Swisscanto: «Swiss Commercial» increases rental income and net income
The Swisscanto (CH) Real Estate Fund Responsible Swiss Commercial also grew through acquisitions in the 2025 financial year. Vacancy rates were reduced and net income increased significantly.
The fund's rental income rose by 2.2 % year-on-year to CHF 34.26 million. Growth was driven by new lettings in previously vacant properties as well as the property in St. Gallen, which was added in the third quarter. Net income increased significantly from CHF 18.69 million to CHF 21.72 million - reflecting both the growth resulting from the capital increase and lower financing costs. However, another important factor was that the rental loss ratio fell from 5.82 % to 4.57 %. The EBIT margin improved slightly to % 75.04 (previous year: % 74.59) and the net return on finished buildings rose to % 3.95 (previous year: % 3.80).
Total income amounted to CHF 22.99 million (previous year: CHF 19.33 million). This includes unrealized capital gains of CHF 1.46 million (previous year: CHF 0.84 million), which are attributable to a net appreciation of the portfolio of +0.4 %. The average discount rate used by CBRE's valuation experts fell slightly to 3.25 % (previous year: 3.30 %).
Vacancy reduction in several properties
In portfolio management, the focus was once again on several properties with above-average vacancy rates. In Bussigny (VD), the vacancy rate at the property Boulevard de l'Arc-en-ciel 36 fell to 6 % (previous year: 10.7 %) thanks to further new lettings. In Root (LU), Oberfeld 15-17, the vacancy rate was reduced from 15 % to less than 11 %. The property in Renens (VD), Avenue des Baumettes 5/7, remains the largest construction site in the portfolio with a vacancy rate of 22 % (previous year: 24 %) and, according to the outlook, will be a priority in the current financial year.
The vacancy rate in Kirchweg 127, Oberengstringen (ZH), which amounted to 17.51 % at the end of the year (previous year: 4.02 %), is also worth mentioning. Rental agreements with existing tenants were extended early in Neuendorf (SO) and Gravesano (TI), among others. The WAULT remained at a solid level of 4.8 years (previous year: 5.1 years). The largest single tenant in the fund is pharmaceutical supplier Siegfried AG, which accounts for 9.7 % of rental income.
Capital increase and acquisitions
In September, the fund carried out a capital increase of CHF 51.5 million, which was fully subscribed. The proceeds were invested promptly: In the first half of the year, the fund acquired a fully let commercial property at Industriestrasse 2a/2b in Hochdorf (LU) for CHF 10.91 million with a gross yield of 4.9 %. The property from 2016 has a WAULT of over eight years and, according to IB research, comes from the CS 1a Immo PK portfolio. This was followed in the third quarter by the purchase of an office and retail property at Kornhausstrasse 28 in St. Gallen (SG) for CHF 45 million - the property near St. Gallen railroad station, which was renovated in 2015, has an occupancy rate of 98 %.
At the beginning of the year, the property at Eptingerstrasse 51 in Muttenz (BL) was sold for CHF 6.4 million as, according to the fund management, expiring rental agreements and necessary construction investments did not justify its continuation in the portfolio. The resulting realized capital loss amounted to CHF 0.19 million.
Total fund assets rose to CHF 810.1 million and the portfolio value to CHF 794.88 million (previous year: CHF 738.40 million). At the end of the year, the fund was 26.54 % leveraged; the average interest rate on mortgages fell to 1.4 % (previous year: 1.8 %). The overall performance of the fund amounted to 4.14 % (previous year: 7.47 %), which was significantly below the SWIIT total return index, which achieved 10.62 %. «Unfortunately, the operational improvements are not yet reflected in the share price,» said fund manager Patrick Schmid at the presentation of the annual figures. CHF 4.15 per share will again be distributed. The payout ratio fell to 109.34 % (previous year: 115.55 %), but remains above 100 %, as part of the payout is fed from retained earnings, which still amounted to CHF 4.4 million at the end of the year.
Purchases
- Hochdorf (LU), Industriestrasse 2a/2b (commercial) (according to IB research by CS 1a Immo PK).
- St. Gallen (SG), Kornhausstrasse 28 / Neumarkt 5 (office/sales)
Sales
- Muttenz (BL), Eptingerstrasse 51 (aw)
