UBS funds hold their own in the Corona crisis
According to UBS, the real estate funds Foncipars, Sima and Swissreal achieved "very solid annual results" last year despite the pandemic. Distributions remain at the previous year's level.
UBS Foncipars, the residential real estate fund in French-speaking Switzerland, increased the market value of its property portfolio by 7.7% to CHF 1.61 billion in the 2020 financial year. At the end of 2020, the fund held a total of 131 properties in its portfolio: 129 existing properties and two buildings in progress. Rental income increased by 3.1% from 79.0 million to 81.4 million. As only around 2% of the rental income came from the sectors affected by the measures to contain the pandemic, according to UBS the agreed rent reductions had only a marginal impact on the result: they account for around 0.2% points of the rent default rate of 2.4% .
Last year's distribution and the increase in the net asset value per unit by 4.7% from CHF 87.97 to CHF 92.11 resulted in an investment return of 8.2%. With a stock market performance of 21.9%, the Fund also significantly outperformed the market (SXI Real Estate Funds TR 10.8%). As in the previous year, the income distribution was CHF 2.55 gross per unit.
UBS Sima breaks the 10 billion barrier
UBS Sima has increased the value of its real estate portfolio to over CHF 10 billion for the first time in the 2020 financial year. It reached 10.3 billion, an increase of 413 million or 4.2%. The net asset value per unit increased by 2.6% from 95.51 CHF to 98.04 CHF. This results in an investment return of 6.3%. The distribution remains at the previous year's level of CHF 3.25.
Rental income was 398.2m compared to 391.9m in the previous year. The fund management company puts the rent default rate at 6.9% including a Covid 19 effect. Excluding the rent concessions created by the Corona crisis, the rent default rate would be 5.7%. For FY 2021, assuming average rent concessions of one to two months, there could be a potential revenue shortfall of 2-4% (ceteris paribus) as a direct result of Covid-19.
UBS Swissreal share price collapses
The commercial real estate fund Swissreal experienced a price correction in the 2020 financial year due to the Covid 19 pandemic and the associated market uncertainties: Its share price fell from a long-term high of CHF 87.00 per unit in spring 2020 to a low of CHF 64.75 per unit on 18 March 2020 within a very short period of time. It then recovered steadily to reach CHF 75.50 at the end of the financial year, down CHF 5.50 or 6.8% in the period under review. The premium, which is the difference between the market price and the net asset value, fell from 28.5% at the beginning of the year to 20.0% at the end of the year.
At the same time, the fund increased the market value of its properties byTP1T 3.21 to aroundTP2.05 billion. Rental income was 0.4% higher than in the previous year at 99.3 million, with a rental default rate of 5.5%. This resulted in an investment return ofTP4.2% and a distribution return ofTP3.5%. As in the previous year, the distribution amounts to CHF 2.65/unit. The net asset value increased from CHF 62.90/unit to CHF 63.04/unit. (ah)
