SF Urban Properties : May 2022

31 May 2022

SF Urban Properties Ltd

Share Price CHF 97.50

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 activities. 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 demographic, 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, renovations, 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 718.2 mn (as at 31 December 2021)
investment properties
Security number	3281613
ISIN number	CH0032816131
Bloomberg code	SFPN SW Equity
Distribution for 2021	CHF 3.60
Distribution yield as at 31 December	3.6%
2021

Performance (reset on base 100)

Cumulative performance (in %)

	YTD	1 mt	3 mts	1 year	3 years	5 years	Since
							Inception
SFUP	-0.19%	-4.41%	0.81%	1.32%	20.60%	18.00%	101.93%
Benchmark	1.89%	-3.22%	0.72%	2.07%	22.70%	31.41%	149.65%

Key Financial Figures (as at 31 December 2021)

Income statement	Unit	1 Jan. - 31	1 Jan. - 31
		Dec. 2021	Dec. 2020
Property earnings	CHF 1 000	27	123	26	499
Total operating income before	CHF 1 000	49	683	44	738
revaluation
Revaluation of investment properties	CHF 1 000	36	755	3	260
Operating result (EBIT)	CHF 1 000	57	800	31	954
EBIT margin	%	66.87	66.57
Net profit	CHF 1 000	41	887	22	834
Net income attributable to shareholders	CHF 1 000	40	534	22	966
of SF Urban Properties Ltd
Net income attributable to shareholders	CHF 1 000	13	511	23	926
of SF Urban Properties Ltd
excluding revaluation effects 1
Balance sheet	Unit 31 Dec. 2021 31 Dec. 2020
Total assets	CHF 1 000	793	664	704	674
Equity capital	CHF 1 000	364	511	327	386
Equity ratio	%	45.93	46.46
Financial liabilities	CHF 1 000	327	475	279	608
Debt financing ratio	%	41.26	39.66
Outside capital	CHF 1 000	429	153	377	289
Debt financing ratio	%	54.07	53.54
Third-partyloan-to-value ratio of the	%	44.00	43.10
properties 2
Return on equity 3	%	12.11		7.06
Return on equity excluding revaluation	%		3.91		7.40
effects 1
Key Figures per Share	Unit 31 Dec. 2021 31 Dec. 2020
Net Asset value (NAV) per share of	CHF	21.67	19.54
CHF 1.80
Net Asset Value (NAV) per share of	CHF	108.36	97.69
CHF 9.00
Net Asset Value (NAV) per share of	CHF	24.30	21.79
CHF 1.80 before deferred taxes
Net Asset Value (NAV) per share of	CHF	121.51	108.94
CHF 9.00 before deferred taxes
Share price	CHF	101.00	97.00
Premium (+) and discount (-) on NAV	%	-6.79	-0.70
	Unit	1 Jan. - 31	1 Jan. - 31
		Dec. 2021	Dec. 2020
Earnings per share (EPS) of CHF 1.80	in CHF		2.42		1.37
nominal including revaluation
Earnings per share (EPS) of CHF 9.00	in CHF	12.09		6.85
nominal including revaluation
Earnings per share (EPS) of CHF 1.80	in CHF		0.81		1.43
nominal excluding revaluation 1
Earnings per share (EPS) of CHF 9.00	in CHF		4.03		7.14
nominal excluding revaluation 1

1 Revaluation effects: revaluations as well as their tax effects and further 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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31 May 2022

SF Urban Properties Ltd

Share Price CHF 97.50

Portfolio data	Unit	31 Dec. 2021	31 Dec. 2020
Number of investment properties	Quantity	47	43
Number of development properties	Quantity	5	4
Investment properties incl. building rights	CHF 1 000	721 518	641 813
Development properties	CHF 1 000	31 397	30 154
Gross yield 4	%	4.00	4.40
Weighted real discount rate of portfolio valuation	%	2.79	2.99
Weighted nominal discount rate of portfolio valuation	%	3.30	3.51
Vacancy rate end of period	%	2.60	2.62
Current vacancies Reporting period 5	%	2.51	2.68
Average interest rate (excluding swaps) of financial liabilities	%	0.55	0.56
Average interest rate (including swaps) of financial liabilities	%	1.35	1.62
Average fixed interest rate	Years	7.7	8.0

4 Gross profit yield equals targeted rental income 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 2021)

Target net rental earnings by use (as at 31 December 2021)

Quality of property and location (as at 31 December 2021)

SF Urban Properties Ltd

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31 May 2022

SF Urban Properties Ltd

Share Price CHF 97.50

Review

SF Urban Properties Ltd can look back on another good financial year in 2021.

The strategy of focusing on central locations in Zurich and Basle continued to pay off in the 2021 financial year. In the reporting year, the company acquired

properties at Tramstrasse 53 in Münchenstein for CHF 1.3 million, Riehentorstrasse 28 / Kirchgasse 2-2A in Basle for CHF 18.0 million and Hegenheimerstrasse 62 in Basel for CHF 9.2 million. There was also a consolidation at Binningerstrasse 7 in Basle for CHF 11.3 million.

The company supported tenants affected by official closures in the form of deferrals as well as rent reductions in some cases. Among other things, the municipal and cantonal "three thirds" rescue packages offered in Basle and Zurich were supported. The rent reductions effectively granted and recognised in the income statement since the start of the pandemic in March 2020 amounted to CHF 1.4 million in total as of 31 December 2021, with the first lockdown accounting for CHF 0.5 million and the second CHF 0.9 million.

Despite the pandemic, the company was once again able to keep the vacancy rate stable at 2.6% as of the balance sheet date of 30 December 2021. Important milestones for ongoing development projects were achieved. The milestone of "building envelope sealed" was achieved for the development projects at Sandreuterweg 39 in Riehen and Klusstrasse 38 in Zurich, and

finishing work began. Marketing of the new construction project at Elsässerstrasse 1 + 3 in Basle started in the fourth quarter following the granting of a legally effective building permit. Demand for the residential units was strong, and eight units were reserved within a few weeks. In the fourth quarter the municipal authorities issued a positive ruling under planning and building law for the development project at Fuederholzstrasse 8 in Herrliberg, and the ruling is expected to enter into force around the turn of the year. A positive preliminary ruling with respect to development was achieved in the fourth quarter for the development project at Minervastrasse 124, and the planning application will be submitted in January 2022.

demand. Commercial spaces, and hospitality and retail spaces in particular, are likely to continue to prove difficult to let out.

Net migration to Switzerland is still positive, and SF Urban Properties Ltd expects this to continue to benefit the housing market. The company also expects overall demand for office space, and contemporary attractive spaces in central locations in particular, to improve. These factors give the company grounds for optimism with regard to 2022.

The vacancy rate of 2.6% as of 31 December 2021, which is still low in comparison with the rest of the market, is emblematic of SF Urban Properties Ltd's portfolio. Keeping the vacancy rate low is one of the company's main aims as its acts as a basis for securing income over the long term.

Work will continue on schedule on the renovation and conversion of selected properties in 2022 as part of the developed property strategies.

The continuation of project developments will lead to more key milestones in 2022. The completion of construction work and occupation of the new construction projects at Sandreuterweg 39 in Riehen and Klusstrasse 38 in Zurich are scheduled for summer 2022. After a successful start to marketing of the new-build project at Elsässerstrasse 1+3, 50% of the units had been reserved by the end of 2021. Building work commenced in May 2022. It is assumed that the previous successful marketing activities can be continued and all units will be either reserved in the first half of the year or purchase

contracts registered. Marketing of the development project at Fuederholzstrasse 8 in Herrliberg, with six planned condominiums and a garage, is due to start in the second quarter following legal approval. After successful reservation of 50% of the units, building work will commence. A planning application for the development project at Minervastrasse 124 in Zurich, which was acquired in the first quarter of 2021, is being submitted in the first quarter of 2022 now the preliminary building permit issued at the end of 2021 is legally valid. It is assumed that building approval will be obtained in the second half of 2022. Marketing and building work is scheduled to begin in the fourth quarter of 2022.

Outlook

The pressure from institutional investors remains unchanged due to the low interest rates. The company does not see any indications that the real estate market is losing any of its appeal, and therefore expects the transaction market to remain competitive in 2022. The real estate market will be dealing with the consequences of the pandemic beyond 2022 as a result of changes in

Reducing CO2 emissions in the portfolio is also a top priority for the company. Our properties are to be continuously improved over the next few years and produce fewer greenhouse gases. The company takes its responsibility seriously, analyses and monitors greenhouse gas emissions annually, derives appropriate measures, prepares for legal changes in good time and operates an active transformation management with regard to greenhouse gas emissions and energy in order to achieve the Federal Council's 2030 and 2050 climate targets.

Top Properties from the Portfolio

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SF Urban Properties Ltd		Page 3/4

31 May 2022

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 simplified prospectus and/or the key investor information document (KIID) or basic information sheet 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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