- Significant increase in profit: return on investment of 3.2% in the first half of 2024/2025
- Cash flow yield of 2.8% stabilised at high level
- Sustained low vacancy rate of 1.6%
- 63% of dividend target already reached at half-year mark
- Total return outperformance of 9.7% versus SWIIT since launch
The property fund Swiss Prime Site Solutions Investment Fund Commercial (SPSS IFC) significantly increased its profit compared to the previous year, achieving an investment return of 3.2% in the first half of 2024/2025 (as at 31 March 2025). The sustained low vacancy rate of 1.6% and rising rental income produced a cash flow yield of 2.8% after six months. The strategic milestones for achieving targets in relation to both distribution and debt reduction were surpassed: net revenue per unit certificate was increased, 63% of the dividend target had already been reached by the half-year mark, and the loan-to-value ratio was reduced to 24%.
Return target exceeded
The SPSS IFC closed the first half of the 2024/2025 financial year with a return on investment of 3.18% (H1 2023/2024: 1.14%). The return on investment comprises a cash flow yield of 2.78% (H1 2023/2024: 2.75%) and a capital growth return of 0.4% (H1 2023/2024: –1.61%). The target range of 1.75 to 2.0% for the cash flow return for the first half of the year was therefore significantly outperformed.
Significant improvements in results
Net revenue rose by around 34% year-on-year to CHF 8.6 million (H1 2023/2024: (CHF 6.4 million). Drivers of this growth were a sustained high occupancy rate, improved financing conditions and positive effects from the capital increase. The increase in net operating revenues resulted in an increase in the cash flow yield from 2.75 to 2.78%. Net revenue per unit certificate increased to CHF 2.76, which corresponds to 63% of the planned annual distribution of CHF 4.40.
Portfolio remains stable with strong growth
Like-for-like rental income was up 2.6% year-on-year. Of the increase in rent, 1.5% is attributable to higher new letting and renewal activities, and 1.1% to index adjustments. The rent default rate, at 1.9%, (H1 2023/2024: 1.6%) stabilised at a low level. The weighted average unexpired term of rental contracts was increased to 5.8 years (H1 2023/2024: 5.5 years), which underlines the long-term stability of the portfolio.
Optimised risk profile
Fund financing was aligned more defensively in accordance with the strategy. As of the first half of 2024/2025, the loan-to-value ratio stood at 24%, meaning that the fund was already meeting the legal requirements regarding the expiry of the exemption relating to the maximum encumbrance in good time.
Sustainability strategy
Sustainability is firmly anchored in the asset management of SPSS IFC. The fund has created ten-year investment plans, including CO2 reduction pathways, for all properties and integrated these into portfolio and asset management. Automated reader systems to capture energy data have also been installed. These enable operational optimisations that can reduce energy consumption per property by up to 15%.
The fund is once again participating in the REIDA survey and the GRESB assessment. The results will be published in the annual report.
Strong performance maintained
The fundamental strength of the SPSS IFC is also seen in its solid performance. The fund posted performance (total return) of +16.6% for the period from 17 December 2021 to 31 March 2025. This means it outperformed the index of Swiss real estate funds listed on the stock exchange (SWIIT) by +9.7%, since the SWIIT fell by +6.9% in the same period.
Outlook with a clear focus
The SPSS IFC remains stable and profitable with a clear focus on its dividend-oriented strategy. The oversubscribed capital increase of CHF 80 million completed in March 2025 underscores investors’ confidence in the chosen investment strategy. The further reduction in borrowed capital led to an improvement in the risk profile. The aim is to maintain the high operating margins and further optimise the portfolio. New properties must have an adequate risk and return profile, with a clear focus on sustainable and attractive cash flow yields.
Fund profile
The SPSS IFC is aimed at qualified investors and primarily invests in commercial real estate in established business locations throughout Switzerland. The investment focus is on broad diversification, high cash flow stability and attractive risk-return profiles. With an investment strategy that maintains an anti-cyclical focus on commercial properties, the SPSS IFC utilises attractive investment opportunities and offers enhanced protection from the effects of inflation with a high indexing rate of 95%. SPSS IFC is the direct owner of the real estate; as such, taxes on income and capital gains are pre-paid by the fund itself, making them tax-free to investors (private and business assets) that are resident or domiciled in Switzerland.
Detailed information and presentation
A recording of the presentation on the 2024/2025 semi-annual report can be found at the following link.
If you have any questions please contact:
Monika Gadola Hug, Head Client Relations
Tel. +41 58 317 16 31, monika.gadolahug(at)sps.swiss
Andrea Schaller, Media Relations
Tel. +41 58 317 17 51, andrea.schaller@sps.swiss