Annual Report 2023

10 Investment Property

Investment property

In CHF million
	2023	2022
Balance as at 1 January	42 160	41 234
Additions	1 019	1 708
Capitalised subsequent expenditure	219	250
Disposals	–1 212	–1 515
Gains/losses from fair value adjustments	–839	1 047
Transfers from own-use property	–	6
Transfers to inventory property	–	–54
Classification as assets held for sale	–1	–1
Foreign currency translation differences	–635	–516
Balance as at end of period	40 710	42 160
of which pledged as security for mortgage loans	2 488	2 528

Investment property consists of
completed investment property	39 498	40 916
investment property under construction	916	928
right-of-use investment property	296	315
Total investment property	40 710	42 160

Investment property held by the Group includes residential, commercial and mixed-use properties primarily located within Switzerland, and comprises both completed investment property and investment property under construction. Property held for investment purposes comprises land and buildings owned by the Group to earn rentals and/or for capital appreciation. Property that is used by the Group itself or leased to, and occupied by, another entity of the Group is classified as owner-occupied property under property and equipment. Property acquired with a view to its subsequent disposal in the near future is carried under assets held for sale.

Rental income from investment property was CHF 1407 million for the period ended 31 December 2023 (2022: CHF 1391 million). Operating expenses arising from investment property that generated rental income amounted to CHF 301 million for the period ended 31 December 2023 (2022: CHF 306 million).

The undiscounted lease payments to be received under operating leases were as follows.

In CHF million
	31.12.2023	31.12.2022
Less than 1 year	860	842
1 to 2 years	817	799
2 to 3 years	760	750
3 to 4 years	713	685
4 to 5 years	681	634
More than 5 years	2 271	2 477
Total undiscounted lease payments	6 103	6 186