Business Report/Portfolio

Portfolio 

Commentary on the Portfolio


Züblinʼs portfolio in 2018/19 comprised five investment properties in Switzerland located in Zurich, Bern, Baden and Egg with a total usable space of 28'144 m2. With the property in Oerlikon acquired after the reporting date total usable space will amount to 31'387 m2.


The overall asset value as of 31 March 2019 totaled CHF 200.9 million. This represents an increase of CHF 0.8 million as compared with 31 March 2018, mainly deriving from the further compression of discount rates and leasing activities. Valuation of the property in Oerlikon will be performed as a part of half-year report 2019/20 and results will be reflected in Company’s figures accordingly.

As of 31 March 2019, annualized rental income was CHF 8.2 million. The vacancy rate for the portfolio improved slightly from 10.5% to 10.0% during the reporting period. Weighted average lease term (WALT) declined to 4,3 years. For the Berne property Arco West, the ongoing repositioning and leasing activities produced sizable improvements. In the second half of 2018/19, a lease agreement for around 800 square meters was signed. The lease will commence in the first quarter of 2019/20 financial year. This lease represents approximately 10% of the GRI and reduces the vacancy rate for this asset below 50%.

Swiss real estate market is characterized by high asset prices, and low cap rates. Nevertheless, Züblin managed to acquire a reasonably priced property that fits our strategy. The Zueblin stake represents the largest share of the condominium, and allows Züblin to be actively involved in management for the benefit of its shareholders and of all condominium members. Building location is very good, and tenants are long-term and financially stable.

Züblin aims to grow the portfolio further in order to reach effective scale through select opportunities. Our broad sourcing is balanced with disciplined selection, and is guided by strict criteria.

Market value
overall portfolio increased
by CHF 0.8 million

Portfolio Overview

 

 

31.03.2019

31.03.2018

 

 

 

 

Market value in CHF million

 

200.9

200.1

Annualized rental income in CHF million

 

8.2

8.1

Vacancy rate monetary in %

 

10.0

10.5

Major tenants

Tenant

Sector

%

 

 

 

Baker & McKenzie, Zurich

Law firm

35.8

Roland Berger, Zurich

Consulting

17.1

BR Bauhandel AG, Bern

Distribution

4.7

Testo Industrial Services AG, Egg

Quality control

4.6

Logismata AG, Zurich

Information technology

2.7

Total

 

64.9

WALT
overall portfolio
4.3 years

Lease contract analysis

Portfolio Details

 

 

Baden Rütistrasse 3/3a

Egg Gewerbestrasse 12/12a

Zürich Hardturmstrasse 76

Zürich Holbeinstrasse 22/30

Bern Morgenstrasse 136

Total

 

 

 

 

 

 

 

 

Investment category

 

Office

Office

Office

Office

Office

 

Date of acquisition

 

1.3.2000

1.4.2000

20.3.2000

1.7.2008

1.6.2000

 

Year of construction

 

1961

1982/87

1967

1961/72

1991

 

Year of rennovation

 

2012

2012

2010

2009/2010

2013

 

Plot size

sqm

1 172

4 894

1 100

1 660

2 740

11 566

Ownership

 

□

□

□

□

□

 

 

 

 

 

 

 

 

 

Annualized rental income

CHF thousand

1 100

1 013

995

4 331

749

8 189

Vacancy rate

(CHF) %

0.1

9.0

0.0

0.0

52.0

10.0

Capitalisation rate

%

3.7

4.3

3.3

2.9

4.6

3.3

Discount rate (nominal)

%

4.2

4.8

3.8

3.4

5.1

3.8

 

 

 

 

 

 

 

 

Office

sqm

3 446

4 100

3 099

5 524

5 708

21 877

Retail

sqm

344

-

0

0

1 601

1 944

Storage

sqm

1 185

1 580

648

288

621

4 323

Total usable space

sqm

4 975

5 680

3 748

5 812

7 929

28 144

 

 

 

 

 

 

 

 

Vacancy

sqm

-

472

-

-

4 594

5 066

Vacancy rate

(sqm) %

0.0

8.3

0.0

0.0

57.9

18.0

 

 

 

 

 

 

 

 

No. of parking spaces

number

19

110

35

45

88

297

□ Ownership of 100%

Strategy

During the financial year 2015/16 Züblin launched a strategic development initiative: the return to core markets, stabilization of the financial and operational business and finally growth. In the year under review the company continued working on implementing the necessary measures to support the strategy. A first success was achieved in April 2019 with the purchase of an office property in Zurich, Oerlikon.

The stable financial position enable the company to pursue its investment policy and grow through acquistions in Switzerland and other German-speaking countries.