The SF Commercial Properties Fund can look back on a solid 2023 financial year. Successful lettings and the sale of the property in Dietikon substantially reduced the vacancy rate by 51.1% to 6.9% as at 31 December 2023. Due to sales and a market-related value adjustment, the portfolio’s market value was CHF 279.5 million as at 31 December 2023, which is CHF 48.8 million or 14.9% less than in the previous year. The gross yield is 6.3%. The weighted average unexpired lease term (WAULT) was maintained at a high level of 4.8 years.
- Earnings situation has improved
- Vacancy rate was reduced by half to 6.9%
- Stable letting situation and high WAULT
- Same distribution of CHF 4.25 per unit, of which CHF 3.15 per unit to be paid out exempt of withholding tax
Real Estate Portfolio
In addition to new lets for around 8 840 m2, contract renewals were signed for around 16 750 m2. Important new contracts were in particular concluded for the properties in Dietikon, Castione, Buchs and Möhlin. The most important contract renewal concerned the property in Lyss, for which the general lease with Planzer Transport AG was renewed prematurely until 2030.
Thanks to the new lettings and contract renewals, the weighted average unexpired lease term (WAULT) could be maintained at a high level of 4.8 years (previous year: 5.0 years) as at the reporting date. As no important rental contracts will expire in 2024, the letting situation is likely to remain stable.
Financial Result
The market value of the 16 properties of the SF Commercial Properties Fund totalled CHF 279.5 million (previous year: CHF 328.3 million) as at 31 December 2023. The number of properties was reduced by the sale of two properties in Weinfelden and Dietikon. The portfolio's gross yield was 6.3% as at 31 December 2023. The vacancy rate declined considerably to 6.9% as at 31 December 2023 (previous year: 14.1%).
Total income amounted to CHF 16.8 million (previous year: CHF 16.8 million) in the 2023 financial year. Rental income increased by CHF 0.1 million to CHF 16.7 million (previous year: CHF 16.6 million).
Expenses totalled CHF 6.9 million (previous year: CHF 6.9 million). Net income amounted to CHF 9.9 million (previous year: CHF 9.9 million), equivalent to CHF 4.14 per unit for 2 400 000 units (previous year: CHF 4.12 per unit for 2 400 000 units).
Net fund assets decreased by CHF 20.8 million in the reporting period to CHF 211.2 (previous year: CHF 232.0 million). This change derives from total income of CHF -10.6 million, minus the distribution of CHF 10.2 million paid out for the 2022 financial year.
Sales/divestments
SF Commercial Properties Fund sold the property in Weinfelden above its market value on 1 January 2023. The sale was motivated by changes in the letting potential and the imminent need for investments.
The sale of the property in Dietikon at the end of the year, which placed a disproportionate burden on the portfolio, considerably improved the portfolio’s earnings situation.
Outlook
Even after the substantial reduction of the vacancy rate, the focus continues to fall on further exploiting the potential of the available spaces.
Work is continuing on development projects and a site development designed to exploit the portfolio's potential and create long-term added value.
Together with the optimisation of the portfolio achieved by last year's transactions and the active management of vacancies and costs, this ensures a sustained distribution payout.
Contact
Portfolio Manager Real Estate Direct
SF Commercial Properties Fund
Member of Senior Management
Head Client Relationship Management & Marketing