UBS lowers fee of the Residentia fund
The reduction in the Administrative Commission is effective January 2023 and is intended to be in effect for two fiscal years.
UBS Fund Management announces that it will temporarily reduce the effectively applied flat management fee of the Residentia real estate fund by half. The fee will be reduced from 0.72% to 0.36% per annum effective January 1, 2023, and this reduced rate is expected to apply for two fiscal years ending December 31, 2024,UBS says.
UBS justifies the move by saying that the current market environment has seen price declines and increased volatility in listed Swiss real estate funds. The Residentia fund is "trading at a significant discount to its net asset value (NAV)," UBS said. In order to maintain the flexibility of the product and support the return or distribution, it was decided to lower the management commission, it said. This should make it easier for the fund to "master the current challenging market phase".
UBS sees the Ticino real estate market, in which Residentia invests, at a turning point: recently, the supply rate in the rental housing market has fallen, resulting in a tighter supply of housing and lower vacancy rates. As building construction investments have declined, there will be a lower supply of space in both the rental housing and commercial segments in the future. This will be offset by rising demand for rental space, UBS said. (ah)
