Specialized properties with long-term, attractive cash flows and returns
The Helvetica Swiss Opportunity Fund (HSO Fund) focuses on special purpose properties that have a good risk/return ratio. In its first extended financial year 2020 (29 November 2019 to 31 December 2020), the fund management company Helvetica Property Investors AG established a portfolio of specialized properties in interesting sectors with a market value of CHF 110.3 million as of 31 December 2020 and this despite the COVID-19 pandemic and the economic weakness that arose as a result.
The portfolio currently comprises a property with school use (Wädenswil/ZH), a pharmaceutical logistics property (Schaffhausen/ZH), a city center property with food sales, department store and restaurant (Sion/VS), a property shell use "Lipo Park" (Schaffhausen/SH) and a commercial property with fruit juice production and other commercial tenants (Rümlang/ZH).
The annual target rental income of these portfolio properties amounts to CHF 6.1 million. The portfolio is characterized by long-term leases with a WAULT of 8.3 years per year-end 2020 and by tenants with a high credit rating. The largest tenant, Manor AG, represents around 35% of the target rental income, followed by the Canton of Zurich with 15%, NextPharma Logistics GmbH with 12%, Lipo Einrichtungsmärkte AG with 11% and Zamba Fruchtsäfte with 7%.
Income statement financial year 2020
In the financial year 2020, the rental income of the portfolio amounted to CHF 5.7 million. It should be noted that the Pharma logistics property was only added to the portfolio per 1 July 2020 and therefore did not yet contribute its full rental income potential in the 2020 reporting year. The occupancy rate as of 31 December 2020 was a very high 99.0%.
The impact of the COVID-19 pandemic on the HSO Fund's rental income amounted to CHF 0.3 million, representing 4.6% of the Fund's target rental income. This concerned mainly larger tenants, with whom, however, amicable solutions were reached.
Net income reached CHF 5.1 million in the financial year 2020. The fund's operating profit margin was 74.2%, and the average interest rate on debt financing was 0.5%. The valuation of the property portfolio by the independent valuation expert Wüest Partner AG resulted in an unrealized gain of CHF 4.5 million. Total income amounted to CHF 8.3 million.
Balance Sheet per 31 December 2020
Total fund assets as of 31 December 2020 amounted to CHF 111.6 million, of which CHF 110.3 million is attributable to properties. The debt financing ratio was 21.3%. The net asset value amounted to CHF 83.9 million as of 31 December 2020. The net asset value per share reached CHF 111.82, which corresponds to an increase in value of 11.8% since the fund's initial issue in November 2019.
CHF 6.00 per share will be distributed in April 2021
The distribution for the financial year 2020 amounts to a total of CHF 4.5 million, with a payout ratio of 87.7%. The distribution per share amounts to CHF 6.00. The ex-date for the distribution is 27 April 2021 and the distribution will be paid out on 29 April 2021.
The HSO Fund has a substantial investment pipeline and the fund management company Helvetica Property Investors AG is convinced of the long-term attractiveness of the Swiss real estate market. Properties with special uses, such as logistics, data centers, specialty markets and industry with long leases in good locations are the focus for the HSO Fund. The fund management company plans another capital increase in the course of 2021 in order to further expand and diversify the portfolio in line with the investment strategy.