Swisscanto funds increase investment return

Swisscanto (CH) Real Estate Fund Swiss Commercial, which invests in commercial and mixed-use properties in the core/coreplus segment throughout Switzerland, reports total income of CHF16.8 million for the 2019 financial year, up from CHF13.6 million in the previous year. Investment return increased from 3.2% to 3.9, and return on equity increased from 3.1% to 3.8%. At the end of the fiscal year, the net asset value (NAV) per unit was reportedly CHF103.19 (previous year: CHF102.78). The distribution will be increased from CHF 3.50 to CHF 3.70 due to the good result, Swisscanto added.

At the end of the reporting period, the fund portfolio comprised 23 properties with a market value of 601.7 million (previous year: 20 properties, market value 545.8 million). Acquisitions included the fully leased office and retail property Rue de Lausanne 31 in Vevey with a market value of 7.8 million and a gross yield of 5.0%, the office property Via Serafino Balestra 17 in the business center of Lugano (market value 22.1 million, gross yield 4.7%) and the mixed-use property Schaffhauserstrasse 110 in the center of Opfikon (market value 16.0 million, gross yield 4.7%). The fund generated over 90% of its income from commercial rentals, with office and commercial use types dominating with income shares of 38% and 17%, respectively, Swisscanto said.

The current financial year will also be marked by the measures to combat the Corona pandemic, according to the fund management. As of April, a total of around 13% of the fund's annual rental income was directly affected by the Federal Council's measures, although the risk of default is currently considered low for the majority of those affected. Two focal points in leasing management are the subsequent use of the former Stadler premises in Altenrhein and the full letting of a converted property in Baden.

Swisscanto IFCA yields 6.4%

The Swisscanto (CH) Real Estate Fund IFCA, which focuses on residential properties, generated total income of CHF 72.5 million in 2019, compared to CHF 68.3 million in the previous year. The investment return increased from 6.2% to 6.4%. At the end of the financial year, the net asset value (NAV) per unit was CHF 113.80 (previous year: CHF 110.30), according to the fund management company. As in the previous year, the distribution is expected to be CHF 3.30 per unit.

At the end of the financial year, the fund held 127 properties with a market value of 1.66 billion (previous year: 1.55 billion), the majority of which are residential properties in good condition in the medium rental price segment. 90% of the income comes from the residential sectors and the associated parking.

In the first half of 2019, the fund acquired the Winkelriedstrasse 56 property in downtown Lucerne (market value 40.2 million, gross yield 3.2%) and the Badenerstrasse 99-101 property in Schlieren (market value 14.4 million, gross yield 3.3%). In Lachen, the fund is realizing the replacement building project Hintere Bahnhofstrasse 10, which is expected to be ready for occupancy in the second quarter of 2021. The new building comprises four five-story apartment buildings with 62 residential units. In addition, extensive renovation and expansion measures were initiated in properties in Thun, Basel and Zurich. In total, the fund invested around 8.6 million in building fabric maintenance, Swisscanto said (previous year: 8.0 million).

The fund sees itself "only marginally affected" by the effects of the Corona crisis due to its broad regional diversification, its positioning in the mid-range rental price segment and its very low commercial share. However, the development around the Corona virus and its longer-term effects on the residential segment and on the fund in particular would be analyzed continuously and appropriate measures initiated and implemented. (ah)