CS REF Hospitality: Rental income and portfolio value decline
Credit Suisse Real Estate Fund Hospitality (CS REF Hospitality) is feeling the effects of the Covid 19 pandemic. As a result of the lockdown, it recorded lower rental income and the fair values of its properties declined.
Since CS REF Hospitality's rental income comes primarily from the hotels/restaurants and campuses/schools sectors, the lockdown has impacted earnings, Credit Suisse Asset Management says. At the same time, the low
occupancy of hotels led to a high demand for rent deferrals and waivers. These reportedly amount to 19.6% of annual net target rent as of June 15, 2020.
In view of the reduced earnings, the distribution for fiscal 2020 will be lower than in the previous year. An amount per unit of between CHF 2.50 and CHF 2.80 is expected - in the previous year, it was CHF 3.40 per unit.
Furthermore, Credit Suisse Asset Management announces that with the preparation of the semi-annual report for the fund, all properties in the
portfolio was revalued. Compared to the annual financial statements as of December 31, 2019, the fair value had decreased by approximately 2.5%, in particular due to increased discount rates for hotel properties and due to lower rental income in some cases. The unaudited half-year report will be published at the end of August.
Sale of hotel portfolio completed
The sale of a hotel portfolio in alpine regions to the Aevis Victoria subsidiary Swiss Hotel Properties AG (formerly Swiss Hospitality Properties AG) announced in 2019 has now been completedThe transfers of ownership have taken place. However, it has been agreed that the Swiss Holiday Park in Morschach will remain in the portfolio of CS REF Hospitality, according to the fund management.
Accordingly, six properties were sold: the Hotel Intercontinental (without residences) at Baslerstrasse 9 in Davos Dorf, the Welcome Hotel with the staff houses A and B on Kantonsstrasse in Täsch, and in Zermatt the Fund is parting with the Hotel Le Mont Cervin Palace at Bahnhofstrasse 31, Le Petit Cervin at Hofmattstrasse 12 and Villa Margherita at Bahnhofstrasse 29. Furthermore, the Seilerhaus sites D and E at Bahnhofstrasse 50, 52 in Zermatt will be sold to the Aevis Victoria subsidiary.
A partial repayment of CHF 10.00 per unit will be made from the proceeds of the sale, the fund management announces. (ah)
