Swiss Prime Site Solutions Investment Fund Commercial achieves strong cash flow yield in first half of 2023/2024

Swiss Prime Site Solutions / Key word(s): Half Year Results/Real Estate Swiss Prime Site Solutions Investment Fund Commercial achieves strong cash flow yield in first half of 2023/2024 22.05.2024 / 10:00 CET/CEST Press Release

The Swiss Prime Site Solutions Investment Fund Commercial («SPSS IFC») achieved a cash flow yield of 2.75% in the first half of the 2023/2024 reporting period. The fund has thereby comfortably exceeded the target range of 1.75%–2.0% after six months. The high cash flow yield corresponds to earnings per share of CHF 2.74, which means more than 60% of the target dividend per share has already been reached at the halfway point of the year.

Relative outperformance of +12.77% versus SWIIT since launch
In a challenging market environment, the SPSS IFC has achieved a total return of +7.24% in the period from its launch on 17 December 2021 up to 31 March 2024. This represents a relative outperformance of +12.77% versus the SXI Real Estate Funds Total Return Index (SWIIT), which was down by 5.53% in the same period.

Low vacancy rate and increase in net revenue
The fund’s strong asset management is reflected in the vacancy costs. Vacancies, which had increased due to acquisitions, were almost halved in the past 12 months. As a result, the vacancy costs of the fund are currently very low at 1.7% (H1 2022/2023: 3.2%). Among other achievements, the «Centro Lugano Sud» property was fully let as of the balance sheet date for the semi-annual report. The rent default rate was further reduced to 1.6% (H1 2022/2023: 3.7%) and thus remains low.

Net revenue up by 2% and WAULT stabilised at a high level
Net revenue increased by 2% compared with the first half of 2022/2023. Among other things, this was due to the high indexing rate of ~95% and the further reduction in vacancies. The low vacancy costs made a significant contribution to a high EBIT margin of 86% at property level. The weighted average unexpired lease term (WAULT) stabilised in the first six months and stood at 5.5 years on the balance sheet date.