Maximilian Hoffmann, CIO Funds (Commercial) at Swiss Prime Site Solutions, conceived and established the Investment Fund Commercial (IFC) real estate fund, and has supervised it from the outset. Now he is coordinating its IPO. He explains why commercial real estate is so attractive today.
Mr Hoffmann, how did the Investment Fund Commercial come about, and what was the original idea?
Maximilian Hoffmann: We designed and launched the fund in 2021 because we wanted to create an income product for our investors. The aim was to establish a fund that pays consistently strong dividends and has a clear focus on cash flow; i.e. on active income generation. To achieve that, we have made targeted investments in high-yield commercial properties in secondary locations. Put simply, premium properties yield lower cash flow returns due to high purchase prices; higher cash flow returns can be achieved in secondary locations. The professional investment and management of such situations is one of our core competencies. This is how we offer our investors access to attractive sectors.
Why is real estate particularly attractive to investors at present?
Maximilian Hoffmann: Real estate offers an attractive risk/return profile: higher returns than bonds and more stability than stocks. Investors can implement their individual strategies within the broad real estate universe – from stable residential properties to high-yield commercial products. Our Investment Fund Commercial consists entirely of Swiss commercial real estate and generated a dividend yield of about 5% in the last financial year. Our investors were impressed by our investment strategy and the risk-return profile we adopted. Swiss real estate – including commercial real estate – continues to exhibit strong fundamentals with local and sectoral trends. As has long been the case, it's about the right locations with the right concept.
What factors have contributed to the strong performance and increased dividends?
Maximilian Hoffmann: Two key levers: we have reduced vacancies continuously, while simultaneously increasing rents. Vacancy rates in the commercial portfolio have remained consistently below 3.5%, and at times at a record low of less than 1%. At the same time, rental income rose by almost 3% in the past financial year. This combination is possible only with investments in the right locations and sectors, as well as active asset management with daily involvement. Our dividend target guides the activities of all units – and ensures alignment and success. This has enabled us to consistently exceed our distribution targets and build up reserves in the fund.
It is also pleasing for our investors that we have outperformed SWIIT by almost 16% since our launch. (Editor’s note: SWIIT: SXI Real Estate Funds Broad Index, comprises listed real estate funds).
You are now planning a listing on the SIX Exchange. Why, and what opportunities do you see here?
Maximilian Hoffmann: When we launched the product, we offered our investors the prospect of an IPO. After four years of strong performance, we believe now is the right time. The listing primarily increases transparency, visibility and tradability. In addition, it will make the IFC accessible to private investors. This means that private investors can also benefit from the investment strategy of the Investment Fund Commercial. For us and our investors, this is the next logical step in order to further expand trust and reach.
What regulatory and governance challenges do you anticipate?
Maximilian Hoffmann: Regulatory requirements are increasing, but we have the necessary experience and established structures to deal with them competently. As a part of SPS, we are familiar with a listed environment and understand the relevant processes.
The major change is that the fund will be more exposed to capital market dynamics in the future – with price movements that react more quickly to external signals. We cannot control this market environment. Our focus therefore remains clear: to work consistently on the properties, practise active management and thus safeguard the fundamental strength and stability of the portfolio.
«Our Investment Fund Commercial consists of 100% Swiss commercial real estate and achieved a dividend yield of about 5% in the last financial year.»
What role do capital increases play in your growth strategy?
Maximilian Hoffmann: Capital increases are the key instrument for the fund’s continued growth. We scan the market every day for suitable properties and carefully examine each potential deal to determine its contribution to the portfolio. Only when we have clearly identified that an investment supports our strategy do we raise fresh capital. This ensures that every capital increase is backed by a robust pipeline and contributes directly to value creation for our investors.
How will the portfolio focus develop – particularly in respect of light industrial?
Maximilian Hoffmann: Our tactical portfolio is currently geared towards a target vision of about 30% light industrial, 30% retail and 20% office use. This usage mix reflects a balanced commercial portfolio with a slight overweight in the manufacturing and retail sectors. Based on our current portfolio allocation, we will therefore continue to expand our light industrial share. In our opinion, this segment offers an attractive risk/return profile if the location and tenants are right and there are opportunities for subsequent use. As a general rule, we invest where the type of use works well at the location and the investment is within the tactical range.
ESG is a key issue. What sustainability goals are you pursuing?
Maximilian Hoffmann: Our focus is on reducing energy consumption. We have installed automated read-out devices in all properties, and these transmit consumption to a data cloud at frequent intervals. This allows us to detect peaks and leaks immediately and intervene directly – for example, in heating or cooling systems where the temperature has not been regulated appropriately during off-peak hours, or in the event of leaks in the system. Through this control, we have already achieved energy reductions of more than 20% in individual properties. It is also helpful that some tenants in the commercial sector have identical ESG targets, so we can achieve more together.
How do you deal with risks such as inflation, interest rate trends and geopolitical uncertainty?
Maximilian Hoffmann: Real estate represents real value and generates continuous cash flows. The Swiss real estate market in particular is seen as a reliable «safe haven» in times of heightened geopolitical uncertainty. The current key interest rate policy has a stabilising effect and also supports the positive development of the real estate market. Thanks to these conditions, value retention remains at a high level. Combined with solid operating results, the Swiss real estate sector offers investors an attractive investment opportunity with long-term stability, even in uncertain times.
Where do you see the fund in five years – and what are your most important priorities after listing?
Maximilian Hoffmann: Our aim is to achieve further qualitative growth and consistently pursue our successful investment strategy. As the fund grows, portfolio diversification is strengthened, which reduces risks sustainably. At the same time, we want to confirm the strong performance of recent years with the increased visibility of the IPO, and support the IFC in its development to the next level of maturity. An attractive distribution remains at the core of our product – regardless of the stock exchange listing.
What does this development mean for you personally?
Maximilian Hoffmann: This is a very special moment for me. I have supported the fund from the initial idea and the launch through to the present day, and I am now privileged to take it public together with our investors. I am passionately committed to taking the product into the next development phase – qualitatively, selectively and sustainably. The trust our investors place in us makes me proud, but it also comes with a great deal of responsibility. So I look forward all the more to demonstrating in this new phase that we can consistently continue our successful strategy. My aim is to further consolidate the trust of our existing and new investors, generate sustainable returns and establish the Investment Fund Commercial as an attractive product in the listed environment.
| KEY FACT | DETAILS |
| Fund name | Swiss Prime Site Solutions Investment Fund Commercial (SPSS IFC) |
| ISIN / Valor | CH1139099068 / 113 909 906 |
| Launched | 17 December 2021 |
| Listing | Scheduled for 9 December 2025, SIX Swiss Exchange |
| Investment focus | 100% commercial real estate, diversified across Switzerland |
| Strategy | Anticyclical «buy & manage» (Core+) |
| Target yield | ~4.5% to 5.5% p.a. Cash flow yield |
| Fund volume (31.3.25) | CHF 436 million |
| Fund management | Swiss Prime Site Solutions (FINMA regulated) |