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Annual reports of international real estate funds as of December 31, 2020

The international real estate funds of Credit Suisse Funds AG posted a robust operating performance during the COVID-19 pandemic. Unlike fundamental real estate performance, the funds’ secondary market performance was negative. Credit Suisse Real Estate Fund Global has been in liquidation since January 1, 2021.

March 24, 2021

Credit Suisse Real Estate Fund International with stable real estate values
Credit Suisse Real Estate Fund International (CS REF International, sec. no. 1968511) further optimized its portfolio in the 2020 financial year. The recently completed and fully rented office complex High5ive was acquired in Krakow (PL). It is located just 500 meters from the central train station. The new construction project Jubilee Place in Brisbane (AU) is making excellent progress and will be completed during this financial year. Five properties in the Netherlands, Ireland, Australia and Japan (two) that were no longer in line with strategy were sold.

The market value of all properties as of December 31, 2020 amounted to CHF 4,033.8 million (previous year: CHF 4,341.0 million). While the real estate values in local currency remained virtually unchanged, the market value was down year-on-year due to the strong Swiss franc. The currencies in the capital account are hedged 95% through forward exchange transactions in order to mitigate currency fluctuation risks. Vacancies were successfully reduced, bringing the loss-of-rent rate in 2020 down to 6.0% (previous year: 8.0%). Rental income rose to CHF 227.5 million (previous year: CHF 224.1 million). The COVID-19 pandemic dented rental income by just 0.2%. The distribution was reduced to CHF 40.00 per unit, while the distribution yield was 3.9% (previous year: 3.5%). In secondary market trading, the premium slid further, settling at –3.2% as of December 31, 2020 (previous year: 7.0%). The fund management company checks on an ongoing basis whether the positioning of the fund as regards the OTC tradability offered corresponds to the current client requirements.

Key figures for CS REF International (sec. no. 1968511)

Kennzahlen CS REF Green Property (Valoren-Nr. 10077844)

Maximum permitted encumbrance: one third of market values (Art. 65(2) CISA/Art. 96(1) CISO).
2 Value date of distribution 31.03.2021 (ex-date: 29.03.2021).
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.
Due to the COVID-19 pandemic, rents were waived in the amount of CHF 0.51 mn (0.21% of target rental income); this amount was charged against rental income. Waived rents were not taken into consideration when calculating the loss-of-rent rate.
Source: Credit Suisse, unless specified otherwise

Annual and semi-annual reports available at Fundsearch

Credit Suisse Real Estate Fund Global (in liquidation since January 1, 2021) with unchanged distribution
Credit Suisse Real Estate Fund Global (CS REF Global (in liquidation), sec. no. 13985167) closed the 2020 financial year in good shape. The market value of the properties fell slightly to CHF 377.8 million (previous year: CHF 381.4 million). The change in value was very different among the individual properties: while the property at Karlstrasse in Munich (DE) posted strong gains on the back of positive developments on the real estate market and due to a new rental agreement, the market values of the properties in Houston (US) and Leeds (UK) contracted sharply due to local market trends. The loss-of-rent rate was reduced significantly and amounts to 4.7% (previous year: 8.8%). Net income fell slightly to CHF 10.0 million (previous year: CHF 10.2 million). The distribution was accordingly kept constant at CHF 3.40 per unit.

Given the low trading volume, a discount of over 20% developed in the fund’s secondary market trading over the course of the 2020 financial year within the scope of the market corrections due to COVID-19. This development is no longer consistent with the fundamentally good location and asset quality of the underlying real estate portfolio. In November 2020, the fund management company therefore decided to terminate the fund contract effective December 31, 2020 and to set in motion the fund’s liquidation. The process of selling off the properties will begin in mid-April 2021. The market values of the properties were verified by a second, completely independent valuation expert. The audited market values can be found in the table “Market values of CS REF Global”.

Investors will be notified in due course about the progress of the liquidation and the payout of the liquidation dividends, which is envisioned in multiple steps.

Key figures for CS REF Global (sec. no. 13985167)

Kennzahlen CS REF Hospitality (Valoren-Nr. 11876805)

1 Maximum permitted encumbrance: one third of market values (Art. 65(2) CISA/ Art. 96(1) CISO).
2 On the basis of the last trading day on 27.11.2020.
3 Value date of distribution: 31.3.2021 (ex-date: 29.3.2021).
4 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.
5 No rent waivers had to be granted in connection with the COVID-19 pandemic.
Source: Credit Suisse, unless specified otherwise

Market values of CS REF Global (sec. no. 13985167)

Kennzahlen CS REF LivingPlus (Valoren-Nr. 3106932)

Annual and semi-annual reports available at Fundsearch

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Credit Suisse Asset Management (Switzerland) Ltd.
Credit Suisse Asset Management (Switzerland) Ltd. belongs to the Asset Management business area of Credit Suisse Group (referred to as "Credit Suisse"). Credit Suisse Asset Management is part of Credit Suisse's International Wealth Management division and manages assets worth over CHF 440 billion worldwide (as at December 31, 2020). Based on the stability and the range of opportunities offered by Credit Suisse's global market presence, the Asset Management area of Credit Suisse offers active and passive solutions for traditional and alternative investments as well as proven product expertise in Switzerland, EMEA, APAC, and America.

Disclaimer
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 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.

Unless otherwise noted, all figures are unaudited. The information in this document is for the exclusive use of the recipient. Neither this information nor copies of it may be sent to, taken to, or distributed in the United States of America or given to U.S. persons (as defined in Regulation S of the U.S. 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. Tax implications have not been taken into consideration when calculating the returns.

The Credit Suisse Real Estate Fund International is an investment fund established under Swiss law in the category of "real estate funds," in accordance with the Swiss Federal Act of June 23, 2006, on Collective Investment Schemes (CISA), for qualified investors, as defined in Article 10(3) and (4) (as amended on July 1, 2016), in conjunction with Article 6 and Article 6a of the Ordinance on Collective Investment Schemes (CISO) (as amended on January 1, 2015). The fund management company is Credit Suisse Funds AG, Zurich. The custodian bank is Credit Suisse (Switzerland) Ltd., Zurich. Subscriptions are only valid if made on the basis of the current sales prospectus with integrated fund contract, the simplified prospectus, and the most recent annual report (or semiannual report, if this is more recent). The sales prospectus with integrated fund contract, the simplified prospectus, and the annual and semiannual reports may be obtained free of charge from the fund management company or from any branch of Credit Suisse (Switzerland) Ltd. in Switzerland.

The Credit Suisse Real Estate Fund Global (in liquidation) is an investment fund established under Swiss law in the category of "real estate funds," in accordance with the Swiss Federal Act on Collective Investment Schemes. The fund management company is Credit Suisse Funds AG, Zurich. The custodian bank is Credit Suisse (Switzerland) Ltd., Zurich. The sales prospectus with integrated fund contract, the simplified prospectus and/or Key Investor Information Document (KIID), and the annual and semiannual reports may be obtained free of charge from the fund management company or from any branch 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).

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