SF Sustainable Property Fund – Increased net income and further progress with portfolio optimisation

• Slight appreciation at the half-year stage shows the stability in the portfolio’s value 
• CHF 0.67 million like-for-like increase in rental income (+2.47%) 
• Vacancy rate as at reporting date reduced by another 0.22 percentage points to 4.75% 
• Net income increased to CHF 1.53 per unit (+4.0% year-on-year) 
• Progress with portfolio optimisation following registrations of planned transactions 

Real Estate Portfolio 

The market value of the 107 properties in the SF Sustainable Property Fund totalled CHF 1.45 billion as at 30 June 2024. Like-for-like, the value of the portfolio appreciated slightly by 0.07%. The portfolio's gross yield was 4.08% as at 30 June 2024, while the vacancy rate as at the reporting date declined compared to 31 December 2023 by 0.22 percentage points to 4.75%. 

There were no transactions in the reporting period. The portfolio optimisation measures in the form of exchanges, acquisitions and refurbishment activities for CHF 150 million that were presented at the end of 2023 were registered after the balance sheet date and will in future lead to a further reduction in vacancy rates, improved portfolio quality, rising net income and falling CO₂ emissions. 

Current and Completed Renovation Projects 

The two construction projects at Luzernerring 148 and Rufacherstrasse 8 in Basel (BS) were completed in the first quarter of 2024 and are already at full occupancy again. 

The initial letting of Via Giuseppe Cattori 5 in Locarno (TI) is planned for the fourth quarter of 2024. There is already a great demand. 

The complete renovation in Schlieren started in July 2024 and will be completed by the end of December 2024. Thanks to an excellent marketing campaign, the property will be fully let from 1st January 2025. 

Financial Result 

Total income for the reporting period amounted to CHF 26.0 million (30 June 2023: CHF 26.8 million). Gross rental income decreased by around CHF 0.8 million (-2.8%) due to sales activities in 2023. 

Total expenses were reduced in the reporting period to CHF 13.2 million (30 June 2023: CHF 14.4 million). Net income was up +4.0% to CHF 12.9 million (previous year: CHF 12.4 million), which is equivalent to CHF 1.53 per unit for 8 416 494 units (previous year: CHF 1.47 per unit for 8 416 494 units). 

Net fund assets decreased by CHF 19.8 million in the reporting period to CHF 988.6 million (previous year: CHF 1 008.4 million). This change follows from the fact that total income amounted to CHF 7.1 million and the distribution for the 2023 financial year was CHF 26.9 million. 

Outlook 

In the second half of 2024, SF Sustainable Property Fund will concentrate on increasing the earnings through successful lettings and the further optimisation of the portfolio. The focus is on implementing the registered and planned acquisitions and divestments in order to improve the portfolio’s resilience and further reduce the vacancy rate. 

The construction project on Dornacherstrasse and Laufenstrasse in Basel (BS) to convert some offices into residential units is scheduled to start in the third quarter of 2024. Completion is planned for the first quarter of 2026. The two total renovation projects in Pregassona (TI) and Lugano (TI) are expected to officially start at the end of 2024. 

These projects will have a positive impact of the fund's sustainability profile. A further increase in the share of properties classified as GEAK C and better, as well as a reduction in the use of fossil heating media are expected by the end of the year. More information will be provided when the GRESB results are published in autumn 2024. 

Nicolas Beutler, Portfolio Manager of SF Sustainable Property Fund has decided to accept a new professional challenge outside the real estate sector and will leave Swiss Finance & Property Funds Ltd at the end of the year. The search for a suitable successor is already in progress.