SF Commercial Properties Fund – A consistently good 2019 financial year

The SF Commercial Properties Fund can look back on another good financial year in 2019. Realised profit from current operations stood at CHF 10.3 million and the dividend from earnings per share was still CHF 4.25/share. The 19 properties remained constant in 2019. Market values were marginally adjusted to CHF 321.1 million. The average gross yield was 6.6%. The vacancy rate rose in the period to 19.8% due to principal tenants moving out as expected. The average lease term went up to 6.4 years thanks to active management.

Property portfolio

Numerous new tenants were also found in 2019. At City Plaza Dietikon in particular, a new anchor tenant was found in the co-working provider Markspace that signed a 12.5-year lease for 1 700m². The focus was also on managing existing tenants. In this respect, a lease extension until 31 December 2025 was concluded with the tenant Planzer in Lyss. This and other concluded leases helped increase the average lease term by 1 year to 6.4 years.

In 2019, contracts for 4 new photovoltaic units were concluded with an additional income of
CHF 38 000 p.a., which means that 42% of the properties now generate renewable energy. A contract was also concluded to use green electricity that will produce extra cost savings. Borrowings fell to CHF 71.5 million with a current debt financing ratio of 22.3%.

Financial result

Net income generated in 2019 stands at CHF 10.3 million. Together with the balance carried
forward, earnings available for distribution stand at CHF 11.5 million. An amount of CHF 4.25/share will be paid out.

Outlook

The focus continues to be on rental and tenant retention measures in an effort to increase the tenancy rate. There are also plans for selective portfolio reallocation.

On the reference date 23 March 2020, more than 90% of the SF Commercial Properties Fund's tenants had not suffered any direct consequences of the coronavirus pandemic. None of the top 10 tenants has been directly affected. To date, there have been very few enquiries from tenants that need to be resolved in direct talks with Asset and Portfolio Management.