Site redevelopment, leasing and infrastructure recognised as value drivers
HIAG has several value drivers that work together to generate attractive overall returns for shareholders. Thanks to a diversified and high-quality group of tenants, the property portfolio provides stable and projectable income and therefore ensures the distribution of attractive dividends. The added value from site redevelopment comes from three core disciplines: architecture and planning processes, site and project sales as well as cost and process control. The added value created by the redevelopment process also expands the collateral value for financing new projects. The company thus manages to press ahead with further redevelopments in its own portfolio without significant additional capital requirements. HIAG invests in infrastructure wherever its integration at the site provides an economic or environmental benefit. For that reason, HIAG has five hydroelectric plants in its portfolio and invests in network development and cloud infrastructures. HIAG distinguishes itself from other market participants by combining the two complementary business models of site redevelopment and cloud infrastructure, fully drawing on the use of digital potential.
“Land bank” with redevelopment as a core business
The Group disposes of a site portfolio at about 40 locations that stretches over a total surface area of 2.5 million m2, 1.6 million m2 of which is zoned. In addition to its existing property portfolio, the company currently plans to establish 603’000 m² of additional usable area in roughly 50 redevelopment projects in the short, medium and long-term with an investment potential of approximately CHF 1.7 billion. This large “land bank” together with its impressive track record in site redevelopment, are important distinguishing features for the company. Furthermore, the portfolio provides a broad mix of uses, which, compared to other portfolios, presents a good balance between residential and industrial / commercial use and features a relatively low proportion of office space. HIAG’s sites are very well located. Approximately 91% of the portfolio is located in the economic core regions of Switzerland around Baden / Brugg, Zurich / Zug, Northwestern Switzerland and Geneva. The scarce land resources in these regions and the recent legally instituted reduction in rezoning of agricultural areas, highlight the need for consolidation and conversion of former industrial sites.
Performance, security and availability
While individuals use cloud solutions as a matter of course, at the end of 2017 only an estimated 5% of companies were cloud-native, and they were primarily young companies. An important reason why companies are hesitant to transfer system-critical processes to virtual locations is that the public internet as a means of communication was not designed for the transfer and availability of system-critical processes. That’s where HIAG Data comes in: with its private and dedicated network connections, it offers a path to cloud computing with at least as much security and availability as a private cloud at a company site, but with a significantly higher performance with regard to the connection to public clouds and virtual cloud infrastructure. With the offer of an end-to-end service level agreement, HIAG Data practically brings the cloud to the company, and via its partners enables a seamless connection to the existing IT infrastructure. For the company-owned virtual cloud infrastructure, which is operated from two data centres in Switzerland, HIAG Data can focus completely on the seamless integration of its own high performance network into the server architecture. This results in application-specific performance improvements that enable new business models. HIAG Data works closely with Microsoft and Hewlett Packard Enterprise to further develop its infrastructure, and serves its users exclusively via its cloud service partner network.
Focused on core processes
HIAG orients its strategic focus towards activities that create the most value during the redevelopment process. Core processes such as site acquisition, control of redevelopment processes, approval procedures, connection to the local infrastructure, portfolio management and sales activities are primarily carried out internally and can be continuously improved through an open, feedback-friendly culture. Building management is conducted by our own personnel at sites where HIAG deems it important to be close to the object; for example, in the case of redevelopment activities at sites with an industrial background. At the same time, the company also focuses heavily on the opportunities and usability of new technologies when designing uses, as well as in all core processes. Activities that are exposed to stiff competition, that have low margins or which are very work-intensive are outsourced. This includes, for example, architectural and technical planning, construction work and property management for yielding properties.
Employees as factors for success
HIAG’s corporate culture, which guides individual and overall development paths, is shaped by its highly qualified employees. Thanks to the flat organisational structure and the very high level of specialisation of most of its staff, each employee takes responsibility, makes decisions and is generally the direct contact person for his or her field of responsibility. Bearing in mind that every employee contributes to success, HIAG promotes initial and continuing training and discusses possible training opportunities during individual performance reviews. Between 2015 and 2017, six employees (out of a total of 33) completed HIAG-supported training courses and took advantage of education programmes, including multi-year study programmes and additional qualifications. The open exchange between employees and managers, which takes place regularly and sporadically, is promoted by HIAG’s corporate culture. This strong company ethos is characterised by trust, passion, the spirit of innovation, the courage to take the initiative and a strong team spirit. In order to promote employee satisfaction, HIAG always strives for reasonable work requirements, fair wages and a very attractive work environment at central locations in Basel, Geneva and Zurich.
Added value through brand management
Thanks to the long-term, consistent, value-based actions of our site developers, the company and the HIAG umbrella brand have gained the valuable trust of important local stakeholders, such as tenants, residents and municipal authorities. This presence interacts with site and project brands. Site brands persist in the long term and are therefore deployed strategically for their identity-creating dimensions. Project brands, on the other hand, are limited in time and primarily serve sales, but also often remain visible as a reference after the completion of a project. It is important to communicate transparently and consistently about the redevelopment service rendered in order to credibly fill HIAG’s brands with relevant content. The perception of the HIAG brand environment can be realistically assessed through personal dialogue with stakeholders. The impressions that are gathered are integrated in the decision-making process on the sites’ strategic focus during the Executive Board’s strategy meetings, which take place several times per year. The subsidiary brand HIAG Data has an explicit relationship with the HIAG brand, while maintaining a completely independent image and communication mix. The communication policies of both brands are considered and implemented in an integrated manner.