Credit Suisse: Real estate funds with constant distribution and negative performance
The three Swiss CS real estate funds distribute the same amount for 2022 as in the previous year. While the investment returns range between 4.0 and 6.4%, the price correction for real estate funds has clearly made itself felt in the performance.
CS Real Estate Fund Green Property lowers rent default rate
The weakest performance of the three funds was shown by Credit Suisse Real Estate Fund Green Property, which lagged behind the SXI Real Estate benchmark (-15.2%) with -27.7%. In contrast, the investment return improved from 4.6 to 5.1% year-on-year. The fair value of the properties increased from CHF 3.05 billion to CHF 3.24 billion due to new construction projects and portfolio upgrades. The average discount rate decreased from 2.9% to 2.8%. The rent default rate decreased to 3.8% (previous year: 4.4%). The distribution per unit remains constant at CHF 3.40.
CS REF Green Property acquired a commercial building in Schlieren as part of a roundup in the 2022 financial year. According to the fund management, the projects Parco Brentani in Lugano, Allverte in Allschwil, Breitipark in Schaffhausen, the addition to the Lokwerk in Winterthur and Cosmos in Dübendorf are proceeding as planned and will be completed this year. The Tivoli Garten development in Spreitenbach is expected to start generating income in mid-2024. The fund has sold a commercial property in Arbon.
CS Real Estate Fund Hospitality increases investment return from 4.3 to 6.4%
The hotel fund CS REF Hospitality increased its investment return from 4.3 to 6.4% last year. The fair value of the properties increased from CHF 775.5 million to CHF 862.5 million as a result of the purchase of three properties and portfolio revaluations. The average discount rate decreased from 3.2 to 3.1%. The rent default rate decreased to 0.2% (previous year: 1.3%). The distribution per unit remains constant at CHF 2.50. With the performance of -17.7% the fund remained only slightly below benchmark.
CS REF Hospitality has acquired one property each in Lausanne, Chur and Carouge in fiscal year 2022. The renovation and conversion of the high-rise building at Schulstrasse 44 in Zurich-Oerlikon is underway, according to CS. When completed in the fall of 2024, the building will include a lifestyle hotel under the "Mama Shelter" brand with 174 rooms and a new 124 apartments.
CS Real Estate Fund Living Plus with lowest vacancy rate since launch
The residential fund CS REF Living Plus also posted a negative performance of -22.8%, underperforming the benchmark. It was also the only one of the three funds to show a lower investment return. It decreased from 5.7 to 4.0%. The fair value of the properties increased from CHF 3.02 billion to CHF 3.12 billion, while the average discount rate decreased from 3.1 to 3.0%. The rent default rate decreased significantly from 4.4 to 2.6%. This corresponds to the lowest vacancy level since the launch of the fund in December 2007. The distribution per unit remains constant at CHF 3.60.
In fiscal year 2022, the fund acquired a residential project in Petit-Lancy. With this and another project in Bad Zurzach and Lugano, there are currently three new construction projects in the fund portfolio. According to the fund management, two properties in Diessenhofen and Niederrohrdorf were sold at "significantly above market values". (aw)
