SF Sustainable Property Fund – Solid result for 2023 in a challenging market environment

• Vacancy rate as at reporting date reduced by another 0.2 percentage points to 5.0% 
• Stable performance for portfolio value with moderate devaluation like-for-like of 2.2% 
• Expected net rents increased by some CHF 1.4 million (+2.4%) 
• Excellent first-time GRESB result with four out of five stars 

Real Estate Portfolio

The market value of the 107 properties in the SF Sustainable Property Fund totalled CHF 1.45 billion as at 31 December 2023. Three properties were sold in Laufen (BL) and one each was sold in Bonaduz (GR), St.Gallen (SG), Bazenheid (SG) and Wetzikon (ZH). 

The portfolio's gross yield was 3.9% as at 31 December 2023. The vacancy rate of 5.0% as at 31 December 2023 was down by 0.2 percentage points from 31 December 2022. 

Renovation projects and sustainability 

The renovation projects for Im First 6/10 in Ehrendingen (AG) and Luzernerring 148 and Rufacherstrasse 8 in Basel (BS) are proceeding within budget and on schedule and will be completed in the first quarter of 2024. 

Work on the energy-related complete refurbishment of Via Giuseppe Cattori 5 in Locarno (TI) started in September 2023 and is expected to be completed in Q3 2024. 

CO2 emissions were reduced year-on-year once again owing to ongoing refurbishment projects carried out in the context of the impact investment approach. The sustainability efforts were rewarded by the excellent first-time GRESB result of four out of five stars. 

Financial Result

Total income for the reporting period amounted to CHF 53.0 million (previous year: CHF 52.6 million). Expected net rents when fully let increased by around CHF 1.4 million (+2.4%). 

Expenses totalled CHF 27.8 million (previous year: CHF 23.9 million). The cost increase of CHF 3.9 million is primarily explained by the increase in mortgage interest rates (+CHF 3.6 million). Net income amounted to CHF 25.3 million (previous year: CHF 28.7 million), which is equivalent to CHF 3.01 per unit for 8 416 494 units (previous year: CHF 3.41 per unit for 8 416 494 units). 

Net fund assets decreased by CHF 41.9 million in the reporting period to CHF 1 008.4 million (previous year: CHF 1 050.3 million). This change follows from the fact that total income amounted to CHF -12.4 million and the distribution for the 2022 financial year was CHF 29.5 million. 

Outlook

Further renovation projects will be carried out in 2024, including the total refurbishment of Rütistrasse 9/11 in Schlieren (ZH) and Dornacherstrasse 270/Laufenstrasse 59 in Basel (BS). Fossil heating media will be replaced by renewable systems such as heat pumps and connection to a district heating network in 2024 too. These measures help to reduce the fund’s CO2 footprint on an ongoing basis. 

We will continue to focus our efforts on constantly optimising the quality of our portfolio in 2024. Various transactions related to this objective are on the point of completion, which will reduce the vacancy rate and sustainably improve the quality. The earning power will also be increased by the rental adjustments following the change to the reference interest rate in December 2023, which will enter into force in April 2024.