•    Real estate portfolio increases slightly to CHF 749.8 million
•    Stable target rental income of CHF 45.4 million thanks to active asset management
•    Rental income has increased by 8.2% to around CHF 42 million
•    Unchanged net income of CHF 27.7 million (2020: CHF 27.3 million)
•    Occupancy rate remains high at 93.1%
•    Higher net asset value (NAV) per share of CHF 116.04
•    Outperformance of +10.38% versus the Benchmark SXI Real Estate Funds Broad (+7.32%)

Details to the financial year 2021

Income statement

Once again, the commercial real estate market proved to be an extremely stable asset class. Rental income of the fund increased by more than 8% to approximately CHF 42.0 million (previous year: CHF 38.7 million). The increase is mainly explained by the fact that the acquisitions made in 2020 affected the income statement for the entire year for the first time. The target rental income of CHF 45.4 million, unchanged from the previous year, consists of commercial and office use (69%) followed by retail use (23%), parking (6%) and residential or miscellaneous use (2%).

Even though the occupancy rate fell slightly from 94.6% to 93.1% in the past financial year, we were still able to achieve pleasing rental successes. Thanks to targeted, active asset management, new leases were signed in the year under review for around 5,600 m2 with an average fixed lease term of 5 years. This shows that the leasability and the property ratings of the 35 properties held in the HSC Fund remain high.

The market value of the existing portfolio increased slightly to CHF 749.8 million at year-end (previous year: CHF 743.9 million). The increase of CHF 5.9 million is due to investments of around CHF 4 million, the reduction of the discount rates from 3.82% to 3.68%, and rental successes.

The fact that the income statement closes with a lower total comprehensive income of CHF 25.9 million (compared to CHF 32.4 million at the end of 2020) is related to the unrealized capital and securities gains of CHF 2.0 million. In the previous year, this position amounted to CHF 8.7 million.

Balance sheet

Total fund assets amounted to CHF 781.3 million at year-end (previous year: CHF 770.1 million), 1.5% higher than in the previous year. The fair market value of the properties increased by 0.8% to CHF 749.8 million. The appreciation of the total portfolio by CHF 6 million is explained by capitalized investment costs, investments and revaluations.

After deduction of all liabilities and liquidation taxes, the net fund assets at the end of 2021 amounts to CHF 503.9 million, slightly above the previous year's level of CHF 500.2 million. Thus, the net asset value per fund share increased from CHF 115.17 to CHF 116.04. Adjusted for the distribution, this corresponds to a return on investment of 5.4%.

Distribution and performance

The solid result of the HSC Fund is also reflected in the performance. Compared to the benchmark SXI Real Estate Funds Broad, which gained 7.32% in 2021, the performance of the fund shares was an above-average of 10.38%. This shows that stable distribution yields and performance can be achieved with a real estate fund designed for long-term value preservation. The robust asset situation has enabled the fund management company to increase the distribution per fund share by almost 4% to CHF 5.30. This means that the distribution yield remains stable at a high 4.6% compared to the same period last year. The ex-date for the distribution is 27 April 202 and the distribution will be paid out on 29 April 2022.

Outlook

The fund management company remains optimistic about the current financial year. The measures introduced by the asset management last year have had an impact in the form of leasing successes. These efforts will be continued in 2022 and should have a positive impact on both the occupancy rate and the remaining term of the leases. Particular attention will also be paid to a good tenant structure and location qualities appropriate to the portfolio. Should further purchase opportunities arise throughout the year, the fund portfolio would be expanded selectively.