The Swiss real estate environment

Transcription

1 The Swiss real estate environment January 2018 Swiss GDP forecasts revised down to +0.9% in 2017, with confirmed inflation expectation after 5 years of negative rates (+0.5%). No material quarterly change on Swiss government bonds: the 10year bond is hanging below zero (0.12% on January 4 th ). Increasing supply on office markets is pushing landlords to grant tenants incentives and adjust rents downwards, while prime yields are maintained at ultralow levels (3.0% in Geneva and 2.70% in Zurich). Residential values for both rentalassets and private units are slowly decreasing (1.1% and 0.8% YTD respectively at end of Sept2017). After a sharp correction in Q32017, indirect SXI Real Estate index recovered in December and recorded strong performance in 2017: +6.3% for SXI Real Estate Fund index, and +10.4% for Shares index.

2 Government Yields e2017 e e2017 e2018 Macroeconomic situation SWISS ECONOMY Average values at Sept (estim.) 2018 (estim.) GDP +0.9% +1.9% Unemployment rate 3.2% 3.1% Inflation rate +0.5% +0.6% Investment in construction +1.5% +1.4% Sources: FPRE, as per SECO, KOF, Créa, CS, UBS, BAK Evol. vs After 8 years of expansion, global economy has strengthened further in Growth has been recorded in most developed countries, even in Eurozone which was one of the biggest concerns at year start. Driven by the US tax reform, most of the forecasts are reflecting optimism for However, some worries remain and could have unclear consequences, such as the overall level of asset prices, the increasing weight of government debts, or political tensions in the Middle East and NorthKorea. As for Switzerland, GDP forecasts were revised downwards by Economic Institutes in December, at 0.9% on average (from +1.4% by the end of Sept2017). Expectations for inflation remain unchanged as prices are estimated to increase by +0.5% in 2017 (vs +0.5% in Sep17). Unemployment rate stood at 3.1% at the end of November 2017, and trend remains steady for 2017 with a rate expected to average 3.2% by the end of the year (then down to 3.1% in 2018). Swiss interest rates have not moved materially over the quarter : the 10year Swiss bond hangs below zero (0.12%) and the 50year bond remains at 0.44%. The trend is moving upwards in the US with the 10year bond getting back to Q12017 levels i.e. close to 2.5%. GDP vs. Unemployment rate +5.0% +4.0% 3.3% 3.2% 3.1% +3.0% 1.9% +2.0% 1.3% 0.9% +1.0% 1.0% 2.0% GDP Unemployment rate 3.0% Inflation rate Sources: FPRE, SECO, KOF, Créa, CS, UBS, BAK +3.0% +2.5% +2.0% +1.5% 0.6% +1.0% 0.5% 0.5% 0.6% +0.5% 0.5% 0.4% 1.0% Inflation rate (Curent forecast) 1.5% Inflation rate (Last quarter forecast) 1.1% Sources: BNS, FPRE, Institutes SECO, KOF, Créa, CS, UBS, BAK Main Government Bonds Curve 6M to 50 years 3.00% 2.50% 2.00% 2.04% 2.27% 2.39% 2.47% 2.80% 1.76% US 1.91% France 1.50% 1.59% 1.28% Germany 1.00% 0.50% 0.15% 0.80% 0.45% 0.01% 0.32% 0.10% 0.05% 0.05% 0.05% 0.81% 0.36% Japan 0.44% Switzerland 0.50% 1.00% 0.59% 0.65% 0.77% 0.20% 0.33% 0.51% 0.12% 1.50% (6M) (5Y) (7Y) (10Y) (30Y) (50Y) Source : Bloomberg 2

3 Rent Index (Base 100 = 2000) % Evolution vs. previous year Q32017 Q32017 Direct real estate: Commercial and Residential COMMERCIAL REAL ESTATE Office supply is growing in both Geneva and Zurich Office markets. Demand remains dynamic but mostly on smaller surfaces, coupled with higher tenants incentives (e.g. fitout costs, rentfree period). Prime yields are maintained at very low level: 3.0% in Geneva, 2.7% in Zurich, while prime rents are showing first signs of decrease (esp. in Geneva where average prime rents have been reduced from CHF 850 to CHF 800). Office spaces GENEVA ZURICH Q32017 Trend Q32017 Trend Vacancy (sqm) 184' '000 Vacancy rat e (%) 5.40% 5.30% Avg asking rent CHF 490 CHF 330 Prime rent CHF 800 CHF 790 Prime yield 3.00% 2.70% Source : JLL Office Market Profiles. Trend : Trailing 12Mo (i.e. vs Q4) Prime yield Office 4.5% 4.0% 3.5% Vacancy rate (%) Office 6.0% 5.0% 4.0% 3.0% 5.30% 5.40% 3.0% 2.5% GENEVA ZURICH 3.00% 2.70% 2.0% 1.0% 0.0% GENEVA ZURICH Source : JLL Office Market Profile Q22017 Source : JLL Office Market Profile Q22017 RESIDENTIAL REAL ESTATE In line with records, residential rents have increased by +1.0% on average during Transactionwise, YTD prices of assets are following asymmetric trends at the end of Q32017: values for both rentalassets and private units have decreased by 1.1% and 0.8% respectively, while individual housing show resilient signs of growth (+1.6% YTD). On the financing side, the 10year fixed rate mortgages have scarcely changed, with an average rate of 1.58% over the last 3 months. From January to November 2017, net immigration has been positive ( incomers), but the flow remains below level at the same period (11% vs YTD). Rental Index Evolution % 1.7% 0.5% 0.4% 2.1% 1.0% 2.2% 2.1% 3.1% 1.5% 1.4% 1.1% 1.4% 1.1% % Evolution Rent Index (OFS) 0.1% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 1.0% 1.0% 0.5% 0.0% Source : BFS Swiss Federal Statistical Office Net Migration Balance Residential Price Evolution Monthly 12'000 10'000 8'000 Migration balance In number of people (Dec to Nov2017) T12M 100'000 90'000 80'000 70'000 60'000 (Base 100 = Q1 ) '000 50' '000 2'000 40'000 30'000 20' RENTAL ASSETS PRIVATE FLATS IND. HOUSING 10' Source: Secrétariat d'etat aux migrations SEM Monthly balance T12M 95.0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q Source : W&P 3

4 Indirect real estate: SXI Real Estate SXI REAL ESTATE INDEX After a sharp drop between July 2017 and November 2017 (7.6% over the period), SXI Real Estate Funds Index recovered in December and ended 2017 with a yearly performance of +6.3%. Similar moves were observed over the period on the SXI Real Estate Shares, but the index ended 2017 with a higher yearly performance of +10.4%. The average agio of SXI Real Estate funds stood at 28.3% in December (with a peak at 34.2% in July). Distribution yield has slightly improved to 2.65% (vs 2.72% at end of October). SXI Real Estate Funds Index SXI Index / NAV (Base 100) % Agio SXI RE Funds Index VNI 100 Jan13 May13 Sep13 Jan14 May14 Sep14 Jan15 May15 Sep15 Jan16 May16 Sep16 Jan17 May17 Sep17 % Agio 40% 35% 30% 25% 20% 15% 10% 5% 0% SXI RE FUNDS Total Return Yield % Volume Market Property Figures as at 04janv2018 Price YTD 5y p.a. NAV Agio Distrib. Date Real Estate Leverage (mio) Cap. (mio) Focus Type UBS SWISS SIMA CH % +6.0% % 2.88% % 22% '844 Mixeduse Indirect CS 1A IMMO PK (1) CH N/A +5.3% 1' % 3.45% % 5% Mixeduse Direct CS REF SIAT CH % +7.2% % 2.67% % 14% '126 Residential Indirect CS REF LIVINGPLUS CH % +6.0% % 2.33% % 18% '728 Residential Direct CS REF INTERNATIONAL (1) CH % +9.3% 1' % 3.29% % 13% Abroad Indirect UBS SWISS ANFOS CH % +4.6% % 2.68% % 18% '220 Residential Indirect CS REF INTERSWISS CH % +3.9% % 4.07% % 24% 8.3 1'713 Commercial Indirect UBS SW SWISSREAL CH % +5.6% % 3.64% % 20% '654 Commercial Indirect IMMOFONDS CH % +5.9% % 3.02% % 21% 2.5 1'439 Residential Indirect SWISSCANTO IFCA CH % +5.0% % 2.40% % 18% '448 Residential Indirect LA FONCIERE CH % +8.1% % 1.77% % 17% 0.7 1'343 Residential Mixed SCHRODER IMMOPLUS CH % +8.4% 1' % 2.53% % 21% 0.9 1'329 Commercial Indirect FIR CH % +7.1% % 2.09% % 16% 5.1 1'184 Residential Mixed UBS FONCIPARS CH % +7.9% % 2.46% % 11% 9.7 1'278 Residential Indirect SOLVALOR 61 CH % +4.8% % 1.93% % 3.8 1'063 Residential Direct IMMO HELVETIC CH % +7.2% % 2.78% % 22% Residential Indirect CS REF HOSPITALITY CH % 0.2% % 3.18% % 27% Hospitality Direct BONHOTE IMMOBILIER CH % +5.9% % 2.13% % 20% Residential Direct ROTHSCHILD RE SWISS CH % +7.9% % 2.29% % 26% Residential Direct SWISSINVEST REAL CH % +7.9% % 2.60% % 13% Residential Indirect CS REF GREEN PROPERTY CH % N/A % 3.02% % 22% '304 Commercial Direct PROCIMMO CH % +8.3% % 3.05% % 39% Commercial Direct REALSTONE CH % +6.4% % 2.57% % 43% Residential Direct UBS DIRECT RESIDENTIAL CH % +6.7% % 2.31% % 18% Residential Direct PATRIMONIUM CH % +7.2% % 2.06% % 27% Residential Direct SWISSCANTO COMMERCIAL CH % N/A % 2.78% % 9% 8.3 Commercial Direct UBS DIRECT URBAN CH % N/A % 1.66% 4% Residential Direct SF SUSTAINABLE PROPERTY CH % N/A % 0.57% % 15% Residential Direct POLYMEN FONDS CH % N/A % 2.13% % 33% Residential Direct CS REF LOGISTICSPLUS (1) CH % N/A % 2.83% % 8% Logistics Direct CS REF GLOBAL (1) CH % +0.3% % 3.84% % 25% 265 Abroad Indirect STREETBOX CH % N/A #N/A 3.64% % Abroad Indirect RESIDENTIA CH % +7.6% % 1.47% % 17% Residential Direct SXI RE FUNDS CH % +5.8% +28.3% 2.65% 20% 39'430 (1) Funds not included in SXI Global Real Estate Funds index. Restricted access to pension funds and/or qualified investors. SXI RE SHARES Performance Yield % Volume Market Figures as at 04janv2018 Price YTD 5y p.a. NAV Agio Distrib. Date Leverage (mio) Cap. (mio) SWISS PRIME SITE CH % +8.4% % 4.13% % '408 PSP CH % +5.2% % 3.63% % '238 ALLREAL CH % +7.3% % 3.50% % '623 MOBIMO CH % +8.2% % 3.80% % 7.0 1'626 INTERSHOP CH % +14.0% % 4.09% % HIAG IMMOBILIEN CH % n/a % 3.00% % ZUG ESTATE AG CH % n/a % 1.26% % INVESTIS HOLDING SA CH % n/a % 3.68% % PLAZZA CH % n/a % 1.31% WARTECK CH % +6.2% % 3.49% % SWISS FINANCE & PROPERTY CH % n/a % 3.74% % VARIA US PROPERTIES AG CH % n/a n/a 5.46% % N/A 274 BFW LIEGENSCHAFTEN CH % n/a % 3.10% % ZUEBLIN IMM CH % n/a % 59% SXI RE SHARES CH % +25.1% 3.76% 42% 19'571 Sources: Bloomberg / Annual Reports 4

5 #N/A nov2017 oct2017 sept2017 août2017 juil2017 juin2017 mai2017 avr2017 mars2017 févr2017 déc nov oct sept août juil juin mai avr mars févr janv nov oct sept août juil juin mai avr mars févr #N/A nov2017 oct2017 sept2017 août2017 juil2017 juin2017 mai2017 avr2017 mars2017 févr2017 déc nov oct sept août juil juin mai avr mars févr janv nov oct sept août juil juin mai avr mars févr Swiss Real Estate Funds Focus UBS SWISS SIMA Stock Price CHF % / NAV per Share CHF 82.9 as of Agio / Disagio +36.1% Dividend Yield 2.88% Dividend CHF 3.21 paid in Real Estate Yield 4.74% Leverage 22% Market Capitalisation (mchf) 7'844 Past Month Transaction (mchf) 58.1 UBS PRPRTY FD SW MIXD SIMA Residential and commercial assets across Switzerland, mainly in big cities. Zurich (48%), Basel (11%), Bern (9%), Geneva (8%) and Vaud (5%) Mixeduse Indirect CHF 3.18 (), CHF 3.18 () Source: Bloomberg 99 LA FONCIERE LA FONCIERE 1'196 Stock Price CHF % / 1033 NAV per Share CHF as of Agio / Disagio +50.9% Dividend Yield 1.77% Dividend CHF paid in Real Estate Yield 6.35% Leverage 17% Market Capitalisation (mchf) 1'343 Past Month Transaction (mchf) 0.7 Mainly residential assets (+60%) in Romandie (85% in VD + GE). Residential Mixed CHF 20.6 (), CHF 20.2 () 1'146 1'096 1' Source: Bloomberg 946 5

6 #N/A nov2017 oct2017 sept2017 août2017 juil2017 juin2017 mai2017 avr2017 mars2017 févr2017 déc nov oct sept août juil juin mai avr mars févr janv nov oct sept août juil juin mai avr mars févr #N/A nov2017 oct2017 sept2017 août2017 juil2017 juin2017 mai2017 avr2017 mars2017 févr2017 déc nov oct sept août juil juin mai avr mars févr janv nov oct sept août juil juin mai avr mars févr SOLVALOR 61 SOLVALOR Mainly residential assets (86%) in Romandie (86% in VD + GE). 282 Stock Price CHF % 283 / NAV per Share CHF as of Agio / Disagio +43.6% Dividend Yield 1.93% Dividend CHF 5.09 paid in Real Estate Yield 5.76% Leverage 0% Market Capitalisation (mchf) 1'063 Past Month Transaction (mchf) 3.8 Residential Direct CHF 4.89 (), CHF 5.58 () Source: Bloomberg 222 CS REAL ESTATE FUND GREENPROPERTY Stock Price CHF % / NAV per Share CHF as of Agio / Disagio +25.8% Dividend Yield 3.02% Dividend CHF 4.10 paid in Real Estate Yield 4.48% Leverage 22% Market Capitalisation (mchf) 2'304 Past Month Transaction (mchf) 17.9 CS REAL ESTATE FD GREEN PROP Focus on energyefficient commercial properties (71%), mainly in Zürich area (76%). Merged with CS PropertyPlus in August. Commercial Direct CHF 3.5 (), CHF 3.5 () Source: Bloomberg 116 6

7 #N/A nov2017 oct2017 sept2017 août2017 juil2017 juin2017 mai2017 avr2017 mars2017 févr2017 déc nov oct sept août juil juin mai avr mars févr janv nov oct sept août juil juin mai avr mars févr FIR FOND IMMOBILIER ROMAND FONDS IMMOBILIER ROMAND 200 Mainly residential assets (80%) in Romandie (92%) 195 Stock Price CHF % / NAV per Share CHF as of Agio / Disagio +43.5% Dividend Yield 2.09% Dividend CHF 3.90 paid in Real Estate Yield 3.16% Leverage 16% Residential Mixed CHF 3.9 (), CHF 3.85 () Sources: Bloomberg 160 Market Capitalisation (mchf) 1'184 Past Month Transaction (mchf) 5.1 7

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