Portfolio

Commentary on the Portfolio

Züblinʼs cur­rent port­fo­lio com­pris­es five invest­ment prop­er­ties in Switzer­land locat­ed in Zurich, Bern, Baden and Egg with a total usable space of 28’135 m2. The over­all asset val­ue as of 30 Sep­tem­ber 2018 amounts to CHF 201.2 mil­lion. This rep­re­sents an increase of CHF 1 mil­lion as com­pared with 31 March 2018, main­ly deriv­ing from the fur­ther com­pres­sion of the dis­count rates.

As of 30 Sep­tem­ber 2018, annu­al­ized rental income was CHF 8.2 mil­lion. The vacan­cy rate for the port­fo­lio improved slight­ly from 10.5% to 10.3% dur­ing the report­ing peri­od. Weight­ed aver­age lease term (WALT) shows a slight decrease from 5.2 down to 4.7 years tak­ing into account small­er lease exten­sions that did not impact the total WALT significantly.

Swiss real estate indus­try has expe­ri­enced diver­gent trends dur­ing past six months. The leas­ing mar­ket stayed quite weak despite good macro­eco­nom­ic per­for­mance. In par­tic­u­lar­ly occu­pan­cies in sec­ondary loca­tions and rental rates in prime loca­tions were still in move­ment. At the same time invest­ment mar­ket looked quite over­served with investors hunt­ing for yield in low inter­est envi­ron­ment. We see more sup­port­ers expect­ing rise of inter­est rates in mid- and long-term, but do not find that these expec­ta­tions are gen­er­al­ly priced in.

Züblin was able to ben­e­fit from a fur­ther increase in the val­ue of its exist­ing port­fo­lio how­ev­er, con­sid­ered the risk-adjust­ed return for new acqui­si­tions to be too low and con­se­quent­ly, did not con­clude any trans­ac­tions in the year under review. The team aims to grow the port­fo­lio to the effec­tive scale but is cau­tious to trade-off short term scal­ing to investment’s qual­i­ty. There­fore our broad sourc­ing is bal­anced with dis­ci­plined selec­tion and sound reasoning.

One more step was under­tak­en fur­ther to bet­ter respond to the demand­ing mar­ket sit­u­a­tion. Züblin imple­ment­ed a new oper­a­tional set-up via out­sourc­ing its day-to-day prop­er­ty oper­a­tions to the expe­ri­enced prop­er­ty man­ag­er in sum­mer 2018. The company’s in-house asset man­age­ment func­tion will be rein­forced with a sea­soned expert.

Mar­ket val­ue of
over­all port­fo­lio increased
by CHF 1 million

Portfolio Overview

Major tenants

Over­all port­fo­lio
WALT 4.7 years

Lease contract analysis in CHF Mio. 

Portfolio Details