UBS postpones capital increase of Sima fund

Originally, the fund management UBS Fund Management wanted to carry out a capital increase for the real estate fund UBS (CH) Property Fund - Swiss Mixed Sima (UBS Sima) at the end of April or beginning of May in the amount of approximately CHF 200 million. As a result of the Covid 19 pandemic, the issue will be postponed until June 2020 and the fund management reserves the right to postpone the issue further depending on further market developments, UBS said.

For the real estate fund, the fund management expects a potential rental loss of around 2% to 4% (ceteris paribus) in the current year due to the Corona crisis. According to the information, about half of the portfolio consists of residential buildings, the rest are commercial and mixed-use properties. A large part of the tenants directly affected by the measures of the Federal Council (about 20%) are large tenants with very good credit ratings. In 2020, a decrease in rents in the range of 10% to 20% compared to the previous year is to be expected in the affected sectors.

The potential loss of rent would be offset by rental income, such as the conclusion of a contract with Implenia at the Ambassador House in Opfikonwhich strengthens the fund's earning power. The debt financing ratio of around 23% is moderate and allows the current construction projects to be completed without any problems. The larger construction projects, in particular Ilot Sud in Morges and Claraturm in Basel, are currently proceeding according to plan.

Residential funds hardly affected, but Swissreal and Direct Urban are

The other funds UBS Anfos, Foncipars and Direct Residential are expected to be only marginally affected by the pandemic as residential real estate funds, fund management added. Although the medium- to long-term economic consequences of the crisis cannot be assessed today, only a marginal impact on the result is expected for the 2019/20 financial year at the current time. At UBS Swissreal, as a direct consequence of Covid-19, a rental loss of around 3% to 6% (ceteris paribus) could be threatened due to the portfolio composition, at Direct Urban, the possible rental loss could be around 1% and 2% (ceteris paribus).

UBS Fondsleitung also reports that it is currently trying to cushion the economic consequences of the Corona crisis. Depending on how the situation is affected, rent deferrals and other measures are being agreed, whereby the recommendations of industry associations such as the Swiss Real Estate Association (VIS) and the requirements of the federal government are being followed. (ah)