the difference between the stock exchange share price (CHF 57.50) and the NAV after deferred taxes (CHF 57.52), was zero at the end of 2007.

The average weighted interest rate of all financial liabilities, at an average resid-ual term of 4.2 [4.7] years, remained un-changed at 3.0% [3.0%]. The equity ratio fell from 39.6 to 35.7%. The decline in the equity ratio is caused by the acquisition of treasury shares in the amount of around 10% of all outstanding shares. According to the IFRS regulations, these treasury shares must be deducted from the shareholders’ equity.

The profits earned and the promising out-look led the Board of Directors to apply to the General Assembly of Shareholders of 9 April 2008 for a distribution of CHF 3.40 [CHF 3.10] per share. The payout will again be made in the form of a nominal value reduction which is attractive for tax pur-

poses to private individuals. Calculated at the closing share price on 31 December 2007 of CHF 57.50, this results in a cash yield of 5.9%, which once again confirms the reputation of Swiss Prime Site AG as an attractive swiss income stock.

Prime tenants The fact that quality attracts quality is shown by the tenant structure of Swiss Prime Site. The three largest tenants, which contribute more than one-third to the total earnings, are the service compa-nies UBS, Credit Suisse Group and Swiss-com. They are followed by the companies Coop, Pfister furnishing store, ABB, Charles Vögele Switzerland, Event Hotel Basel AG, Roche and AXA Winterthur Insurance. With these ten tenants, around 54% of the rental proceeds was earned in the reporting year.It also proved possible to secure top ten-ants for the buildings at the Maag site in Zurich West. The distinguished business

law firm Homburger AG will move into the Prime Tower. And the commercial build-ing Platform will serve as the new Zurich office of the auditing and consulting firm Ernst & Young.

Portfolio of projects The value of the property portfolio at the end of 2007 amounted to CHF 3.65 billion [CHF 3.47 billion] (excluding PostFinance Arena). The market value determined by the independent valuer Wüest & Partner increased within the annual period by 5.3% or CHF 183.8 million. The increase is composed of investments in new pro-jects such as Sihlcity (including evaluation profit) and the Maag site in Zurich of CHF 54.7 million, the acquisition of two properties (Zollikon and St. Gallen) with a market value of CHF 18.0 million, disposals of nine pro perties which do not comply with the strategy with a market value of CHF 27.8 million and the positive market value adjustments (including renovations/investments) of CHF 138.9 million with the existing properties.

One of the most important events in the reporting year was the opening of Sihlcity in Zurich South on 22 March 2007. Swiss Prime Site AG has a 24.2% interest in this complex, which generates annual rental income of over CHF 46 million.

Maag siteAt the Maag site in Zurich West, the con-struction work on the Prime Tower with its adjacent buildings has been under way since February 2008. At the end of Novem-ber 2007, Swiss Prime Site entrusted the cons truction of the Prime Tower and the Cubus and Diagonal buildings to a consor- tium consisting of Losinger Construction AG (lead management) and Karl Steiner AG.

The general-contractor contract for the construction of the commercial build-ing Platform, which is completely leased by Ernst & Young, was awarded to HRS Hauser Rutishauser Suter AG, Frauenfeld.

The building application for the building Platform has been filed. It is anticipated that the new construction will begin in autumn 2008. The investment volume for the Prime Tower and the three other buildings amounts to approximately CHF 355 million. The four buildings were 45% rented as at 31.12.2007.

PostFinance Arena, Bern The work in Bern on the ice arena is progressing accord-ing to plan. As soon as the current ice hockey season has ended, the work in relation to the existing ice hall will be started so that it will be ready again in time for the Ice Hockey Club Bern to use it for the 2008/2009 season. The Ice Hockey World Championship 2009 will be a great opening for the ice hall. With the rental contract concluded in December 2007 with Swiss Post relating to more than 7 000 m2 of office space, the overall investment is today already showing an occupancy rate of around 94%.

OutlockBased on the rental contracts concluded as well as the generally good rentability of high-value office and ser-vice space, Swiss Prime Site assumes a further increase in rental income and an improvement in its operating profit for the current year. Against the market trend and the complex uncertainties, Swiss Prime Site can achieve

a tendency towards higher prices per square metre in the Zurich region, to which about half of the entire portfolio value is allotted. In addition, the company was able to profit from the high office space prices in regions such as Basel, Bern and Zug, as well as the sustained high price level in Geneva.

Earnings from retail premises, from which Swiss Prime Site achieves over one-fifth of its entire rental income, also show an increasing trend. In a stable macroeconomic environment, the higher turnover in the retail properties of Swiss Prime Site AG will continue to have a positive impact on earnings.

The construction of the Prime Tower is anticipated to end in spring 2011.

The work on the PostFinance Arena in Bern is proceeding according to plan.

3No. 18 | in March 2008 l Inside

S i h l c i t y

Feast, dream, workSihlcity, which opened its doors around one year ago, has established itself as the optimal destination for shopping, enter-tainment and health/wellness. The wide variety of dining options plays a major role in the strong visitor and turnover figures.

«Of course, Sihlcity is also a shopping cen-ter, but not in the usual sense of that term.Its innovative aspect is its mise-en-scène as a city concept», wrote Benedikt Loderer, editor-in-chief of the architecture journal «Hochparterre», in a supplement about Sihl-city published in 2007. Viewed from the Sihl, the Kalanderplatz reminds him of a stage designed by Sebastiano Serlio in 1545 for a comedy. Both the Italian stage and the Kalanderplatz form the vibrant center. «Sihl-city is a stage on which upscale everyday life is played out», concluded Loderer.

Sihlcity in the opening year(22 March to 31 December 2007)

Turnover CHF 245 millionTotal visitors 4.2 millionVisitors per trading day 18 000

This means that the Urban Entertain-ment Center Sihlcity ranks among the five leading shopping centers in Swit-zerland.

Fine dining distinguishes the Kalander-platz − and vice versaThe Kalanderplatz confirms its function as the central hub of Sihlcity with the highly visible presence of fine-dining establish-ments. No less than seven restaurant businesses can be found directly within the square, and a further six are located in-side the mall and along the Kalandergasse. From the end of April 2008, there will even be a restaurant called «Der Veg» catering especially to lovers of vegetarian cuisine. What appears to be arbitrary diversity is actually the result of sophisticated blend-ing. «On the one hand, the restaurants had to be suited to the overall tenant mix, but on the other hand they also had to comple-ment one another», explains Markus Graf, CEO of Swiss Prime Site AG, which is a 24.2% owner of Sihlcity. For this reason, not only do you find different culinary ac-cents, but also a broad spectrum of busi-ness models, operating concepts and sty-listic formats.

Global offeringsAt Hong-Kong Food Paradise, lovers of fresh Asian cuisine will find the menu to satisfy their desires. They can tour be-tween different islands and select spe- cialities from China, Thailand, Japan, In-dia and Korea. A cosy coffeehouse atmos-phere with an ample assortment of cakes and sandwiches can be enjoyed by visitors to Starbucks. Whoppers of various varie-ties, fresh salads, French fries and cola are the order of the day at Burger King. Latin

America is represented at Tepuy, a snack bar offering arepas (cornmeal pockets with various fillings), churros and exotic fruit juices that bring a new tropical accent to the fast-food business.

At Vapiano, antipasti, pasta dishes, pizzas and dolci are attractively presented on a long counter before the eyes of the customers. At the Café Côte d’Azur, fine coffees, exquisite teas, sandwiches and desserts are on offer. A Mediterranean flavour prevails at the Gelateria Leonardo where icecream of all varieties, freshly made every day, catches the eye of customers. For sweet fare such as pa-tisserie and gateaus, as well as fresh breads, quiches and tarts, Confiserie & Coffee Müller comes recommended. Oh là là stands for seasonal foods for takeaways and bar service in the evenings.

Imagine is seen as a lifestyle restaurant with grill specia-lities and a feel-good bar. The Rüsterei offers a range of possibilities such as restaurant, bar, speciality shop and wine shop. The Sunday brunch has already become a tradition. Of course, the Hotel Four Points by Sheraton also presents its own culinary offerings, specifically the Restaurant Rampe Süd in the historic-monument section and the Urbano Bar & Lounge.

Spending the night at ShilcityIt was expected that Sihlcity would attract many enthu-siastic visitors. But is the destination also the right place to spend the night? The Hotel Four Points by Sheraton is the clear answer. The 132 rooms and suites in this 4-star hotel have had very high occupancy since day one. Busi-ness people in particular value being able to spend the night in a place where the comprehensive offerings of a small city are available in the immediate vicinity. The hotel’s guests even have direct access to Asia Spa, an oasis of well-being.

1 200 additional jobsAs a workplace, Sihlcity is also undergoing dynamic de-velopment. At the end of 2007, around 1 300 people were employed at Sihlcity, but since then this figure has already grown to around 2 500 people. In the first quarter, the 1 200 employees of the Asset Management department of Credit Suisse moved to Sihlcity from various locations and have started work in the innovatively designed, generously proportioned office space.

One year after the opening of Sihlcity, the evaluation can only be extremely positive. The 97 000 m2 are fully rented, and the rents amount to around CHF 46 million per year. The shareholders of Swiss Prime Site AG can feel more than contented with this success.

Imagine – Bar, Grill & Music Urbano Bar & Lounge Restaurant Vapiano Restaurant Rüsterei

4 Portrait l No. 18 | in March 2008

Z u r i c h W e s t

Promotion to the premier leagueAt the start of the year, construction began on the 126-me-ter tall Prime Tower and its adjacent buildings Cubus and Diagonal. This heralds the start of a new era in the chang-ing history of Zurich West, the industrial district of Zurich. With the new construction, even tenants in the premium segment such as law firms, auditors and consultants move into the district.

The fact that a leading law firm would establish its domi-cile at the site of the former Maag gearwheel factory in Zurich West is not entirely obvious. Just a few years ago, an address in the industrial district of Zurich would have been unthinkable for a service provider in the premium segment. Swiss Prime Site AG has made a considerable contribution to this change of mind and values. Until 2011, it is building the 126-meter tall Prime Tower, which will serve as the new corporate headquarters of business law firm Homburger AG, among other tenants. As the anchor tenant, the distinguished law firm has negotiated a long-term lease for eight floors. Next to it, additional buildings like Cubus, Diagonal and Platform are being developed. They are aimed at tenants who have the high-est demands firstly for architecture and secondly for ac-cessibility and environmental quality. The auditing and consulting firm Ernst & Young will establish its Zurich office in Platform.

In recent decades, Zurich West has evolved from a 1.3 km2 industrial district into a vibrant city area with a wide variety of uses. Offices, businesses, schools, shopping, culture, entertainment and fine dining as well as different mixed variants have all found their place in Zurich West. The dif-ferent types of use complement and strengthen each other reciprocally. According to the Office for Urban Planning, the number of residents will increase from 3 000 today to around 7 000 by 2015. An increase in jobs from barely 20 000 today to around 31 000 is anticipated.

A widely supported district developmentThe dynamism of Zurich West was made possible by the desire for collaboration between the government and private enterprise. The trigger event was the City Forum launched in 1996, which brought the authorities and pri-vate landowners to the discussion table after many years of politically motivated conflict, and resulted in the «Maag Site Plus» special building regulations which came into force in September 2005, in addition to other measures. The government and administration had accepted that private investors were required for the development of a city, and that these private parties only invest when there is a legally guaranteed possibility of uses in line with market trends and the opportunity for appropriate returns on investment. In return, the private investors were prepared to orient their projects more strongly towards an orderly city development. In this way, a synthesis of views was reached, which still serves as the guideline for future developments today.

The example of Zurich West has also shown that city development no longer needs to be equated with geo-graphical expansion of the city area and increased land consumption. The issue is instead the intelligent, innova-tive and most consolidative use of existing urban spaces.Such a strategy has met with broad support. The fact that the revival of the district is strongly supported is also shown by the clear approval by the voting residents of the city and canton for the construction of the Zurich West tram line (main station – Escher-Wyss-Platz – Hardstrasse – Pfingstweidstrasse – Aargauerstrasse – Altstetten North station) in the past year.

Cinemax created the impetusA concentration of office and service buildings had already sprung up in Hardturmstrasse a long time ago, and the Around the Prime Tower, additional large projects are planned which will define the character of Zurich West.

Toni site

College for Art and Design for 1 600 employees and 2 800 students

Zurich stadium

Prime Tower and Platform

Stadtraum HB Zürich

Residential tower Hard tram depot

Hardturm site

400–500 apartments, up to 2 000 jobs

Police and Justice Center

Construction planned 2009–2013

Coop site

600 apartments, 50 000 m2 office and industrial space, construction planned 2008–2010

5No. 18 | in March 2008 l Portrait

buildings Com.West and West-Park, West-Side, the new Steinfels building of the Zürcher Kantonalbank, Puls 5, et cetera. In the coming years, around two dozen large-scale projects are planned. Particularly worthy of note are the new football sta- dium and the large complex of Hardturm Immobilien AG, the College for Art and De-sign at the Toni site or, in the residential sec-tor, a high-rise with 63 rental units at Escher-Wyss-Platz, an urban residential tower with 200 units at the site of the Hard tram depot (Kleeblatt), a residential and office complex at the Löwenbräu site and a high-rise at the Coop site in Pfingstweidstrasse, direct-ly adjacent to the Maag site. The 24-storey building is designed for upscale living for owners and tenants.

Prime Tower expands the usage mixThe district’s next development phase is now imminent. Since February 2008, construction has been under way at the 35 000 m2 Maag site. Here, Swiss Prime Site AG is executing the largest develop-ment project in the company’s history. The investment for the first stage of the complex, amounting to CHF 355 million, is allocated to the construction of the Prime Tower with its two adjacent buildings, Cu-bus and Diagonal, and the Platform project.

Zürcher Kantonalbank and Kuoni Travel have also been prominently represented in the new Hard for several years. However, these buildings and their use had scarcely any influence on the culture of the district. The change from a working-class and in-dustrial district into a trendy destination began with the start of the Technology Park and the Cinemax complex (today called «abaton») at the Steinfels site. The first loft residences appeared here in the mid-1990s. Thanks to the Limmatwest complex, Zurich West was able to establish itself as a modern, high-quality residential district. In the cultural arena, the breakthrough occurred when «Schiffbau» was converted into a center for culture. Cultural offerings enabled by the interim use of abandoned industrial spaces gave an important impe-tus to the district. Theatres, galleries and studios moved into factories and ware-houses. «In Zurich West, culture triggered an actual process of gentrification», recalls Peter Lehmann, Chief Investment Officer of Swiss Prime Site AG.

However, although the change of use ac-companying deindustrialisation firstly oc-curred in a very unobtrusive way, it gained tremendous momentum after the Millen-nium: Novotel-Ibis-Etap-hotels, the office

The 126-meter tall Prime Tower has 36 floors and a rental area of 39 500 m2 and will be a workplace for up to 2 000 people on completion by the year 2011.

With the high-quality space it offers, Prime Tower has opened up Zurich West to a new rental segment. Every-thing suggests that the high-quality anchor tenants will be followed by additional renowned service provider compa-nies. Zurich West is all the more deserving of its reputation as a mixed-use district.

The Maag site represents a fusion of different usagetypes – from business to fine dining to cultural attractions.

Key figures for the Prime Tower and Platform projects Prime Tower Total including Cubus overall and Diagonal Platform complex

Plot area m2 9 800 6 600 16 400

Construction period 2008–2011 autumn 2008*–2011*

Investment costs (excluding land) approx. CHF m n/a n/a 355

Target rental income p.a. CHF m n/a n/a 27.5

Rental floor space (including storage) approx. m2 47 800 20 900 68 700

Occupancy rate (31.12.2007) per cent n/a n/a 45

Number of parking spaces 182 82 264

* Subject to valid building permit in 2008

6 Annual report l No. 18 | in March 2008

Consolidated income statementin CHF 1 000 01.01.–31.12.2007 01.01.–31.12.2006Rental income from investment properties 204 201 191 078Proceeds of property sales, net 151 509 Proceeds of sale of other fixed assets, net – 1 731 Other operating income 402 454Operating income 204 754 193 772Direct operating expenses 33 263 30 233Change in fair value of investment properties (revaluation), net (158 447) (33 573) Personnel costs 1 038 1 145Other operating expenses 20 348 16 046Operating expenses (103 798) 13 851Operating profit (EBIT) 308 552 179 921Financial expenses 62 879 58 466Financial income 148 257Profit before income taxes 245 821 121 712Income taxes 46 955 20 697Profit for the reporting period 198 866 101 015Of which minority interests – – Basic earnings per share, CHF 8.13 3.94 Diluted earnings per share, CHF 7.48 3.71

Consolidated balance sheetin CHF 1 000 31.12.2007 31.12.2006Cash 1 269 2 272Securities 227 227Accounts receivable 24 641 24 583Other receivables 40 676 5 073Accrued income and prepaid expenses 4 089 3 163Properties held for sale 15 878 3 926Current assets 86 780 39 244Long-term financial assets 1 371 1 466Investment properties including building land 3 521 785 3 231 536Properties under construction and development sites 113 975 232 383Deferred income tax assets 4 751 2 530Fixed assets 3 641 882 3 467 915Total assets 3 728 662 3 507 159

Accounts payable 2 920 1 336Short-term financial liabilities 319 772 173 000Other short-term liabilities 4 844 4 779Advance payments 24 750 23 202Current income tax liabilities 4 919 8 485Accrued expenses and deferred income 17 027 13 571Short-term liabilities 374 232 224 373Long-term financial liabilities 1 878 772 1 794 907Deferred income tax liabilities 145 424 98 287Provisions 586 770Long-term liabilities 2 024 782 1 893 964Liabilities 2 399 014 2 118 337Share capital* 656 732 736 258Capital reserves* 77 454 255 968Retained earnings 595 462 396 596Shareholders’ equity before minority interests 1 329 648 1 388 822Minority interests – –Total shareholders’ equity 1 329 648 1 388 822Total liabilities and shareholders’ equity 3 728 662 3 507 159

Consolidated cash flow statementin CHF 1 000 01.01.–31.12.2007 01.01.–31.12.2006Profit for the reporting period 198 866 101 015Proceeds of property sales, net (151) (509)Proceeds of sales of investments in associates, net – (1 731)Change in fair value of investment properties (revaluation), net (158 447) (33 573)Change in market value of securities (trading) (3) (112)Increase in deferred income tax assets (2 221) (930)Amortisation cost of convertible bond 865 865Share-based basic fee 238 291Increase in deferred income tax liabilities 47 137 13 918 Release of provision (184) –Interest expenses 62 000 57 601Interest income (138) (143)Income taxes 2 040 7 709Increase/decrease in accounts receivable (58) 2 364Increase/decrease in other receivables (2 910) 8 076Increase/decrease in accrued income and prepaid expenses (926) 4 270Increase/decrease in accounts payable 1 584 (3 285)Increase/decrease in other short-term liabilities and advance payments 1 613 (3 290)Increase/decrease in accrued expenses and deferred income 5 297 (7 640)Interest payments made (63 841) (56 522)Interest payments received 138 143Income tax payments (5 606) (858)Cash flow from operating activities 85 293 87 659Investments in investment properties (43 662) (119 617)Investments in properties under construction and development sites (9 866) (42 206)Installments for PostFinance Arena (32 692) –Divestments of investment properties 28 332 38 690Investments in securities (trading) – (30)Divestments of securities (trading) 3 3Divestments of long-term financial assets 95 49Divestments of investments in associates – 4 000 Cash flow from investment activities (57 790) (119 111)Increase in financial liabilities 1 666 072 352 000Repayment of financial liabilities (1 436 300) (255 625)Nominal value reduction (79 526) (71 830)Nominal value reduction on treasury shares 74 28Purchase of treasury shares (179 007) (2 120)Sale of treasury shares 181 5 522Cash flow from financing activities (28 506) 27 975Net decrease in cash (1 003) (3 477)Cash at beginning of reporting period 2 272 5 749Cash at end of reporting period 1 269 2 272

Zurich 46%Southern Switzerland 0%

Geneva 9% Western Switzerland 1%

Bern 10%

NorthwesternSwitzerland 19%

Central Switzerland 9%Eastern Switzerland 6%

Offices 56%Residential 2%Other 4%

Parking 5%

Storage 6%

Cinemas/ restaurants 5%

Retail 22%

Excerpt from the annual report

* In the share capital, the nominal share capital is stated (previously the dividend-entitled share capital). The changes due to trading with treasury shares and share-based basic fees were completely charged from or cre dited to the capital reserves. The previous year was adjusted accordingly.

Portfolio split by regionBased on the market values as at 31.12.2007

Portfolio split by type of useBased on the net rental income as at 31.12.2007

7No. 18 | in March 2008 l Annual report

10.4%

4.1%

1.6%

1.5%

3.0%

10.2%

13.8%

12.9%

12.0%

13.8%

16.7%

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Consolidated statement of changes in shareholders’ equity Shareholders’ equity Capital of shareholders Share reserves Retained of Swiss Minority Total share-in CHF 1 000 capital* (premium)* earnings Prime Site AG interests holders’ equityAs at 01.01.2006 808 088 252 247 295 581 1 355 916 – 1 355 916Profit for the period – – 101 015 101 015 – 101 015Profit distributions – – – – – –Nominal value reduction on 17.07.2006 (71 830) – – (71 830) – (71 830)Nominal value reduction on treasury shares – 28 – 28 – 28Share-based fee – 291 – 291 – 291Purchase of treasury shares – (2 120) – (2 120) – (2 120)Sale of treasury shares – 5 522 – 5 522 – 5 522As at 31.12.2006 736 258 255 968 396 596 1 388 822 – 1 388 822Profit for the period – – 198 866 198 866 – 198 866Profit distributions – – – – – –Nominal value reduction on 06.07.2007 (79 526) – – (79 526) – (79 526)Nominal value reduction on treasury shares – 74 – 74 – 74Share-based fee – 238 – 238 – 238Purchase of treasury shares – (179 007) – (179 007) – (179 007)Sale of treasury shares – 181 – 181 – 181As at 31.12.2007 656 732 77 454 595 462 1 329 648 – 1 329 648

* The statement of the shareholders’ equity was changed. In the share capital, the nominal share capital is stated (previously the dividend-entitled share capital). The changes due to trading with treasury shares and share-based basic fees were completely charged from or credited to the capital reserves. The previous year was adjusted accordingly.

No gains or losses were recognised directly in shareholders’ equity.

Annex to the consolidated short report

Earnings per share The profit used to calculate the basic earnings per share or the diluted earnings per share is the annual profit reported by Swiss Prime Site. According to IAS 33, both the basic earnings per share and the diluted earnings per share are reported. The average number of shares was:

Number of shares 01.01.–31.12.2007 01.01.–31.12.2006Shares issued 01.01.–31.12. (360 days) 25 653 598 25 653 598Average stock of treasury shares (360 days) (1 183 939) (20 310)Weighted average number of shares 01.01.–31.12. (360 days) 24 469 659 25 633 288

The average weighted earnings per share in CHF amounted toBasic earnings per share 8.13 3.94Diluted earnings per share 7.48 3.71

For the calculation of the diluted earnings per share, the profit of CHF 198.866 million [CHF 101.015 million] was adjusted to account for the effects of the convertible bond, i.e. interest, issuing cost and tax effects. This resulted in a diluted profit of CHF 203.131 million [CHF 105.025 million]. The weighted number of shares of 24 469 659 [25 633 288] was increased by the maximum weighted number of shares that can be possibly issued upon conversion of 2 692 430 [2 681 388] to 27 162 089 [28 314 676] shares.

Based on the conversion price as of 31.12.2007 of CHF 63.14 [CHF 63.40] per share and assuming a 100% conversion, 2 692 430 [2 681 388] new shares would be issued.

Shareholders’ equity The General Assembly of Shareholders of 18.04.2007 decided on a nominal value reduction of CHF 79.526 million to CHF 656.732 million (CHF 3.10 per share of CHF 28.70 nominal). The payout was made on 06.07.2007. The nominal value per share after the repayment was CHF 25.60.

Selected key figures Details in 31.12.2007 31.12.2006 Change in %Earnings before interest, taxes, depreciation and amortisation (EBITDA) CHF m 308.6 179.9 71.5Earnings before interest and taxes (EBIT) CHF m 308.6 179.9 71.5

Profit for the period CHF m 198.9 101.0 96.9

Shareholders’ equity before minority interests CHF m 1 329.6 1 388.8 (4.3)Equity ratio % 35.7 39.6 (9.8)Borrowed capital CHF m 2 399.0 2 118.3 13.3Borrowed capital ratio % 64.3 60.4 6.5 ROE (weighted) % 14.6 7.4 97.3ROIC (weighted) % 7.2 4.6 56.5

Figures without revaluation effects* Earnings before interest and taxes (EBIT) CHF m 150.1 146.3 2.6EBIT margin % 73.3 75.5 (2.9)Profit for the period CHF m 85.3 80.4 6.1Earnings per share (weighted) CHF/share 3.49 3.14 11.1ROE (weighted) % 7.2 6.2 16.1

* Revaluations (IAS 40) and deferred taxes

Particulars of property portfolio

Market matrix: market assessmentof the individual propertiesAs at 31.12.2007, source: Wüest & Partner

Portfolio by contractualend of rental relationshipBased on the rental income as at 31.12.2007

Top tenantsAs at the balance sheet date of 31.12.2007, the five largest groups of tenants accounted for 44.1% [44.2%] of future rental income. The indi-vidual tenants have a good credit rating. The following groups were involved:

31.12.2007share %

UBS AG 15.2 Credit Suisse Group 10.3 Swisscom 9.4 Coop 6.8 Pfister (furnishing store) 2.4

Market value in CHF m Rent income in CHF m Net yield in % Loss of earnings rate in % 31.12.2007 31.12.2006 31.12.2007 31.12.2006 31.12.2007 31.12.2006 31.12.2007 31.12.2006 Zurich 1 563.3 1 316.9 85.3 76.2 5.2 5.3 3.9 5.6 Central Switzerland 341.7 329.5 20.7 20.0 5.6 5.5 2.1 4.2 Eastern Switzerland 201.7 194.4 13.2 13.2 5.6 5.7 1.7 2.9 Northwestern Switzerland 692.9 676.8 38.8 34.4 5.0 4.8 7.3 9.4 Bern 369.8 366.8 22.4 22.7 5.2 5.4 5.8 6.5 Geneva 324.4 301.1 17.3 17.4 4.6 5.1 6.4 6.0 Western Switzerland 35.7 41.7 2.5 2.6 4.7 4.2 20.2 23.5 Southern Switzerland 8.1 8.2 0.4 0.7 3.7 6.5 28.9 2.5 Subtotal 3 537.6 3 235.4 200.6 187.2 5.2 5.2 5.0 6.4 Properties under construction/ development sites 114.0 232.4 3.6 3.9 n/a n/a – – Total 3 651.6 3 467.8 204.2 191.1 n/a n/a 4.9 6.3

8 Update l No. 18 | in March 2008

F r a u m ü n s t e r p o s t i n Z u r i c h

Flagship with new splendour

01.0

1.20

07

31.0

1.20

07

28.0

2.20

07

31.0

3.20

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30.0

4.20

07

31.0

5.20

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30.0

6.20

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31.0

7.20

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31.0

8.20

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30.0

9.20

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31.1

0.20

07

30.1

1.20

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31.1

2.20

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115

110

105

100

95

90

85

80

Share price 01.01.–31.12.200731.12.2007 CHF 57.50High CHF 75.90Low CHF 57.50 SPS SWX Real Estate Sector Index SPI

Trend of the Swiss Prime Site share(reinvested) 01.01.– 31.12.2007

From spring 2008, the post office clients will benefit from a stylishly refurbished and modernised counter hall. Together with the counter hall renovation for the post office, the ceilings in the basement and the sewer system were also refurbished.

The investment focus of Swiss Prime Site AG is oriented towards first-class properties in selected economic locations. This also includes older properties such as the build-ing located at Fraumünsterstrasse 16 in Zurich, which was constructed in 1901 and totally renovated in 1990. However, older buildings sometimes require larger-scale investments to preserve their structural fabric and value. This was the case with Fraumünsterpost.

New ceilings and pipesThe project, begun in 2007, involves the re-construction of the ceiling in the basement and the renovation of the pipes and sewer

system, among other work. The investment amounts to CHF 6.5 million. The renovation of the ceilings was on the one hand necessary because earlier owners and tenants in the building’s 107-year history had made numerous modifications affecting the structural engineering and the construction no longer complied with present-day requirements. On the other hand, Swiss Post, which rents the entire ground floor, wanted to redesign its premises including the counter hall. Swiss Prime Site AG as the owner and Swiss Post as the tenant therefore decided to perform the renovation of the building structures and the redesign of the counter hall in a coordinated manner using a single general contractor.

Renovation with business as usualImplenia AG, which was entrusted with all the work, had to give consideration not only to the structural engineering and the preservation of the building fabric, but also had to ensure the continuing operation of the post office branch. This required the division of the work into stages and the construction of a temporary replacement for the counter hall within the building. Throughout the entire redesign, the required operational safety had to be ensured.

But how could it be possible to reconcile safety, optimal business processes and respect for the historical building fabric? «Today, that is largely possible from a technical viewpoint, but not at all cheap», says Andreas Brönni-mann, Chief Real-Estate Officer of Swiss Post. Brönnimann is aware that modern technology opens up ingenious pos-sibilities in this regard. He adds: «Substantial additional costs had to be taken into account for this.»

The flagship among Zurich’s post office branchesWhat are the benefits the post office client gets from the new counter hall? It becomes larger − with an in-crease in area thanks to a reduction in the back office − brighter, modern and lavishly designed. For the redesign and the new customer area, Swiss Post invested over CHF 2 million. The expenditure is warranted by the high importance of the Fraumünster post office. «It is the post office branch used by private and business customers in the Bahnhofstrasse area. It enjoys a reputation as the flagship among Zurich’s post offices», explains Andreas Brönnimann. The flagship function is also recognised by the managerial responsibility held by the Fraumünster post office for other post office branches (including Enge in Zurich). Incidentally, the Fraumünster post office contains the only philately counter in the city of Zurich.

The renovation of the Fraumünsterpost is a challenge for Swiss Prime Site. However, the expenditure is worthwhile. Firstly, the renovation project can be viewed as a far-sighted investment in a landmark building in an optimal central location. Secondly, the work can be performed in close agreement with a tenant which is competent in matters of structural engineering. «The collaboration with Swiss Prime Site AG was very pleasant», confirmed Andreas Brönnimann, Chief Real-Estate Officer.

Disclaimer: The financial data presented and the other reports in Swiss Prime are selected information. You can request a copy of the annual or interim report from the company in writing or by telephone. This information constitutes neither an offer nor a recommendation to buy Swiss Prime Site AG shares. It shall not be disseminated in jurisdictions where it infringes applicable law or regulations. Statements about the future involve uncertainties and risks which may mean that the events that happen to the company in fact differ from the forecast situation.

ContactsCompanySwiss Prime Site AGFroburgstrasse 15, CH-4601 OltenTel. +41 (0)62 213 06 06Fax +41 (0)62 213 06 09www.swiss-prime-site.ch

Chairman of the Board of DirectorsHans Peter Wehrlihans.peter.wehrli@swiss-prime-site.ch

CEOMarkus Graf markus.graf@swiss-prime-site.ch

CFOPeter Wullschlegerpeter.wullschleger@swiss-prime-site.ch

Press and media relationsNicole Stammnicole.stamm@swiss-prime-site.ch

Agenda9 April 2008General Assembly of Swiss Prime Site AG for the financial year 2007

26 August 2008Semiannual report on 30.06.2008with balance sheet media conference

Share detailsShare price 01.01.–31.12.200731.12.2007 CHF 57.50High CHF 75.90Low CHF 57.50 Market capitalisation31.12.2007 CHF m 1 475.1

NAV before deferred taxes*31.12.2007 CHF 63.8131.12.2006 CHF 57.97Change 10.1%

NAV after deferred taxes*31.12.2007 CHF 57.5231.12.2006 CHF 54.14Change 6.2%

Earnings per share (weighted) 31.12.2007 CHF 8.1331.12.2006 CHF 3.94Change 106.3%

Share statisticsTotal registered shares 25 653 598Securities number 803 838ISIN number CH 000 803 838 9SWX symbol SPSNFirst trading day 05.04.2000

* Any minority interests included in the share- holders’ equity are not taken into account for NAV calculation purposes.