SPSS Investment Fund Commercial: sustainable returns through strategic property selection

An investment strategy focused on real cash flows

«Our goal is to acquire properties that create long-term value for both tenants and investors», explains Maximilian Hoffmann. The fund pursues a core plus strategy, which includes relevant secondary locations in the commercial segments of «light industrial» and «retail» in addition to central locations. «What matters most is that these locations are well aligned with the needs of commercial tenants and thereby create opportunities for risk-adjusted returns», says Hoffmann.

When acquiring new properties, the fund adheres to two key principles:

1. Practical benefits for tenants: The property must offer clear advantages for commercial tenants – be that through its location or through the quality of the spaces.
2. Risk-adjusted pricing: The property’s valuation must be in line with the risk-return profile.

«This clear focus enables us to secure attractive investment properties even outside traditional A locations», explains Hoffmann. One example of the successful implementation of this strategy is the Centro Lugano Sud shopping centre, where targeted measures have reduced the vacancy rate from eight per cent to zero.

«Our rental contracts have an average residual term to maturity of 5.4 years, and the fund’s current vacancy rate is just 1.5%. This highlights the attractiveness of our locations», says Hoffmann. In addition, 95% of the rental contracts are linked to the CPI, which means the rents are automatically adjusted for inflation.

Priority: cash flow and sustainable dividends

«Our aim is to achieve an attractive return on investment with a steady target dividend of CHF 4.40 – funded by genuine net revenue rather than revaluation gains», explains Hoffmann. With a current dividend of CHF 4.90, the fund is already among the leaders in its category. This clear focus on cash flow makes it particularly attractive to investors seeking long-term, stable returns.

Data-driven sustainability as a success factor

Another key element of the fund’s strategy is the integration of ESG criteria. The focus is on measurable results, such as reducing energy consumption and CO₂ emissions. «With the help of our data-driven decision-making grids, we have introduced targeted measures that have vastly reduced energy and CO₂ consumption per square metre, putting us well ahead on our long-term reduction pathway», explains Hoffmann.

The fund has a GRESB rating of 81/100 points and three stars – a strong result, although not the primary goal of the strategy. «What matters most to us is that the measures are both economically viable and have a positive sustainable impact», he emphasises.

Opportunities in the current market environment

Hoffmann believes that now is a good time to invest: «Following a correction, the market is experiencing a slight upturn. The easing interest rate environment is also having a positive impact and we are starting to see more interest from investors again.»

The fund is considering a listing on the SIX Swiss Exchange at some point down the line. This could happen once the fund volume exceeds CHF 800 million – it currently stands at approximately CHF 435 million. The listing would increase the liquidity of the units and facilitate access for investors.

Conclusion: A clear focus for sustainable success

The SPSS IFC strategy combines a deep understanding of the real estate market with a clear focus on tenant needs. The strategy of making risk-adjusted commercial investments in secondary locations has proved successful and is delivering attractive returns. Low vacancy rates and a stable portfolio with CPI-linked rental contracts not only ensure constant net revenue and an attractive dividend but also better long-term prospects for investors.