Rothschild fund Erres: issue in prospect

Edmond de Rothschild Real Estate SICAV - Swiss intends to use the CHF 279.7 million in new funds to finance new acquisitions, continue ongoing development and renovation projects, and maintain leverage within the strategic limit.

The subscription period runs from 30 August to 10 September 2021, with payment scheduled for 23 September. The subscription ratio has been set at 1:5, i.e. for five existing fund units, one new unit can be subscribed at the issue price of CHF 122.08. Placement agent in the transaction is Swiss Finance & Property AG.

Launched in 2011, Erres invests throughout Switzerland, although its geographical and strategic focus is on French-speaking Switzerland. Properties in the cantons of Geneva and Vaud together represent 73% of the portfolio's value. The residential portion of the fund has been increased in recent years and currently stands at a good two-thirds. The remaining third is distributed among properties used for office, retail, restaurants, food retail and commercial purposes.)

According to the 2020/21 annual report (reporting date: 31 March 2021), the fund has total gross assets of almost CHF 2bn. The market capitalization as of the end of June 2021 was 2.02 billion with a premium of 45%. Ebit margin in the 2020/21 financial year was 73%, with a rental default rate of 3.33% (excluding Covid 19-related cases: 2.88%). The investment return for the financial year was 5.83%. The dividend paid was CHF 3.60 per unit with a payout ratio of 95.49%, representing a dividend yield of 2.04% on the market price as at 30 June 2021. (ah)