Swiss Finance & Property Funds presents annual results of the funds

According to the fund management company, the SF Retail Properties Fund concluded new leases at 15 locations and extended 14 leases with existing tenants by five years in the past financial year. The weighted fixed rental income (WAULT) remains stable at 6.4 years. At the same time, the market value of the properties increased from 706.8 million to 762.2 million as at 31 December 2019. Annual target rental income is 43.8 million. Net income is put at 28.35 million, which corresponds to net income per unit of CHF 4.67. A dividend of CHF 4.35 per unit is to be distributed.

In 2020, the fund plans to launch new construction projects in Reinach, an expansion in Flums and the renovation of properties in Thayngen, Aigle and Marly, among others. One new-build project has already been notarised in December 2019 and will be added to the portfolio in summer 2020, it said. The property offers rental space for retail, a group practice and 13 apartments and is already fully let. Migros has concluded a contract with a fixed term of 15 years as the anchor tenant for the retail space.

According to Swiss Finance & Property Funds, the anchor tenants of the fund portfolio are the large food retailers Coop, Aldi, Lidl and Denner as well as drugstores, pharmacies, bakeries and kiosks with a rental income share of over 60%. These retail outlets will remain open despite the Corona pandemic, and a further 15% of rental income will not be affected by the federal government's closure measures because they are office and commercial premises as well as car parks and apartments respectively. The tenants have excellent credit ratings and the company is convinced that they are not economically at risk due to the current market situation. According to the fund management, there is a constant exchange with the tenants and solutions are being sought in partnership in order to overcome the difficult circumstances.

SF Sustainable Property Fund has expanded its portfolio

The SF Sustainable Property Fund increased its realised income by 12.8% to 25.9 million in the 2019 financial year. The distribution is CHF 3.50 per unit. During the reporting year, 17 properties with a market value of 121.6 million were purchased, bringing the portfolio value to 1.05 billion as of 31 December 2019 (+13.7%, 91 properties). Target rental income increased by 16.7% to 43.7 million during the period, while vacancy decreased by 0.7 percentage points to 7.0%. One property was sold and two properties were renovated. Construction work has started on a new building project in Lausen.

For 2020, the fund management is planning purchases, but also divestments of properties with limited development potential. Increase rental properties. In Aarwangen, the fund has secured a new construction project with three houses. The transfer of ownership and first occupancy are scheduled to take place at the beginning of July 2020. In Pratteln (BL), a residential property is to be renovated. The fund management expects the effects of the Corona crisis to be fewer transaction activities and - if the economic downturn persists - rising vacancy rates, especially outside the conurbations. Rent defaults should be a rarity due to the measures adopted by the federal government, it adds. The SF Sustainable Property Fund has a residential component of 91%, so the risk can be classified as "manageable for the time being". Nevertheless, vacancies are to be actively managed and an exchange with commercial tenants sought.

SF Commercial Properties Fund with 6.6% gross yield

The SF Commercial Properties Fund realised a profit from continuing operations of 10.3 million in the 2019 financial year. The distribution from the result remains stable at CHF 4.25 per unit. The fund continues to hold 19 properties in its portfolio; the market values have been slightly adjusted to 321.1 million. The average gross yield is 6.6%. The vacancy rate increased to 19.8% due to main tenants moving out. In the City Plaza in Dietikon, around 1,7000 sqm were let to the coworking provider Markspace, among others. The average lease term in the portfolio is 6.4 years.

According to the fund management company, the focus for 2020 will remain on letting and tenant retention measures. The aim is to increase the occupancy rate, and selective portfolio restructuring is also planned. As of March 23, 2020, over 90% of the fund's tenants were not directly affected by the Corona pandemic, and none of the ten largest tenants were directly impacted. So far, there have only been a few enquiries from tenants, which are to be resolved in discussions with the asset and portfolio management. (ah)