Swiss Central City: Fund sells in Geneva
The sale at a discount creates liquidity for unit redemptions. Meanwhile, the fund confirms its rising distribution targets.
The fund management company of the Swiss Central City Real Estate Fund (SIX Swiss Exchange: CITY) has sold the commercially used property at Rue des Deux-Ponts 2-4 in Geneva. The transaction was carried out as part of a «long-term portfolio optimization» and secures «substantial liquidity for the upcoming distribution and the fulfilment of regulatory requirements in connection with redemptions», according to the fund. Proceeds from the sale amounted to CHF 56.3 million. As a result, the leverage ratio could be reduced to a level of around 20% by the end of 2025. However, the sale resulted in a discount, which led to a reduction in the net asset value (NAV) of CHF 2.68 per unit. In the half-year report, the property was listed with a market value of CHF 64.8 million. However, the gross yield improved by around 0.1 percentage points to 3.8% following the transaction. The transfer of ownership will take place in December.
Fee remains reduced in 2027
For the 2025 financial year, the fund management expects an increased distribution in a range of CHF 2.40 to CHF 2.50. The increasing long-term distribution targets communicated to date are confirmed. To further strengthen the long-term earning power, the fund management company has also decided to extend the reduced fee of 0.35% p.a. for the management of the real estate fund, asset management and distribution in 2025 and to retain it for 2027. «The fund is off to a positive start in 2026 and will examine and implement strategic opportunities for Capital Recycling to secure and increase earnings in the coming year and in subsequent years,» the fund also writes. (aw)
