For the third financial year, the Helvetia (CH) Swiss Property Fund is again reporting a very encouraging set of results. Underpinned by an increase in net income and a positive change in the value of the property portfolio, total income for 2021/22 came to CHF 22.9 million, representing an investment yield of 4.11%.
The Helvetia (CH) Swiss Property Fund was once again able to demonstrate its strong earnings capacity in the past financial year. Underpinned by solid net income of CHF 17.9 million and unrealized capital gains after liquidation taxes of CHF 4.9 million, total income came to CHF 22.9 million. This represents an investment yield of 4.11%.
The predominant residential share of around 82% of the target rental income once again contributed to the very stable income and value performance. Rental income amounted to CHF 27.4 million (2020/21: CHF 22.2 million). The rent default rate over the twelve months is a low 2.5% and therefore on a par with the previous year (2020/21: 2.5%).
Qualitative growth strategy pays off
The focus of the past financial year was the capital increase completed in spring 2022 for a gross amount of CHF 210 million. In the context of this transaction, ten attractive properties were acquired from the portfolio of Helvetia Insurance, cementing the strategic objectives of growth and diversification for the long term. The market value of the real estate portfolio comprising 39 properties and 1,575 apartments increased by CHF 314.5 million year on year to CHF 862.8 million. The change in market value was driven in part by sustained investor demand for high-quality investment properties with a residential focus, which resulted in a higher valuation from independent property valuer Wüest Partner.
Increase in net asset value and distribution
Last year, the net asset value per unit (before distribution) increased from CHF 103.40 to CHF 103.95. For the current financial year, the Executive Board has set a distribution of CHF 2.75 per unit, meaning that a total of 99.65% of net income is being distributed to investors. Based on the over-the-counter price of CHF 114.00 as of 30 September 2022, the dividend yield is a gratifying 2.40%. The distribution per unit was therefore actually increased year on year after deduction of profit carried forward.
High level of value stability despite the volatile market environment
Listed real estate investments recorded sharp price losses this year due to the prevailing economic uncertainty in combination with rising interest rates. Between 1 October 2021 and 30 September 2022, the Helvetia (CH) Swiss Property Fund likewise reported a negative performance of -2.92% based on the trend in the over-the-counter price. However, this beat the benchmark SXI® Real Estate Funds Broad TR (relevant for listed Swiss real estate funds), which returned a negative performance of -16.08% in the same period.
Outlook for financial year 2023
The fund management company intends to continue expanding the real estate portfolio substantially in the financial year 2023. To this end, a further capital increase is planned for the end of March 2023. The proceeds of the issue will again be used to purchase from Helvetia Insurance's property holdings a broadly diversified real estate portfolio with a high residential component worth around CHF 200 million. This is likely to be the penultimate capital increase before the Helvetia (CH) Swiss Property Fund's listing on SIX Swiss Exchange.
About Helvetia Asset Management AG
Helvetia Asset Management AG is regulated by the Swiss Financial Market Supervisory Authority, FINMA, and provides fund management and asset management services. It offers collective investment schemes and is an independent fund manager operating in the interests of its investors. The company also handles investment advice and asset management, client representation and transaction management for employee benefit institutions, namely for real estate portfolios. Helvetia Asset Management AG has its registered office in Basel, Switzerland, and is a wholly owned subsidiary of Helvetia Holding AG, St. Gallen, Switzerland.
Cautionary note
This document was prepared by Helvetia Asset Management AG and may not be copied, altered, offered, sold or otherwise distributed to any other person by any recipient without the consent of Helvetia Asset Management AG. The German version of this document is decisive and binding. Versions of the document in other languages are made available purely for information purposes. Although all reasonable effort has been made to ensure that the facts stated herein are correct and the opinions contained herein are fair and reasonable, where any information and statistics are quoted from any external source such information or statistics should not be interpreted as having been adopted or endorsed as accurate by Helvetia Asset Management AG. Neither Helvetia Asset Management AG nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this information. The facts and information contained in this document are as up to date as is reasonably possible but may be subject to revision in the future. Neither Helvetia Asset Management AG nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document.
