Helvetica Property Investors buys in St. Gallen
Helvetica Property Investors acquires a property in St. Gallen for its new real estate fund Helvetica Swiss Commercial. The purchase price amounts to CHF 16 million.
The property is in a "well-connected location" in the city of St. Gallen, according to Helvetica Property Investors. The gross yield of the acquisition is 6.2 percent. The property is firmly leased for five years at attractive rents slightly below market to various, in part long-established and local companies. According to the fund management, the rental income for the coming years is largely guaranteed due to the transaction structure. The main tenant also has an option to extend the lease for a further five years after 2021.
"The acquisition in St. Gallen shows that we are able to acquire attractive properties 'off market' even in an extremely challenging market environment," says Frederic Königsegg, CIO and Head Investments. "We are thinking long-term and, in the acquisition in St. Gallen, we placed particular emphasis on the sustainability of earnings as well as on securing existing rents. This transaction is interesting from an operational point of view, as the property is fully leased and the agreed rents are not only secured, but also extremely moderate," adds Hans R. Holdener, CEO and Managing Partner.
HSC plans first capital increase
Helvetica Swiss Commercial (HSC) had already acquired three properties worth around CHF 84 million in the Zurich economic area at the end of 2016. With the purchase in the city of St. Gallen, which has now been notarized, the fund is practically fully invested, according to the fund management. After the new acquisition, the gross yield amounts to a total of 5.8 percent.
According to the information provided, the acquisitions made secure the distributions of the fund already planned for the end of this year. The total rental income budgeted for 2017 now amounts to around CHF 5.8 million. Due to the continued attractive pipeline of investment properties, the fund management is already planning a first capital increase for the coming months.
HSC invests directly and exclusively in real estate assets in German and French-speaking Switzerland. The focus is on economically strong regions and their agglomerations. The investment objective of the fund is to secure an appropriate cash flow return over the long term and at least stable performance. The aim is to achieve a broadly diversified portfolio in terms of regions, types of use, property sizes and tenant mix.
