HSC real estate fund yields 7.6 percent

In its first financial year, Helvetica Swiss Commercial (HSC) acquired ten properties with a total value of CHF 199 million and a gross yield of around six percent. According to the fund management company, the dividend of CHF 3.50/unit corresponds to a distribution yield of 3.3 percent with a payout ratio of 70.3 percent. The return on equity is estimated at 7.6 percent.

According to Helvetica Property Investors, adjusted rental income in the extended financial year from December 9, 2016 to December 31, 2017 amounted to around 8.5 million and adjusted net income to 6.1 million. The fund's operating profit margin is 72.5 percent.

The return on invested capital rose from 4.2% at mid-year to 5.2%. The fund management sees this as a "very pleasing result, considering that the properties only generated income for an average of eight months due to the construction phase".

The occupancy rate of the properties increased from 90.5% as at June to 95.3% as at December 31. The properties were revalued for the second capital increase and the annual financial statements, which led to an overall increase in the value of the portfolio of 0.68% to 199 million.

Total fund assets amounted to 205.9 million as at December 31, 2017, with net fund assets of 132.9 million, which corresponds to a net asset value of 107.57 per unit. The leverage ratio is 31.9%.

The capital increase in December led to an increase in net fund assets of around CHF 65 million. The new funds are to be used for further acquisitions. Two properties costing around 50 million have been acquired in recent weeks. According to the fund management company, further capital increases and a listing are planned by mid-2019.