Helvetica plans capital increase for the Helvetica Swiss Living Fund
As part of the planned listing on the SIX Swiss Exchange, the fund management company of the Helvetica Swiss Living Fund (HSL Fund) is planning a capital increase of up to CHF 150 million in the second quarter of 2023. The capital raising will be used for the further expansion and optimisation of the portfolio in line with the planned growth strategy.
The capital increase enables investors to invest in the residential fund with one of the highest distribution yields of all Swiss residential funds. The fund management considers this an extremely attractive window of opportunity to enter the undervalued Swiss residential market.
Investments are made in the most attractive regions
The HSL Fund invests in easily accessible regional economic centres with a rapidly growing population and good public transport connections. According to the latest study “Transaction Market Switzerland, Outlook 2023” by JLL, 46 per cent of the investors surveyed expect the best risk/return ratio in the residential sector to be in precisely these locations. The aim is to invest for the most part at attractive yields that improve the portfolio ratios. Priority acquisition criteria are properties with low rent ratios, ideally around 30 percent, and gross yields of over 4 percent. Helvetica’s large network ensures access to the best purchase opportunities.
Market rents will rise sharply
Record population growth, inflation and the strong demand for housing will inevitably lead to rising rents. Accordingly, the Helvetica Swiss Living Fund is ideally positioned for an increase in market rents thanks to its low rent levels. Thanks to the natural tenant fluctuation of around 15 percent per year, the existing rents can be successively adjusted to market rents and inflation. With a rent quantile of currently 39 percent, the level of rents is in the lowest price segment and thus ensures a very high payout capacity in the long term. Swiss residential real estate is thus very crisis-resistant and offers stable cash flow and long-term value appreciation.
One of the highest-distributing residential funds
Helvetica has repeatedly demonstrated that it can generate sustainable growth even in a difficult market environment. The Helvetica Swiss Living Fund grew by 63 percent in the 2022 financial year and, with a real estate portfolio of over CHF 818 million and 1,850 first-class flats, is one of the largest unlisted residential funds in Switzerland. For the 2022 business year, a distribution of CHF 3.45 per unit could be made, which represents an increase of 1.5 percent compared to the previous year.
Outlook
For the 2023 financial year, the fund management aims to increase the distribution by a further 5 centimes compared to the previous year and is targeting CHF 3.50 per fund unit.