The SF Commercial Properties Fund can look back on a stable first half of 2023. The past six months saw many successful lettings, leading to a reduction in the vacancy rate to 13.91% as at 30 June 2023.
- Market value of CHF 316.48 million
- Reduced vacancy rate, stronger rental demand
- Stable, long contract terms
- Distribution of CHF 4.25 per unit for 2022 (of which CHF 3.15 was paid out exempt of withholding tax)
In the current market situation, the external valuation reflects higher discount rates. The portfolio’s market value was reduced by CHF 4.78 million or 1.48% and is CHF 316.48 million as at 30 June 2023. The gross yield is 6.28%. The weighted average unexpired lease term (WAULT) was maintained at a high level of 4.93 years.
Real estate portfolio
New contracts and contract renewals were signed for around 5 800 m2 in various properties. Thanks to a rise in demand, some 2 300 m2 have already been let in the property in Dietikon (ZH) in the first half of 2023. The negotiation of the letting of another 2 000 m2 with a major prospective tenant is becoming more concrete.In Staad (SG), several smaller spaces of around 180 m2 have been let. New marketing activities are continuously launched in order to attract further interested parties.
Financial result
The market value of the 17 properties of the SF Commercial Properties Fund totalled CHF 316.48 million as at 30 June 2023. The portfolio property in Weinfelden (TG) was sold, which was valued at CHF 7.10 million as at 31 December 2022. The portfolio's gross yield was 6.28% as at 30 June 2023. The vacancy rate of 13.91% as at 30 June 2023 was down by 0.19 percentage points from 31 December 2022.
Total income for the past reporting period amounted to CHF 8.35 million (previous year: CHF 8.19 million). Rental income increased by CHF 0.16 million (+1.98%).
Expenses totalled CHF 3.79 million (previous year: CHF 3.15 million). The cost increase of CHF 0.64 million is primarily explained by the increase in mortgage interest rates. Net income amounted to CHF 4.56 million (previous year: CHF 5.04 million), which is equivalent to CHF 1.90 per unit for 2 400 000 units (previous year: CHF 2.10 per unit for 2 400 000 units).
Net fund assets decreased by CHF 11.35 million in the reporting period to CHF 220.61 million (previous year: CHF 231.96 million). This change derives from total income of CHF -1.15 million, minus the distribution of CHF 10.20 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. This logical divestment lessened the risk of negative changes affecting the letting situation and reduced the non-value-enhancing investments by around CHF 2.0 million.
Outlook
In addition to the direct involvement of Asset and Portfolio Management in important lease negotiations and construction projects, strategically useful divestments and acquisitions of properties are constantly being assessed in order to optimise the portfolio.
Contact
Portfolio Manager Real Estate Direct
SF Commercial Properties Fund