Zurich Airport News Flash No. 21 / Financing of large-scale project The Circle secured - Swiss Life becomes Co-Investor
A further important milestone for The Circle was reached with the achievement of yet another condition for the realisation of the project. Today, Flughafen Zürich AG and Swiss Life AG have signed an agreement for joint funding of the real estate project. As per the beginning of the construction work, both partners will form a joint ownership structure (“Miteigentum”) with a participation of 51% for Flughafen Zürich AG and 49% for Swiss Life AG.
Securing the financing of The Circle is a mandatory precondition for the subsequent realisation of the project. Therefore, Flughafen Zürich AG, together with Jones Lang LaSalle, initialised the global search for a suitable partner in June this year, a process that was successfully brought to its conclusion by the signing of the financing agreements today. The decision of Flughafen Zürich AG to build a long-term partnership with Swiss Life AG is based on Swiss Life AG’s proven expertise and long-term orientation as a real estate investor.
The signed agreements provide a joint ownership structure with a participation of 51% for Flughafen Zürich AG and 49% for Swiss Life AG. Flughafen Zürich AG will also contribute the land into the joint ownership structure. The operational management of the object, the lead in the project planning and construction, the owner representation as well as the marketing of the project will remain in the responsibility of Flughafen Zürich AG. The joint ownership structure will be established by the beginning of the project realisation. Conditions to realising the project are particularly a sufficient pre-letting rate and a certain investment cost cap after completion of the next planning phase. The final decision regarding the realisation is expected by approximately end of 2014, whereupon the opening would be scheduled in 2018, with some building parts already completed in 2017.
Construction planning and marketing of The Circle are proceeding according to schedule.
With The Circle, a centre for business and lifestyle is being built within walking distance from the terminals. With the Hyatt Group, a management agreement to operate two hotels and a large convention centre has been signed. Next to this, a wide user mix is being developed for innovative brand representation, health, education, culture, entertainment, restaurants and office space. The architecturally striking building complex with international atmosphere comprises an effective area of 180,000 square metres. The investment costs amount to around 1.0 billion Swiss francs.
Securing financing marked an important milestone in reaching one of the project goals of developing The Circle. Until commencement of construction, the focus stays on successfully completing the planning phase and reaching all further conditions for realising the construction work.