Helvetia (CH) Swiss Property Fund delivers another successful set of results for 2021/22

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.