The SF Retail Properties Fund was very successful in the first half of 2018. More than one-third of current rental contracts have been renewed or extended in the past twelve months. The weighted average unexpired lease term (WAULT) rose to a peak of 7.0 years. At the same time, the market value of the properties increased to CHF 682.3 million as at 30 June 2018 (31/12/2017: CHF 596.4 million). The annual target rental could be increased to CHF 40.09 million. At 2.46%, the return on investment was up by 0.36 percentage points relative to 30 June 2017.
Real estate portfolio
The capital raised with the capital increase in May 2018 was invested in full by the end of the first half of 2018. On the reporting date, the portfolio comprised 83 properties in 19 cantons. The market value of the portfolio improved by 14.40% in the first half of 2018 compared to the end of 2017. Compared to 30 June 2017, the WAULT increased by 1.1 year to 7.0 years. This increase is due to the signing of new rental contracts with fixed terms of up to ten years as well as early extensions of contracts with current tenants by up to 17 years. A tenant was found for the last free rentable floor space in Grütpark Regensdorf, meaning that this property is fully tenanted just nine months after its acquisition.
Financial result as at 30 June 2018
The increase in rental income by CHF 5.45 million (+44.05%) is chiefly due to the acquisition of new properties. The level of the rents agreed for rental contract extensions and re-lettings is sufficient to ensure a sustainable income. Net fund assets rose by CHF 41.54 million to CHF 559.23 million. This value was affected by the net inflow of funds of CHF 50.14 million from the capital increase, the total income earned in the first half of 2018 of CHF 12.92 million and the distribution of CHF -21.52 million in March 2018.
Outlook
The reduction of free rentable floor space and the optimisation of current contracts will remain focal topics in the second half of 2018. The fund management regularly reconciles this with the most important tenants while involving local partners in the process. Other central tasks include continuing the development and renovation projects and reviewing acquisition options. One property in Sant'Antonino was already purchased after the reporting date and will be integrated into the portfolio in the coming weeks.