SF Urban Properties : February 2023

28 February 2023

SF Urban Properties Ltd

Share Price CHF 90.00

Description

SF Urban Properties Ltd (SFUP) is a Swiss real estate company based in Zurich. It is engaged in the development and management of an existing real estate portfolio and in the acquisition of new properties. SFUP invests in commercial, residential and development properties as part of its ac- tivities. The company's geographic investment focus is on the cities of Zurich and Basel. As such, the company gears its strategy to economic areas and locations that offer more potential than others through demo- graphic, legal or economic framework conditions or changes.

In making its investments, the company focuses on investing in Swiss real estate that generates strong cash flow over the long term or demonstrates unrealised value potential that can be exploited to generate income through active management, such as through conversion, reno- vations, expansion projects or development projects.

Company Data

Company	SF Urban Properties Ltd
Legal form	Swiss Corporation (AG)
CEO	Bruno Kurz
CFO	Reto Schnabel
Asset manager	Swiss Finance & Property Funds Ltd
Benchmark	REAL Index
Management fee	0.75% (NAV); 0.5% > 250 Mio.
Auditors	PricewaterhouseCoopers
SIX Swiss Exchange listing	17 April 2012
Portfolio value	CHF 754.5 mn (as at 31 December 2022)
investment properties
Security number	3281613
ISIN number	CH0032816131
Bloomberg code	SFPN SW Equity
Distribution for 2022	CHF 3.60
Distribution yield as at 31 December	4.0%
2022

Performance (reset on base 100)

Cumulative performance (in %)

	YTD	1 mt	3 mts	1 year	3 years	5 years	Since
							Inception
SFUP	1.12%	-1.64%	1.69%	-6.94%	-2.72%	12.38%	100.45%
Benchmark	-0.61%	-3.03%	2.01%	-10.62%	-15.85%	20.95%	159.97%

Key Financial Figures (as at 31 December 2022)

Income statement	Unit	1 Jan. -	1 Jan. -
		31 Dec. 2022	31 Dec. 2021
Property earnings	CHF 1 000	28	390	27	123
Total operating income before	CHF 1 000	63	987	49	683
revaluation
Revaluation of investment properties	CHF 1 000	15	236	36	755
Operating result (EBIT)	CHF 1 000	41	322	57	800
EBIT margin	%	52.29	66.87
Net profit	CHF 1 000	28	490	41	887
Net income attributable to share-	CHF 1 000	26	814	40	534
holders of SF Urban Properties Ltd
Net income attributable to share-	CHF 1 000	14	718	11	123
holders of SF Urban Properties Ltd
excluding revaluation effects 1
Balance sheet	Unit	31 Dec. 2022	31 Dec. 2021
Total assets	CHF 1 000	861	380	793	664
Equity capital	CHF 1 000	406	420	364	511
Equity ratio	%	47.18	45.93
Financial liabilities	CHF 1 000	358	183	327	475
Borrowing ratio	%	41.58	41.26
Outside capital	CHF 1 000	454	960	429	153
Debt financing ratio	%	52.82	54.07
Third-partyloan-to-value ratio of	%	44.60	44.00
the properties 2
Return on equity 3	%		6.96	12.11
Return on equity excluding	%		3.82		3.22
revaluation effects 1
Key Figures per Share	Unit	31 Dec. 2022	31 Dec. 2021
Net Asset value (NAV) per share	CHF	24.07	21.67
of CHF 1.80
Net Asset Value (NAV) per share	CHF	120.36	108.36
of CHF 9.00
Net Asset Value (NAV) per share	CHF	27.46	24.30
of CHF 1.80 before deferred taxes
Net Asset Value (NAV) per share	CHF	137.32	121.51
of CHF 9.00 before deferred taxes
Share price	CHF	89.00	101.00
Premium (+) and discount (-) on NAV	%	-26.06	-6.79
	Unit	1 Jan. -	1 Jan. -
		31 Dec. 2022	31 Dec. 2021
Earnings per share (EPS) of CHF 1.80	in CHF		1.60		2.42
nominal
Earnings per share (EPS) of CHF 9.00	in CHF		8.00	12.09
nominal
Earnings per share (EPS) of CHF 1.80	in CHF		0.88		0.66
nominal excluding revaluation 1
Earnings per share (EPS) of CHF 9.00	in CHF		4.39		3.32
nominal excluding revaluation 1

1 Revaluation effects: revaluations as well as their tax effects

2 Interest bearing debt in relation to properties including developments dedicated to be sold 3 Profit in relation to average equity

SF Urban Properties Ltd

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28 February 2023

SF Urban Properties Ltd

Share Price CHF 90.00

Portfolio data	Unit	31 Dec. 2022	31 Dec. 2021
Number of investment properties	Quantity	48	47
Number of development properties	Quantity	6	5
Investment properties incl. building rights	CHF 1 000	757 600	721 518
Development properties	CHF 1 000	44 092	31 397
Gross yield 4	%	3.94	4.00
Weighted real discount rate of portfolio valuation	%	2.70	2.79
Weighted nominal discount rate of portfolio valuation	%	3.72	3.30
Vacancy rate end of period	%	1.51	2.60
Average interest rate (including swaps) of financial liabilities	%	2.01	1.35
Average fixed interest rate	Years	6.8	7.7

4 Gross profit yield equals targeted rental income at a specific date as a percentage of market value (fair value)

5 Vacancy rate corresponds to vacancy excluding inconsistencies, rent reductions and discounts / target net rental when fully let

Market values by region (as at 31 December 2022)

Target net rental earnings by use (as at 31 December 2022)

Quality of property and location (as at 31 December 2022)

SF Urban Properties Ltd

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SF Urban Properties Ltd

Share Price CHF 90.00

Review

A market environment shaped by uncertainties defined 2022. SF Urban Properties Ltd (SFUP) was able to post a positive annual result on the strength of its robust portfolio of properties in selected good locations and the very focused work done by its management team.

The vacancy rate as at 31 December 2022 was 1.5%, which is at a new record low. The operating costs and the contribution of the reference projects to the result developed favourably and according to plan.

In the first half of 2022, the company acquired the investment property Binningerstrasse 5, Innere Margarethenstrasse 2 in Basel. The company also invested in three new development projects: Alte Landstrasse 26 in Rüschlikon, Seefeldstrasse 186 in Zurich and Ruchenacher 17 in Zumikon.

While the value of the portfolio increased substantially in the first half as a result of revaluations, the interest rate reversal in the second half resulted in only very marginal appreciation as expected. The value of the portfolio of investment properties was CHF 754.5 million as at 31 December 2022.

With regard to the targets that were defined for the CO2 reduction meas- ures, the company prepared a materiality matrix to support the review and substantiation of the implementing measures. This matrix weights various sustainability aspects of the ESG approach and defines and formulates the prioritised topics as sustainability targets.

28 February 2023

Outlook

The year 2023 will continue to be dominated by the uncertain market environment. Management, however, remains confident about the expected course of business in 2023.

We generally expect demand for investment properties to remain constant and believe that investment properties with a stable return on cash flow will remain an interesting investment.

In 2023, the company will opportunistically investigate possible purchases of investment properties in the cities of Zurich and Basel and focus on properties that can be developed as reference projects. Sales of individual properties that do not suit the defined portfolio strategy or have no recognisable long-term potential may be considered.

The company is positive about the earnings situation in 2023. SFUP will continue to actively manage all vacancies in order to keep the vacancy rate low. The lease agreements for our commercial properties, which account for some 70% of our real estate earnings, contain indexation clauses as a hedge for inflation. We expect an increase in real estate earnings of around 1.9% from this share of the lease agreements in 2023.

The planned renovations and conversions of selected properties will continue in 2023 and the reference properties are expected to have a very positive impact on the operating result.

The company has defined its sustainability targets and formulated specific measures in awareness of the challenges arising from the urban locations of the properties. In 2023, the company will focus, among other things, on the installation of the first photovoltaic systems at Klausstrasse 4 and Witikonerstrasse 15 in Zurich and the submission of the GRESB (Global Real Estate Sustainability Benchmark) report.

Top Properties from the Portfolio

«Haus zum Tanz», Basle

Zeltweg 67, Zurich

Witikonerstrasse 15, Zurich

Steinenvorstadt 67, Basle

Schaffhauserstrasse 6, Zurich

Klausstrasse 4, Zurich

SF Urban Properties Ltd

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28 February 2023

Head Client Relationship Management & Marketing

Urs Kunz | Seefeldstrasse 275 | 8008 Zurich | [e-mail] | [phone] | www.sfp.ch

Disclaimer

This document is intended for use solely by the person to whom it is conveyed on a confidential basis. By accepting and retaining this material and the information therein, which is intended for marketing purposes, the recipients confirm and agree to uphold the confidentiality of this document. The recipient is not authorised to transmit this document to third parties. This material may not be duplicated or copied, in whole or in part, for any purpose without the written prior consent of Swiss Finance & Property Funds Ltd and Swiss Finance & Property Ltd ("Swiss Finance & Property"). This document constitutes neither an offer nor a recommendation to buy or sell securities or instruments and should not be interpreted as investment advice or any other type of decision-making tool or suggestion with regard to legal, tax-related or other matters. Neither the present document nor copies thereof may be sent, taken or distributed to the United States of America, or given to US persons (within the meaning of Regulation S of the US Securities Act of 1933 in its current valid version). Past performance is neither a guarantee nor an indicator of current or future performance or returns. The performance does not take into account any commissions and costs for issue or redemption of fund units. The prospectus, the Key Information Document (PRIIPS-KID) as well as the annual and semi-annual reports can be obtained free of charge from Swiss Finance & Property Funds Ltd.

SF Urban Properties Ltd

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