CS real estate funds with improved performance
The investment returns of the Green Property, Hospitality and Living Plus funds are between -0.2 and +1.3%, with two of the funds outperforming the benchmark.
Green Property completes four new-build projects
The Credit Suisse Real Estate Fund Green Property generated a return on investment of 0.6 % in the 2023 financial year (previous year: 5.1 %). The market value of the properties rose from CHF 3.2 billion to CHF 3.3 billion, with the increase being attributable to the realization of new construction projects. The average real discount rate rose from % 2.78 to % 2.89. The rental loss rate remained constant at 3.8 %. In contrast, rental income increased by % 5.9 to CHF 119.5 million, while total expenses rose by CHF 7.4 million to CHF 55.5 million, mainly due to higher mortgage interest. The distribution per unit fell from CHF 3.40 to CHF 3.20. The leverage ratio was 25.5 %. The premium fell slightly from % 2.7 to % 1.4. The performance improved from -27.74 to -1.0 %, but lagged behind the benchmark (SXI Real Estate Funds Broad: 5.0 %).
Over the course of the 2023 financial year, the fund completed the Allverte in Allschwil, the extension to the Lokwerk in Winterthur, the Parco Brentani in Lugano and the Cosmos development in Dübendorf and has already largely handed them over to the tenants. Breitipark in Schaffhausen is already fully let, with the last building due for completion in August 2024. The Tivoli Garten development in Spreitenbach is expected to be completed in spring 2025.
Hospitality fund with performance of 16.1 %
The Credit Suisse Real Estate Fund Hospitality generated a return on investment of -0.2 % in the 2023 financial year (previous year: 6.4 %). The fair value of the properties fell from CHF 862.5 million to CHF 836.0 million due to the sale of five properties and portfolio write-downs. The average real discount rate rose from % 3.07 to % 3.16. The rental loss rate was a low 0.5 % (previous year: 0.2 %). Rental income increased by 3.9% to CHF 32.5 million and total expenses fell - despite higher mortgage interest - by CHF 0.7 million to CHF 9.7 million. The distribution per unit remained constant at CHF 2.50. The leverage ratio amounted to 20.6 %. The fund recovered in the secondary market on the SIX Swiss Exchange, which was reflected in a fall in the discount from -20.5 % in the previous year to -8.0 %. Performance improved from -17.68 to +16.1% and outperformed the benchmark.
The fund has sold five properties in Zermatt. The renovation and conversion of the high-rise building at Schulstrasse 44 in Zurich-Oerlikon is in full swing. When it is completed in summer 2025, the building will comprise a lifestyle hotel under the "Mama Shelter" brand with 174 rooms and 124 new apartments.
LivingPlus lowers vacancy rate to 2.2 %
The Credit Suisse Real Estate Fund LivingPlus achieved a return on investment of 1.3 % in the financial year (previous year: 4.0 %). The market value of the properties fell by a good CHF 18 million to CHF 3.1 billion. The average discount rate rose from 2.98 to 3.05 %, while the rental loss rate fell from 2.6 to 2.2 %. According to the fund management company, this corresponds to the lowest vacancy rate since the fund was launched in December 2007. Rental income increased by 1.7 % to CHF 133.8 million, while total expenses rose by 3.0 million to CHF 59.7 million, mainly due to higher mortgage interest. The distribution per unit remained constant at CHF 3.60. The debt ratio was 21.9 %. The Living Plus premium rose from 20.4 % to 27.9 % over the course of the financial year. The performance improved from -22.77 to +6.9 % and was thus above benchmark.
In the 2023 financial year, new buildings in Bad Zurzach and Lugano Porza were completed and handed over to the tenants - both properties are fully let. A residential construction project in Petit-Lancy with 198 micro-apartments will be completed in spring 2025 and has been let to an operator on a long-term lease. A property in Rorschach was sold. (aw)
