CS REF International: Real estate values remain stable
The fair value of the properties of Credit Suisse Real Estate Fund International remained almost unchanged in local currency terms in the 2020 financial year. However, there was a decline due to the strong Swiss franc.
According to Credit Suisse Asset Management, the market value of all properties in CS REF International was around CHF 4.03 billion as of December 31, 2020 (previous year: CHF 4.34 billion). While the property values in local currency were almost unchanged, the fair value had decreased due to the strong Swiss franc. 95% of the currencies in the statement of assets are hedged using forward exchange transactions in order to mitigate currency fluctuation risks.
In the past year, the fund has further optimized its portfolio, according to Credit Suisse. In Krakow, Poland, the recently completed and fully let High5ive development, which is located around 500 meters from the main railway station, was acquired. The new Jubilee Place development in Brisbane, Australia, is well advanced and will be completed in the current financial year, it added. Five properties no longer in line with the strategy in the Netherlands, Ireland, Australia and Japan (2) were sold.
Due to reduced vacancies, the rent default rate fell from 8.0% to 6.0% in the 2020 financial year. Rental income increased from CHF 224.1m to CHF 227.5m. The Covid 19 pandemic reportedly resulted in a 0.2% reduction in rental income.
The distribution will be reduced to CHF 40.00 per unit and the distribution yield will be 3.9% (previous year: 3.5%).
In secondary market trading, the premium continued to decline and stood at -3.2% as of December 31, 2020 (previous year: 7.0 %). The fund management company is constantly reviewing whether the positioning of the fund in terms of the OTC tradability offered meets current client needs, Credit Suisse said. (ah)
