Swiss Central City closes the first half of 2023 in the red
Despite operational successes, the Swiss Central City Real Estate Fund was unable to decouple itself from the market trend. A revaluation loss depressed the overall result to CHF -3.1 million.
The Swiss Central City Real Estate Fund can report a significant increase in rental income for the first half of the year. It increased by 17% to CHF 9.7 million compared to the same period of the previous year (previous year: CHF 8.3 million). The acquisitions made in the previous year had a positive impact, according to the fund: Properties at Rue des Deux-Ponts 2-4 and Rue Tronchin 12 in Geneva and the properties at Haltingerstrasse 63, Haltingerstrasse 102 and Kirchgasse 4 in Basel were acquired. The rental loss rate (excl. projects) at the end of June was 4.80%, slightly above the figure at the end of 2022 (4.7%).
The fund's net income amounted to CHF 4.2 million (previous year: CHF 5.3 million). The valuation of the portfolio led to an unrealized valuation result of CHF -8.9 million, following an appreciation of CHF 4.4 million in the previous year. The overall result for the first half of the year was therefore CHF -3.1 million. The fund made a profit of CHF 7.3 million in the first half of 2022.
Supported by investments in existing properties and construction projects, the market value of the real estate portfolio was CHF 609.6 million as at June 30, 2023 (end of 2022: CHF 614.8 million). The net asset value per fund unit was CHF 107.67 after CHF 110.99 at the end of 2022.
Target rental income climbs by seven percent
The Swiss Central City Real Estate Fund completed two residential construction projects in St. Gallen (Lindenstrasse 135) and Zurich (Luisenstrasse 40) during the reporting period. The property in Zurich has been fully let since April 1 and tenants had been found for 24 of the 28 apartments in the property in St. Gallen by the balance sheet date of June 30.
The property at Rue du Vélodrome 5A in Geneva is fully let again as of October 1: A physiotherapy center has rented an area of 370 sqm for a term of 15 years (early break in 2033).
At Clara Shopping in Basel (Greifenstrasse 36, 38 / Rebgasse 6), an existing contract with the fashion chain H&M Hennes & Mauritz AG for 2,100 square meters of retail space was extended by five years until 2029.
Annualized, the target rental income from investment properties increased by 7% to CHF 20.8 million. The share of rental income from residential use amounted to 52%.
The Swiss Central City Real Estate Fund remains cautious about the outlook for the second half of the year: the current economic situation and risks make a short-term outlook challenging, the fund writes in a press release, referring to inflation, possible further interest rate hikes and the war in Ukraine. The aim is to further optimize the property portfolio with an active portfolio management approach. (ah)
