Swiss Finance & Property real estate funds present half-year results

The SF Retail Properties Fund signed new leases and renewed existing leases in the first half of 2020, according to a statement from Swiss Finance & Property Funds. The weighted fixed rental income (WAULT) remains at the 6.5-year level.

The market value of the properties - 88 properties in 20 cantons - has increased to CHF763.4 million as of June 30, 2020, an increase of 6.3% compared to the 2019 half-year valuation. Net income for the first half of the year is put at 13.2 million, which corresponds to a net income of CHF2.17 per unit. Total comprehensive income increased by 13.2% to 12.4 million compared to the half-year 2019 valuation.

The anchor tenants in the SF Retail Properties Fund portfolio are large food retailers such as Coop, Aldi, Lidl and Denner, as well as drugstores, pharmacies, bakeries and kiosks. They account for over 60% of rental income - and did not have to close during the lockdown. Another 15% of rental income was not affected by the federal government's closure measures because it is office space, commercial space, parking lots or apartments, for example. By June 30, 2020, agreements had been reached with about 95% of the affected tenants on rent deferrals or rent waivers with simultaneous extensions of contract terms.

SF Sustainable Property Fund makes additional purchases

According to the fund management, the SF Sustainable Property Fund has also hardly been negatively affected by the Corona pandemic. In the first half of 2020, three properties were acquired for the fund, and two additional properties were added after the balance sheet date. Thus, the funds of the capital increase in the amount of 61.9 million could be reinvested within a very short period of time. The acquisitions amount to 77.5 million and are located in the cantons of Berne, Grisons, St. Gallen, Vaud and Zurich. According to the fund management, all properties have a GEAK rating of B or C and thus comply with the fund's sustainability strategy.

In addition, the Via Chiasso 10 property in Biasca (TI) was sold as of January 1, 2020; two further sales in Biasca were made after the balance sheet date. The vacancy rate remains stable at 7.0%. Rental income increased in the first half of the year byTP2T 9.81 toTP2T 20.7 million compared to the previous year, mainly due to the acquisitions.

The Covid-19 impact on the fund has been very small so far due to the high residential component, Swiss Finance & Property Funds said. The risk analysis showed that 1.3% of net rental income was significantly affected by the federal measures. Currently, the fund expects rental income losses of less than 0.5% of net rental income.

In the second half of 2020, the fund intends to further streamline its portfolio. In addition, it intends to push ahead with an overall renovation in the Längi district in Pratteln (BL) in order to be able to start execution in the first half of 2021.

SF Commercial Properties leases 4,000 sqm

SF Commercial Properties Fund leased over 4,000 sqm in the first half of the year, bringing the vacancy rate down to 19.5% (Dec. 31, 2019: 19.8%). The average lease term is 6.0 years. Due to the sale of a property at Erlenweg 3 in Rheinfelden for 3.5 million and a slight correction of 1.7 million caused by Covid-19, the market value of the 18 properties decreased to 316.0 million. The average gross yield was unchanged at 6.6%. Rental income was 7.9 million compared with 8.2 million in the previous year.

According to the fund management, 29 tenants have so far approached the fund's asset management for rent deferrals or temporary rent reductions, and agreements have been concluded with seven of them. Negotiations with the other tenants are ongoing. The Fund has accrued 0.7 million due to the Corona pandemic. As a result, net income decreased to 4.8 million (previous year: 5.2 million).

In the second half of the year, management intends to increase the occupancy rate, especially at City Plaza Dietikon. To this end, further leasing and tenant retention measures are planned. At the same time, the aim is to resolve the outstanding Covid 19 tenant inquiries in partnership. (ah)