Portfolio
Robust portfolio with well-located properties and suitable tenant mix. With the acquisition of the Zurich-Oerlikon located property, the portfolio currently comprises of six properties in the economic areas of Zurich (5) and Berne (1) with a total value of CHF 217.9 million and rental income of CHF 9.4 million.
Portfolio development
As of 31 March 2020, annualised rental income amounted to CHF 9.4 million compared to CHF 8.2 million as of 31 March 2019. The increase of CHF 1.2 million arises from the acquisition of an additional property and several new lease transactions closed in the reporting period.
The vacancy rate declined from 10.0% to 8.2% during the reporting year, whereof 0.8% of the change is attributable to the newly acquired property. The weighted average lease term (WALT) of the rental contracts is 3.8 years.
Rental contribution of newly acquired property
+ CHF 1 million
Portfolio valuation
The total value of the portfolio as of 31 March 2020 amounts to CHF 217.9 million, an increase of CHF 17.0 million compared to 31 March 2019. 8.5% of the change in value primarily relates to the new acquisition. The portfolio was valued as per the reporting date, taking into account any COVID-19 effects. This is particularly reflected in the discount and capitalisation rates, which include an additional risk premium. The increase in value of the portfolio before new acquisition amounted to 0.7%.
Evaluation of the present market situation
Meanwhile, it is clear that the COVID-19 pandemic will affect various areas. Due to the inertia of the real estate markets and the low availability of data, consequences can only be estimated with some delay. The extent to which this will occur depends on the further course of the pandemic and the effectiveness of government measures to support the economy.
Züblinʼs portfolio is sustainably positioned in terms of sectors, uses, location and tenant mix, and has little exposure to sectors at risk. Sectors, which are subject to the official order to close the business in connection with COVID-19 are designated as sectors at risk. A detailed analysis of rental income by type of use shows an allocation of 69% office, 9% public services and 3% commercial. The gastronomy and retail sectors, which are sectors at risk due to the pandemic, account for around 8% of rental income.
Analysis of low-risk rental income by type of use
The effects on the transaction market are currently difficult to assess. However, a cautious attitude can be observed on both the buyerʼs and the sellerʼs side.
Züblin has sufficient financial resources and a secured credit facility to manage this crisis, as well as to become active when interesting opportunities arise. The companyʼs goal remains to maintain a healthy mix of stable rental income, value creation and risk in order to achieve the required returns.
Portfolio overview
Major tenants
WALT
overall portfolio
3.8 years
Rental contract analysis
Portfolio details
Strategic focus
In the course of the restructuring, Zübin initiated steps to develop a strategy in the 2015/16 financial year. These included a return to the traditional core markets, the stabilization of the financial and operating basis and ultimately growth.
In the year under review, the first acquisition has been achieved with the purchase of an office property in Zurich-Oerlikon. In addition, Züblin further continues with the necessary measures to support its growth strategy in Switzerland, and as a second priority in countries in the rest of German-speaking Europe.
