Ad hoc announcement: Annual financial statements of Credit Suisse real estate funds as of September 30, 2021

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Ad hoc announcement: Annual financial statements of Credit Suisse real estate funds as of September 30, 2021

The real estate funds of Credit Suisse Funds AG had a successful financial year to September 30, 2021, thanks to the purchase and sale of a number of properties as well as the completion of various construction projects. The COVID-19 pandemic had only a negligible impact on the results. The performance of the funds was between 8.4% and 19.8% in the financial year 2020/21.

December 8, 2021

Media Release (PDF)

The key results for each fund are summarized below.

Credit Suisse 1a Immo PK with strong performance increase

Credit Suisse 1a Immo PK (CS 1a Immo PK, security no. 844 303) ended the financial year to September 30, 2021, with a return on investment of 5.1% (previous year: 5.2%). The market value of the properties increased to CHF 4,799.4 million (previous year: CHF 4,481.2 million). The loss-of-rent rate fell to 7.8% (previous year: 8.4%). The COVID-19 pandemic affected the fund's rental income to only a limited extent. Rent reductions amounted to 1.4% of target rental income in the 2020/21 financial year (previous year: 1.7%). As communicated in June 2021, the fund's distribution ratio is set at 100% in the interests of a sustainable distribution policy. This reduces the distribution to CHF 45.00 per unit (previous year: CHF 50.00). The premium in the past financial year rose to 16.4% (previous year: 2.2%). Accordingly, the fund showed a performance from secondary market trading of 19.4% (previous year: -1.0%) in the 2020/21 financial year.

The increase in the market value of the portfolio was attributable to three factors: First, the existing portfolio was revalued to reflect a lowering of the discount rate from 3.28% to 3.14%. Second, the purchase and sale of existing properties resulted in a net increase in market values of around CHF 139.4 million. The third driver was further investment in construction projects, which led to an increase in market values of approximately CHF 53.8 million. In connection with the expansion of the portfolio, the leverage ratio rose to 21.9% (previous year: 16.9%). CS 1a Immo PK participated in GRESB global sustainability benchmarking, achieving three out of a possible five stars.

As already communicated in June 2021, the fund management conducted an in-depth review of the future positioning of CS 1a Immo PK and decided to open up investor eligibility and therefore seek a listing of the real estate fund on SIX Swiss Exchange. Following extensive discussions with the cantonal tax authorities, the planned listing date has been pushed back to Q4 2022 from Q2 2022 subject to all necessary approvals.

Key figures for CS 1a Immo PK (security no. 844 303)

Financial statements as of		Sept. 30, 2021	Sept. 30, 2020	Sept. 30, 2019
Market value of properties	CHF	4,799.4 mn	4,481.2 mn	4,158.8 mn
Leverage ratio as % of market values¹		21.91%	16.93%	11.42%
Net asset value per unit (including distribution)	CHF	1,280.25	1,267.51	1,254.78
Closing price (bid price)	CHF	1,490.00	1,295.00	1,335.00
Premium		16.38%	2.17%	7.99%
Distribution	CHF	45.00²	50.00	50.00
Distribution yield		3.02%	3.86%	3.69%
Distribution ratio		100.35%	118.18%	110.56%
Performance³		19.35%	-0.97%	5.33%
Return on investment		5.12%	5.18%	5.30%
Return on equity (ROE)		4.98%	5.59%	5.50%
Return on invested capital (ROIC)		3.93%	4.65%	4.93%
Operating profit margin (EBIT margin)		73.55%	73.28%	75.80%
Fund operating expense ratio GAV (TER_REF GAV)		0.52%	0.52%	0.53%
Fund operating expense ratio MV (TER_REF MV)		0.61%	0.59%	0.56%
Rental income	CHF	183.8 mn⁴	175.9 mn⁵	178.3 mn
Loss-of-rent rate		7.77%⁴	8.37%⁵	5.93%

¹ Maximum permitted encumbrance 30% of the market values (fund contract § 14 prov. 2).
² Dividend settlement date: December 14, 2021 (ex-date: December 10, 2021).
³ Past performance and financial market scenarios are not reliable indicators of future performance. The commissions and costs charged on the issue and redemption of fund units are not included in the performance calculation.
⁴ Due to the COVID-19 pandemic, rent reductions of CHF 2.80 million (1.39% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
⁵ Due to the COVID-19 pandemic, rent reductions of CHF 3.28 million (1.68% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
Data source: Credit Suisse, unless otherwise specified.

Successful capital increase for Credit Suisse Real Estate Fund Interswiss

Credit Suisse Real Estate Fund Interswiss (CS REF Interswiss, security no. 276 935) ended the financial year to September 30, 2021, with a return on investment of 4.0% (previous year: 8.6%). The market value of the properties fell slightly to CHF 2,381.7 million (previous year: CHF 2,418.1 million). The loss-of-rent rate was 9.8% (previous year: 9.9%). The COVID-19 pandemic affected the fund's rental income to only a limited extent. Rent reductions amounted to 1.9% of target rental income in the 2020/21 financial year (previous year: 2.0%). The distribution will be reduced to CHF 7.40 per unit (previous year: CHF 7.60). The performance was 8.4% in 2020/21 (previous year: -3.9%). The premium rose from 0.7% to 4.6%.

Through the successful capital increase in September 2021, CS REF Interswiss attracted new assets in the amount of CHF 138.9 million. The fund used these proceeds to acquire two fully leased properties in Aigle and Etoy; it also secured two additional properties in Bern and Geneva, ownership of which was transferred on October 1, 2021. In addition, the redevelopment of Rue du Bourg 17 in Lausanne was concluded, as were the gutting and conversion of the Blumenbergstrasse 39 residential property in Bern. The leverage ratio as of the end of the 2020/21 financial year was 18.5% (previous year: 24.2%). CS REF Interswiss participated in GRESB global sustainability benchmarking, achieving three out of a possible five stars.

Key figures for CS REF Interswiss (security no. 276 935)

Financial statements as of		Sept. 30, 2021	Sept. 30, 2020	Sept. 30, 2019
Market value of properties	CHF	2,381.7 mn	2,418.1 mn	2,416.6 mn
Leverage ratio as % of market values¹		18.48%	24.21%	26.87%
Net asset value per unit (including distribution)	CHF	196.95	196.89	189.72
Closing price (bid price)	CHF	206.00	198.20	214.20
Premium		4.60%	0.67%	12.90%
Distribution	CHF	7.40²	7.60	8.40
Distribution yield		3.59%	3.83%	3.92%
Distribution ratio		113.50%	97.22%	113.66%
Performance³		8.36%	-3.89%	17.93%
Return on investment		4.02%	8.55%	5.89%
Return on equity (ROE)		4.29%	8.09%	6.19%
Return on invested capital (ROIC)		3.27%	5.48%	4.34%
Operating profit margin (EBIT margin)		73.93%	74.49%	77.02%
Fund operating expense ratio GAV (TER_REF GAV)		0.68%	0.68%	0.68%
Fund operating expense ratio MV (TER_REF MV)		0.93%	0.98%	0.96%
Rental income	CHF	98.6 mn⁴	107.1 mn⁵	109.1 mn
Loss-of-rent rate		9.83%⁴	9.87%⁵	6.94%

¹ Maximum permitted encumbrance: one-third of market value (CISA Art. 65 (2)/CISO Art. 96 (1)).
² Dividend settlement date: December 14, 2021 (ex-date: December 10, 2021).
³ Past performance and financial market scenarios are not reliable indicators of future performance. The commissions and costs charged on the issue and redemption of fund units are not included in the performance calculation.
⁴ Due to the COVID-19 pandemic, rent reductions of CHF 2.13 million (1.91% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
⁵ Due to the COVID-19 pandemic, rent reductions of CHF 2.38 million (1.96% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
Data source: Credit Suisse, unless otherwise specified.

Credit Suisse Real Estate Fund LogisticsPlus increases market values through new properties and completed construction projects

Credit Suisse Real Estate Fund LogisticsPlus (CS REF LogisticsPlus, security no. 24 563 395) continued to diversify its portfolio in the 2020/2021 financial year. The market value increased to CHF 813.4 million (previous year: CHF 643.9 million). The return on investment was 5.2% (previous year: 4.2%). The successful capital increase in March 2021 contributed to an expansion of the portfolio by increasing the fund's equity capital by CHF 185.5 million. The leverage ratio was 8.5% (previous year: 15.1%). The loss-of-rent rate amounted to 3.0% (previous year: 1.8%). The COVID-19 pandemic affected the fund's rental income to only a very limited extent. Rent reductions amounted to 0.1% of target rental income in the 2020/21 financial year (previous year: 0.0%). The distribution remains unchanged at CHF 3.90 per unit. The performance of CS REF LogisticsPlus was 10.0% in the 2020/21 financial year (previous year: 24.2%). The premium fell slightly from 39.1% to 36.2%.

The increase in the portfolio's market values was mainly due to the purchase of existing properties as well as the completion of two construction projects. The fund acquired properties in Pfäffikon (Canton of Zurich), Hunzenschwil, Villars-sur-Glâne, and Pratteln in the 2020/21 financial year. Two construction projects were completed in the past financial year, in Zell (Canton of Lucerne) and in Schützenmattstrasse 65 in Bülach – both of which are fully leased. The Parking Kunstmuseum in Basel is due for completion in mid-December 2021, while another construction project for a logistics property is under preparation at Schützenmattstrasse 133/137 in Bülach. CS REF LogisticsPlus participated in GRESB global sustainability benchmarking, achieving three out of a possible five stars.

Key figures for CS REF LogisticsPlus (security no. 24 563 395)

Financial statements as of		Sept. 30, 2021	Sept. 30, 2020	Sept. 30, 2019
Market value of properties	CHF	813.4 mn	643.9 mn	444.6 mn
Leverage ratio as % of market values¹		8.52%	15.14%	2.65%
Net asset value per unit (including distribution)	CHF	105.65	104.26	103.91
Closing price (bid price)	CHF	143.90	145.00	126.00
Premium		36.20%	39.08%	21.26%
Distribution	CHF	3.90²	3.90	3.90
Distribution yield		2.71%	2.69%	3.10%
Distribution ratio		99.57%	107.48%	112.51%
Performance³		9.96%	24.21%	15.39%
Return on investment		5.24%	4.22%	3.31%
Return on equity (ROE)		4.79%	4.53%	3.18%
Return on invested capital (ROIC)		4.12%	4.22%	3.11%
Operating profit margin (EBIT margin)		82.72%	84.23%	81.77%
Fund operating expense ratio GAV (TER_REF GAV)		0.59%	0.60%	0.67%
Fund operating expense ratio MV (TER_REF MV)		0.49%	0.51%	0.60%
Rental income	CHF	33.8 mn⁴	25.4 mn⁵	22.8 mn
Loss-of-rent rate		3.02%⁴	1.78%⁵	6.54%

¹ Maximum permitted encumbrance: one-third of market value (CISA Art. 65 (2)/CISO Art. 96 (1)).
² Dividend settlement date: December 14, 2021 (ex-date: December 10, 2021).
³ Past performance and financial market scenarios are not reliable indicators of future performance. The commissions and costs charged on the issue and redemption of fund units are not included in the performance calculation.
⁴ Due to the COVID-19 pandemic, rent reductions of CHF 24’863 (0.07% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate. ⁵ Due to the COVID-19 pandemic, rent reductions of CHF 5’000 (0.02% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
Data source: Credit Suisse, unless otherwise specified.

Credit Suisse Real Estate Fund Siat benefits from high residential ratio

As of September 30, 2021, the market value of the properties of Credit Suisse Real Estate Fund Siat (CS REF Siat, security no. 1 291 370) rose to CHF 3,674.5 million (previous year: CHF 3,475.5 million). This appreciation was mainly driven by the fund's high residential ratio and the growing demand for residential property. In addition, the fund again achieved a good return on investment of 6.4% (previous year: 6.0%). The loss-of-rent rate fell significantly to 4.1% (previous year: 5.4%). The COVID-19 pandemic affected the fund's rental income to only a limited extent. The fund's rent reductions amounted to 0.8% of target rental income in the 2020/21 financial year (previous year: 0.5%). The distribution remains unchanged at CHF 5.20 per unit. The performance of CS REF Siat in the 2020/21 financial year was 19.8% (previous year: 10.3%). The premium consequently rose to 54.1% (previous year: 35.3%). The leverage ratio was at 18.8% (previous year: 16.9%).

CS REF Siat sold two smaller properties in Lucens in the last financial year. A residential construction project that was already at a relatively advanced stage was acquired in Prangins. Furthermore, the fund completed additional construction projects in Dübendorf and Spreitenbach. CS REF Siat participated in GRESB global sustainability benchmarking, achieving three out of a possible five stars.

Key figures for CS REF Siat (security no. 1 291 370)

Financial statements as of		Sept. 30, 2021	Sept. 30, 2020	Sept. 30, 2019
Market value of properties	CHF	3,674.5 mn	3,475.5 mn	3,304.7 mn
Leverage ratio as % of market values¹		18.82%	16.89%	18.71%
Net asset value per unit (including distribution)	CHF	161.95	157.40	153.89
Closing price (bid price)	CHF	249.50	213.00	201.00
Premium		54.06%	35.32%	30.61%
Distribution	CHF	5.20²	5.20	5.40
Distribution yield		2.08%	2.44%	2.69%
Distribution ratio		96.97%	95.07%	103.94%
Performance³		19.83%	10.30%	10.74%
Return on investment		6.38%	5.98%	7.63%
Return on equity (ROE)		6.09%	5.49%	7.51%
Return on invested capital (ROIC)		4.49%	4.03%	5.57%
Operating profit margin (EBIT margin)		71.57%	71.72%	73.07%
Fund operating expense ratio GAV (TER_REF GAV)		0.67%	0.67%	0.67%
Fund operating expense ratio MV (TER_REF MV)		0.62%	0.71%	0.71%
Rental income	CHF	149.5 mn⁴	145.1 mn⁵	140.7 mn
Loss-of-rent rate		4.06%⁴	5.42%⁵	4.94%

¹ Maximum permitted encumbrance: one-third of market value (CISA Art. 65 (2)/CISO Art. 96 (1)).
² Dividend settlement date: December 14, 2021 (ex-date: December 10, 2021).
³ Past performance and financial market scenarios are not reliable indicators of future performance. The commissions and costs charged on the issue and redemption of fund units are not included in the performance calculation.
⁴ Due to the COVID-19 pandemic, rent reductions of CHF 1.30 million (0.83% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.⁵ Due to the COVID-19 pandemic, rent reductions of CHF 0.71 million (0.46% of the target rental income) were granted and deducted from rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
Data source: Credit Suisse, unless otherwise specified.

Further information

The complete annual reports will be published in electronic form at the end of December 2021.
Current annual and semi-annual reports: https://amfunds.credit-suisse.com/ch/de/retail/fund/Search
More information: https://am.credit-suisse.com/ch/de/asset-management/investment-solutions/real-estate.html

Contact

Contact for media:
Credit Suisse Media Relations, Tel. +41 844 33 88 44, media.relations@credit-suisse.com

Contact for investors:
Ulrich Braun, Head of Product and Business Development, Credit Suisse Asset Management (Switzerland) Ltd.,
tel. +41 44 332 58 08, ulrich.braun@credit-suisse.com

Credit Suisse Asset Management (Switzerland) Ltd.
Credit Suisse Asset Management (Switzerland) Ltd. is part of the Asset Management division of Credit Suisse Group. Asset Management manages assets worth over CHF 475 bn worldwide (as at September 30, 2021). Backed by the global market presence of Credit Suisse Group, Asset Management offers active and passive solutions for traditional and alternative investments as well as proven product expertise in Switzerland, EMEA, APAC, and the Americas. Great importance is attached to sustainability. We offer a broad selection of active and passive investment funds that comply with the Credit Suisse Sustainable Investment Framework or replicate a sustainable index. In doing so, we pursue differing approaches, in which environmental, social and governance (ESG) criteria are applied at various points in the investment process.

This document was produced by and the opinions expressed are those of Credit Suisse as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Credit Suisse to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable but Credit Suisse does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof.

If nothing is indicated to the contrary, all figures are unaudited. The information provided herein is for the exclusive use of the recipient. Neither this information nor any copy thereof may be sent, taken into or distributed in the United States or to any U. S. person (within the meaning of Regulation S under the US Securities Act of 1933, as amended).

The tax treatment depends on the individual circumstances of each client and may vary over time. Credit Suisse does not provide tax advice, and tax implications have not been taken into consideration when calculating the returns.

Credit Suisse 1 a Immo PK, the collective investment scheme specified herein, is issued in Switzerland. The target group of investors is restricted to tax-exempt domestic institutions for employee benefits insurance and tax-exempt domestic social insurance and compensation offices. The fund management company is Credit Suisse Funds AG, Zurich. Credit Suisse (Switzerland) Ltd., Zurich, is the custodian bank. Subscriptions are valid only on the basis of the current fund contract including appendix, as well as the most recent annual report (or semi-annual report, if more recent). The fund contract with appendix, as well as the annual and semi-annual reports, are available free of charge from Credit Suisse Funds AG, Zurich, and from all Credit Suisse (Switzerland) Ltd. branches in Switzerland.

Credit Suisse Real Estate Fund Logistics Plus, Credit Suisse Real Estate Fund Interswiss, and Credit Suisse Real Estate Fund Siat are investment funds governed by Swiss law in the "Real Estate Funds" category as defined by the Swiss Federal Act on Collective Investment Schemes. The fund management company is Credit Suisse Funds AG, Zurich. Credit Suisse (Switzerland) Ltd., Zurich, is the custodian bank. Subscriptions are only valid on the basis of the current sales prospectus with integrated fund contract, simplified prospectus, and most recent annual report (or semi-annual report if more recent). The sales prospectus with integrated fund contract, simplified prospectus, and annual and semi-annual reports can be obtained free of charge from Credit Suisse Funds AG, Zurich or from all branches of Credit Suisse (Switzerland) Ltd. in Switzerland.

The key risks of real estate investments include limited liquidity in the real estate market, changing mortgage interest rates, subjective valuation of real estate, inherent risks with respect to the construction of buildings, and environmental risks (e.g. land contamination).